September 22, 2008
Dear Democratic Colleague:
Bush/Paulson tell us immediate action is necessary, but demand action only on their terms. If speed is necessary, Bush should agree to include Democratic priorities in any new financial rescue plan legislation.
Foreign Investment: Under the Bush proposal, the U.S. banks that get hundreds of billions are free to invest these dollars overseas. We should require that any taxpayer bailout monies are invested in America.
Foreign investors: At first glance, the Bush proposal calls for bailout payments only to banks headquartered in the United States. I agree that foreign investors should be bailed out by their own central banks and governments. However, the statutory language is loophole ridden. Under the Bush proposal, foreign banks can simply sell their mortgage assets to US banks, knowing that the US banks will then unload them on the US government. The bill should be limited to mortgage related assets owned by American investors on! September 20th, and "American investor" does not include the US subsidiary of a foreign headquartered bank.
Regulatory, Corporate Governance, and Executive Compensation Reform: The Bush proposal will provide zero Regulatory Reform, zero Corporate Governance Reform, and no limits on executive compensation at firms receiving the bailout. Secretary Paulson suggests we defer these issues until next year - knowing full well that next year Wall Street lobbying and Republican Senate filibusters will prevent the passage of meaningful reform. Our only opportunity to pass meaningful reform is now. An alternative is to provide for fast track throughout the 111th Congress for all bills dealing with regulatory reform, corporate governance reform, and executive compensation limitation.
Help for Homeowners: In July, the Bush administration finally agreed to provide roughly $3 billion in help for homeowners, and then only as part of a bill the Administration desperately wanted. Now they want more than $700 billion for Wall Street, and nothing additional for homeowners.
High Fees Payable to Wall Street: The Bush proposal allows the Administration to pay unlimited fees to some Wall Street firms to manage the bad loans purchased from the other Wall Street firms.
Tax Reform: The Bush proposal transfers hundreds of billions to the wealthiest. Shouldn't we consider rolling back some of the Bush tax cuts for the top 1%?
GAO Supervision: Secretary of the Treasury shall enter into no contracts or purchase agreements unless determined by the Comptroller General (head of the GAO), that such contract, agreement, or purchase is in the interest of the United States. Asset purchase agreements of less than $1 billion, and service contracts providing for fees of less than $10 million, are exempt from this requirement.
We should quickly put a bill on the President's desk that protects working families.
Member of Congress