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  • Morning Bell: Having Their Cake and Eating It, Too

    Yesterday before the Joint Economic Committee, Federal Reserve Chairman Ben Bernanke made a clear case as to why federal action is needed: home mortgages and car loans had become harder to get, commercial credit was becoming scarce for many businesses and consumer spending had already declined. Leaders in both parties know that inaction will hit Main Street hard. According to The Washington Post, public utility companies will have to raise rates to cover the increased costs of short-term borrowing, two-thirds of National Small Business Association members report feeling pressure from the credit crunch, and 65% of banks report tightening lending standards for small firms.

    Following Bernanke’s presentation, Sen. Chuck Schumer (D-NY) told The New York Times: “There is a clear recognition among members of both parties that we must act, and act soon.” Unfortunately, leaders in both the House and Senate are insisting on playing politics instead of focusing on the problem at hand. On Tuesday, Senate Majority Leader Harry Reid (D-NV) told the White House it must guarantee John McCain supports a bailout package if it hoped to pass the Senate. But then when McCain announced he would come to Washington to participate in negotiations, Reid flip flopped, issuing the following statement: “It would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process or distract important talks about the future of our nation’s economy.” Reid can’t have it both ways. He can’t both demand McCain support the plan and then bar him from participating in its formation.

    The House leaders are even more open about their political machinations. Speaker Nancy Pelosi (D-CA) told Democrats early this week she refuses to bring any plan to the floor unless a majority of the minority support it. The brazen refusal to offer any political leadership is stunning. Pelosi told the Wall Street Journal: “We are not taking ownership of this.”

    The left’s complete abdication of legislative responsibility would not be so galling if lawmakers also were not insisting on larding up Treasury Secretary Hank Paulson’s plan with unnecessary government interference in the market. The left is still pushing for expanded government power to rewrite mortgage contracts and diverting taxpayer revenue from the sale of distressed assets into a housing slush fund. At least Warren Buffet still has faith Congress will eventually do the right thing. He told the Wall Street Journal: “I really do think Congress will do the right thing, when it’s terribly important, and they will do it fast. They will haggle but they have the national interest at heart.” Let’s hope he’s right.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    4 Responses to Morning Bell: Having Their Cake and Eating It, Too

    1. Michael J O'Bri says:

      Great Piece and very timely Heritage…consider…

      The Democrats have very skillfully engineered our economy from a free market capitalist to a socialist system over the past several years as is evident with the housing situation and bail outs. The Democratic Party leaders, Dodd, Frank, Pelosi and Reid continue to use income redistribution to achieve their goals of a socialist America. The Republicans have been asleep, and the electorate must wake up before the election or we can kiss capitalism good bye forever. Bill Ayers will be the next Secretary of the Treasury. It is also important to note that two Republican Senators, Bunning and DeMint have stood firm against this nonsense with little support from their own party.

      Barney Frank’s housing bill of $300bn was recently passed and signed into law and according to Frank; this would solve the housing crisis by allowing homeowners whose homes were under water [more mortgage than equity] refinance at lower rates with reduced principles and remain in their homes. Secretary Paulson urged the urgent signing of this legislation and requested an additional $100bn for the bail out of Fannie and Freddie bringing the total to $400bn. Freddie and Fannie own the sub prime mortgages that these homeowners cannot pay. Bear Sterns received $35bn from the taxpayer, while AIG recently received $85bn for a bailout. This totals $520bn of taxpayer money to pay for loans that sub prime homeowners cannot pay. The administration is seeking for wall streeet firms $700bn to bring the total to $1.20 trillion. There is certainly copious overlap and duplicity in these bills with little oversight.

      Consider these tax statistics: 10% of income earners pay 70% of all Federal Income taxes, the top 1% pay 35%, the lower bottom 50% pay just 3%, and the last 32% in 2005 paid no taxes at all. Therefore, it is evident that the Socialist Democrats have finally achieved their objective of income redistribution. No more slush funds or special bail outs, not MacDonalds or GM. There is just not much more to go around.

    2. Nillia J. Noyes, Sun says:

      Bunning and DeMint have stood firm against this nonsense with little support from their own party.

      Why haven't we heard more about the efforts of these two men. Senator DeMint in particular has offered a plan far superior to the one be pushed by most of our politicians.

    3. Edwin Buck, Albuquer says:

      The liberals are bound and determind to sovietize the USA. And, it looks like they are succeeding. Their biggest fear is for Sarah Palin getting to Washington, and naming names and taking these entrenched bureaucrats to task, for stealing from tax payers for years, with our consent, by the way. Hey, we elected these theives, and put them in office for years.

    4. Pingback: Morning Bell: Market Rescue Dos and Don’ts | The Foundry: Conservative Policy News.

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