What’s the main selling point for the financial regulation bill Congress is debating? That it would end taxpayer bailouts. The Senate even added an amendment directly noting that the bill is intended to “prohibit taxpayers from ever having to bail out the financial sector.” But don’t breathe a sigh of relief too quickly. Because the bill’s many problems include this frequently overlooked fact: It does nothing to fix the problems with Freddie Mac and Fannie Mae, both of which A) played a major role in the meltdown of 2008 and …
In the last week, the government-backed mortgage finance giants Fannie Mae and Freddie Mac asked the taxpayer for $19 billion to stay afloat. Add that to the $127 billion in bailouts they have already received since September 2008, and we are now talking about a whopping $146 billion of your hard-earned tax dollars being used to prop up these failed entities. In more than a year and a half we have heard nothing from the Administration about a plan to implement real reforms to stop the bleeding. This Democratic Congress, …
Senators Kerry and Lieberman have introduced their “compromise” climate change legislation that relies largely on a “cap and trade” scheme to reduce carbon emissions. Even assuming there was a need for carbon limits, the Kerry-Lieberman bill gets the mechanism all wrong, apparently because the Senators either don’t understand or don’t trust markets. Kerry and Lieberman propose that the government manage a carbon market because controlling pollution is really important. This will work about as well as the government running grocery stores because everyone needs food. The insight underlying the use …
Supporters of Sen. Chris Dodd’s financial regulation bill say it will end financial bailouts. In fact, the Senate — anxious to reassure Americans on that fact — even added an amendment last week with a stated purpose “[t]o prohibit taxpayers from ever having to bail out the financial sector.” But someone forgot to tell the folks across town at Freddie Mac and Fannie Mae. Freddie last week announced it had lost $8 billion in the first quarter of the year, and would be asking for another $10.6 in taxpayer help. …
Yesterday, Sen. Chris Dodd (D-CT) told reporters about his financial regulation bill, “We’ve ended the ‘too big to fail’ debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer.” Really. Someone might want to tell Sen. Dodd that in other news yesterday, Freddie Mac announced that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers. Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 …
It must not be easy being Treasury Secretary Timothy Geithner, these days. His latest task is to sell a skeptical Congress on the Obama Administration’s $90 billion bank tax with something of a convoluted snake oil sales pitch. He tried to make his argument to the Senate Finance Committee on Tuesday. You see, Geithner explained, “Banks should bear the costs for bank failure,” and the tax is really a “too-big-to-fail tax” designed to recoup funds used to bail out banks under the Troubled Asset Relief Program. Unfortunately for Geithner, that …
So President Obama wants to slap a tax on banks, but should you really care? Absolutely. Those taxes are going to wind up costing YOU money, whether you’re a customer, a bank employee or an investor, according to the non-partisan Congressional Budget Office (CBO). As ABC News reports, the CBO wrote a letter yesterday to Sen. Chuck Grassley (R-IA) in which it highlighted that the American people will bear the true brunt of the President’s proposal. From the CBO’s letter: [T]he ultimate cost of a tax or fee is not …
In his State of the Union Address, President Barack Obama proposed “a modest fee” on banks that “would pay back the taxpayers who rescued them in their time of need.” In truth, his bank tax would hit financial institutions who have paid back their bailout funds, with interest, while those who haven’t—Fannie Mae, Freddie Mac, General Motors and Chrysler—would get off scot-free. As Politico reports, Sean Ryan at Wisco Research firm says Obama’s tax would have other effects, too. From Politico: “[Ryan] predicts the banks will simply pass on the …
After suffering major electoral and legislative defeats last month, President Barack Obama took to the campaign trail in Nashua, New Hampshire, pitching his administration’s latest new plan to lower our nation’s double digit unemployment rate. This time, the President hopes to do for small businesses what Fannie Mae and Freddie Mac did for home mortgages. Specifically, he wants to create a new $30 billion “Small Business Lending Fund” which will loan money to banks with assets under $10 billion at favorable new rates, as long as they comply with a slew …
Facing rising populist anger over his administration’s billion-dollar bailouts, President Barack Obama proposed a $117 billion tax over the next 12 years on financial companies with assets of more than $50 billion. “We want our money back, and we’re going to get it,” the President said. The President is half right. Taxpayers are going to get their money back from the banks that received bailout money … but don’t expect to see any of the money the Obama administration poured into General Motors and Chrysler at the behest of their …
