Category: Jennifer Paul
Original Bailout Plan Will Be ‘Core’ of Revised Agreement, Gregg Says
GREGG
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
9/30/08
WASHINGTON– Congress could consider a financial bailout package that makes only slight adjustments to the original $700 billion proposal as early as Wednesday night, Sen. Judd Gregg (R-N.H.) said Tuesday, even as New Hampshire’s two House members called for substantial modifications to the plan.
“I think the core of the agreement will be the original proposal,” Gregg, the lead Senate Republican negotiator, said, “because it made a lot of sense, and it was the best idea that was out there from a standpoint of freeing up the credit markets. I don’t think anything in the basic package will be adjusted because that was reached by a bipartisan effort.”
The original plan authorized the federal government to use up to $700 billion to buy troubled mortgage-backed securities. Gregg said no revisions have been finalized but the legislation also could contain a provision to increase federal deposit insurance from $100,000 to $250,000 per account, an idea presidential candidates Barack Obama and John McCain both support. Raising the deposit insurance limit would protect small-business owners and individuals who keep more than $100,000 in one bank deposit account, he said.
“That’s the type of change that you might see,” Gregg said. “This is not a big part of the equation, to be honest with you, but if it makes people more comfortable voting for the overall effort, then we’ll do it.”
But Rep. Paul Hodes (D-N.H.), who voted against the bill Monday, said in an interview he would need to see several substantial changes made to the original proposal before he would consider supporting it.
Hodes said he wants a rescue plan to include changes to bankruptcy laws to allow homeowners to modify mortgages, more stringent restrictions on executive compensation and severance pay and tougher judicial oversight that would allow courts to review the actions and conduct of officials involved in carrying out a relief plan.
“I’m not ruling out supporting a sufficiently modified proposal, but it’s hard to comment in particular about all the things that I want to see changed in order to support this plan,” Hodes said. “Those are just some of the issues that I have and would need to be resolved before getting to the fundamental question of whether or not spending $700 billion of taxpayers’ money buying bad paper is the way to go.”
In an e-mailed statement, Rep. Carol Shea-Porter (D-N.H.), who also voted against the bill, mentioned the need for similar changes to the proposal.
Gregg said congressional leaders are focused on how to revise the plan to garner support from House members who voted against the original bill.
“What we’re working on is trying to figure out what the House needs in order to act rationally on this exercise,” he said. “Maybe I shouldn’t be so negative, but in any event, what they need in order to take action, which will allow them to pass this bill and yet not undermine the basic purpose of the effort, which is to free up credit and protect Main Street.”
Gregg said Congress needs to act quickly to pass the rescue plan to free up the credit market.
“That’s the purpose of this effort — to get these non-performing loans off the books so [banks] will have assets that they can lend against, thus creating credit in the marketplace,” he said.
Gregg stressed that the plan was not a solution to the financial crisis, only a tourniquet to stop the economic bleeding. He would not say whether he thought the country could enter a deep depression if Congress failed to pass a bailout plan.
“I don’t think it’s constructive to talk in those terms, but we are clearly looking at a severe economic event,” he said. “Even if we do act, we’re still going to be in a very slow economy, but it’s going to be something we can manage, hopefully.”
Hodes agreed that congressional action needed to be taken but said he was concerned about rushing to pass a plan without considering alternative proposals.
“Clearly, action needs to be taken, but it needs to be the right action,” Hodes said. “The right steps need to be taken. It’s not enough just to act quickly.”
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Gregg Urges Congress to Act on Bailout Plan by Weekend
GREGG
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
9/25/08
WASHINGTON--Congress must approve the government’s $700 billion bailout plan by this weekend to head off an adverse market reaction on Monday, Sen. Judd Gregg (R-N.H.) said Thursday.
“I would hope we wouldn’t leave here until we had something that we could vote out this weekend,” Gregg said in a conference call with reporters.
He said congressional leaders made “significant” progress during Thursday’s negotiations over the details of the rescue plan, which would authorize the government to buy and eventually resell troubled mortgage-backed securities.
The negotiations addressed issues of executive pay, oversight and the equity stake the government would hold in the companies from which it buys assets, said Gregg, the top Republican on the Senate Budget Committee. He could not provide specifics on those parts of the proposal.
“We have moved towards an agreement -- we haven’t finalized it -- that would allow the taxpayers to get a benefit if there was an upside here,” Gregg said in reference to the equity issue.
Gregg said the proposal authorizes the government to spend up to $700 billion to purchase troubled assets, but Congress would appropriate only $250 billion for the Treasury to use up front. The Treasury will be able to access an additional $100 billion immediately if it needs more funds, he said. An additional $350 billion would be made available if the next president determines that the money is needed, he said.
“We believe that [the initial $350 billion] is more than enough money for them to go in and buy what they think they can buy and need to buy within the next two to four months,” Gregg said. “There will also be available to them an additional $350 billion, should the president – it will be the next president, obviously – determine that that’s necessary to take that money down in order to settle out the market in this area.”
Taxpayers have a right to be concerned about the initial cost of the rescue plan, he said, but early, aggressive government action is necessary to stave off an economic catastrophe that could result in a “massive” loss of jobs and a credit market meltdown. The lockdown of the credit market was readily apparent Thursday, he said.
“It’s not theoretical,” Gregg said. “Even this morning the major credit markets were simply not working very well at all, and it was virtually impossible to try to move money around through the credit markets.”
He stressed that the plan would not cost taxpayers $700 billion, because the government is buying assets that have value.
“The net cost to the taxpayer may be $100 billion, or it may be that we make money on this,” Gregg said. “We do know absolutely without condition that the net cost will be dramatically less and nowhere near the $700 billion.”
Gregg said there is a tentative agreement to include in the plan a debt-reduction provision that he had pushed for earlier in the week. It would make sure revenues from the program are used to reduce the national debt until the government breaks even on the investment. If the government has returns greater than $700 billion, 80 percent of that profit would go to paying down debt, he said.
Sen. John Sununu (R-N.H.), who also backed the debt-reduction proposal this week, said he believed a bipartisan coalition could draft a plan that puts taxpayers’ interests first.
“I will continue to support efforts to strengthen congressional oversight, improve transparency and ensure that any gains from the Treasury program are used to pay down the federal debt,” Sununu said in a statement. “These are changes that make sense and will increase the chances that any final package will restore confidence and stability to our economy.”
Gregg said he couldn’t be completely confident that the plan would be successful.
“I can be extremely confident that if we don’t do it, we’ll have a catastrophe,” he said. “Will it work? Well I sure hope so, because we’re running out of options if it doesn’t.”
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Bailout Gains Should Be Used to Pay Down Debt, Sununu, Gregg Say
SUNUNU
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
9/24/08
WASHINGTON—The government’s $700 billion bailout proposal should include a provision to make sure that revenues from the program are used first to reduce the national debt, not to boost spending, New Hampshire Republican Sens. John Sununu and Judd Gregg said Wednesday.
The rescue plan would authorize the government to buy and eventually resell troubled mortgage-backed securities.
Gregg said he is circulating a proposal to ensure that returns on government investments won’t be spent on new initiatives or “pet programs.” He said the proposal has been “well-received” by the Senate leadership.
If the government spends $700 billion but makes $800 billion, Gregg said he would like to see the $100 billion profit go to paying down the federal debt, but would be open to allowing the profit to be used for other purposes.
“My druthers would still be to pay down the federal debt with anything you made here because we have a lot of debt,” he said. “It would be a constructive use of the money.”
Separately, Sununu said in a conference call, “Gains should be used to pay down the debt, not increase government spending. I think we need that kind of a commitment and a guarantee so that again taxpayers know that they’re being put first.”
The provision would show taxpayers that the government is committed to putting their interests first, said Sununu. He said oversight mechanisms also should be added to the rescue plan to protect consumers.
“Oversight is the best place to start, to look at ways to get the Government Accountability Office or an independent overseer involved in keeping track of the program, how it’s structured, the prices it’s paying for securities and, of course, whether taxpayers’ interests are being protected,” Sununu said.
Sununu said he is not opposed to restrictions on compensation for the executives of companies involved in the bailout and would look at specific proposals and “give them a fair consideration.”
“I think there’s a strong argument to be made for doing that when the government is stepping forward to provide capital directly to a firm that’s in distress,” he said. “The government should not be in the business of telling companies what they can and can’t pay employees as a general point, but if the government is stepping forward to save a company, to inject capital, as we did in the case of AIG [American International Group] or Fannie Mae, I think it’s certainly appropriate to raise the issue and to make any assistance conditional.”
Sununu said congressional leaders want to consider bailout legislation by the end of the week. The plan is likely to be introduced in the House and then taken up in the Senate if the House passes it, he said.
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Government Doesn’t ‘Have a Choice’ on Bailout Plan, Rudman Says
COALITION
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
9/23/08
WASHINGTON – The government’s $700 billion bailout plan is essential to put liquidity back in the market, former Sen. Warren Rudman (R-N.H.) said Tuesday.
“I don’t think we have a choice,” said Rudman, who co-chairs the Concord Coalition, a non-partisan group that advocates the goal of a balanced federal budget. “Unfortunately, it’s not a free choice. It comes with a cost.”
The cost of the rescue plan could boost the federal budget deficit to $700 billion or $800 billion next year, which could devalue the dollar and increase inflation, Rudman said. The estimated deficit for fiscal year 2008, which ends next Tuesday, is $407 billion, according to a Sept. 9 report by the Congressional Budget Office.
“If we start running a $700, $800 billion deficit next year, then we’re going to have a definite effect on the dollar, which will go down,” Rudman said.
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said Monday that the proposal—which would authorize the government to buy and eventually resell troubled mortgage-backed securities--would not cost $700 billion, noting that $700 billion is the initial authorization to spend, not the projected cost.
“It will clearly cost considerably less than $700 billion ultimately, because you’re going to sell these benefits,” Frank said at a press conference. “We’re acquiring things that we will sell. Nobody knows how much they will cost in the end…. It really depends on how well it works, because if the market recovers to a great extent, the assets recover, you get more money back.”
Rudman agreed that Frank was “talking within the realm of probability.”
“The net expenditure over the long term won’t be anywhere near $700 billion,” he said. “Certainly there will be substantial recovery.”
Rudman said there should be more accountability built into the plan regarding the governance of companies that are bailed out.
The cost of the bailout adds to a budget weighed down by long-term obligations to fund Social Security and Medicare, said Robert Bixby, executive director of the Concord Coalition. He said the amount of debt involved in the rescue package could spur members of Congress to take another look at the budget and begin to close the budget gap by reducing government spending or raising taxes.
“People seem to think that you can go along living off of credit and hoping that nothing goes wrong, and that’s basically what the federal government has been doing,” Bixby said. “So I think that what we need to do after we get through this initial bailout is get down to work to make sure that the federal government isn’t in need of a bailout itself.”
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Congressional Leaders Given Short Notice for AIG Briefing, Senator Says
TUX
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
September 18, 2008
WASHINGTON – A Tuesday night meeting called to brief congressional leaders on the federal government’s $85 billion takeover of insurance giant American International Group, Inc. was pulled together so quickly that Sen. Judd Gregg (R-N.H.) didn’t have time to change out of the tuxedo he had planned to wear to a black-tie gala that evening.
Gregg, the senior Republican on the Senate Budget Committee, attended the 6:40 p.m. meeting at the Capitol dressed for an award ceremony at the National Archives to honor Civil War historian and Pulitzer Prize-winning author James McPherson. Gregg said an aide told him about the meeting at 6:15 p.m., so he rushed from his Washington, apartment to the Capitol, where Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and top congressional leaders were gathering.
“It was a very sober meeting,” Gregg said. “I mean, you’re dealing with a major economic event, which has massive implications for a lot of people…because AIG is the insurer essentially for most of the banking system of this country, so if it had gone under, it would have taken a lot of banks with it.”
After the briefing, Gregg said he returned to his apartment to pick up his wife, Kathy, who had flown from New Hampshire to attend the gala. They made it to the National Archives in time to hear McPherson’s speech, he said.
“We’re big supporters of the Archives,” Gregg said. “I think they’re really one of the unique resources of our nation.”
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N.H. Soldier Will Receive Bonus, Congressman Says
BONUS
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
September 18, 2008
WASHINGTON – A soldier from Keene, N.H., who returned from Iraq in July will receive a $3,000 refund from the military for bonus pay that was given to him and later revoked, Rep. Paul Hodes (D-N.H.) said Thursday.
Kevin Steven Clark II, 24, was promised a $14,000 bonus for agreeing to serve in a combat unit when he visited an Army recruiting office in 2005, said his mother, Jane Clark. After enlisting, Clark was sent to Ft. Stewart, Ga., and then served in Iraq for 15 months. Spc. Clark received $3,000 of the bonus before military officials told him that he had been sent to Iraq with a unit that did not qualify for the bonus and ordered him to repay the money, his mother said.
“He was paying this back while he was in combat,” she said of her son, who is currently stationed at Ft. Stewart.
Jane Clark and her husband asked Hodes to help their son after hearing the congressman interviewed on a local radio show last spring. Hodes secured the refund after writing to Defense Secretary Robert Gates to explain the situation.
“This was a case that seemed to cry out for help,” Hodes said. “I wanted to make sure that especially when it involves somebody who’s put their life on the line for this country that the U.S. government is going to do right by the person. That is my job.”
In a letter to Hodes, military officials said Spc. Clark was “erroneously paid” the bonus because his unit did not qualify for it, but the money would be refunded “as a matter of equity.” Hodes said Army officials shouldn’t be calling the bonus payments a mistake.
“It’s hard for me to believe that they can say that with a straight face when they’re paying him the money back,” he said. “I think the mistake was the Army’s practicing a bait-and-switch on a brave soldier.”
The bonus “was contingent on successful completion of training and assignment to a designated unit as determined by Department of the Army,” Maj. Nathan Banks, an Army spokesman, said in an e-mail Thursday.
Jane Clark said her son wants to attend college to study special education after he is discharged from the military in December. Her son was told he would receive his refund within 30 days.
He is working with military officials to see if he is eligible to receive the rest of the $14,000 that was promised, she said. The decision of whether to pay the full bonus rests with Army officials, Hodes’ office said.
Kevin Clark is not allowed to speak to the media about the matter because he is still an active member of the military, his mother and representatives from Hodes’ office said.
“We’re really happy that working with Congressman Hodes has gotten the ball rolling and gotten the Army to see that these kids deserve their money,” Jane Clark said. “They’re over there protecting us and fighting in a nasty war. And if you promise someone something, you need to follow through.”
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N.H. Democrats Back Measure to Allow Offshore Drilling
DRILLING
New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
September 16, 2008
WASHINGTON – New Hampshire’s Democratic representatives voiced support Tuesday for an energy bill that would allow oil and natural gas drilling in some coastal waters but would prohibit development of Georges Bank, New England’s prime fishing ground.
Reps. Paul Hodes (D-N.H.) and Carol Shea-Porter (D-N.H.) followed other House Democrats and backed the measure, which could open waters more than 50 miles from shore to drilling. Each state would have control over drilling that occurs between 50 and 100 miles off its coastline, while the federal government would control waters beyond 100 miles.
When President Bush lifted an executive ban on offshore drilling in July, both representatives condemned the action as shortsighted. Hodes said he supports the House bill because it offers a comprehensive energy strategy that doesn’t focus solely on drilling.
“We have expanded offshore drilling, we have support for renewable and alternative energies, we are finally shifting this country’s energy policy in a comprehensive way,” Hodes said. “I’m willing to make this compromise. I think it’s what the American people have been calling for.”
The measure would require utility companies to use renewable energy sources, such as wind and solar power, to produce 15 percent of their annual electricity supply by 2020. It would not allow states to share in the revenues from increased drilling. Instead, the money would be used to research and promote clean renewable energy.
“We are interested in fiscal responsibility, and fiscal responsibility and pay-as-you-go require that we direct the funding to national priorities,” Hodes said.
But many Republicans, including Sen. Judd Gregg (R-N.H.) and Sen. John Sununu (R-N.H.), denounced the bill as a bait-and-switch tactic because it doesn’t allow the states to take part in the proceeds from increased offshore drilling. Gregg said the absence of revenue sharing “basically guarantees the difference whether or not the drilling will be pursued.”
“This bill was not written for the purposes of drilling offshore,” Gregg said. “This bill was written for the purpose of protecting people politically.”
A congressional moratorium on offshore drilling that has been in effect since 1981 expires Sept. 30. Because Bush already lifted the executive ban on drilling, without a new bill, the federal government could allow drilling as close as three miles offshore, Shea-Porter said.
“I’m supporting it because it’s the best compromise that can come out, and it’s actually a fair one because what it will do is allow more drilling, but it will allow states to opt in,” she said, dismissing the contention that states wouldn’t agree to offshore drilling without revenue sharing. “States know that if they have this, they too will have jobs.”
Sununu is backing an energy proposal being developed by a bipartisan coalition in the Senate that would allow drilling across the Gulf of Mexico and off the coasts of Virginia, North Carolina, South Carolina and Georgia. Under the proposal, states would be able to share in the revenue generated. The proposal also would provide tax credits for renewable energy and promote the use of nuclear power, according to a Sununu press release.
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Dodd Pushes for Energy Assistance Program to be Fully Funded
LIHEAP
Norwalk Hour
Erin Kutz
Boston University Washington News Service
March 5, 2008
WASHINGTON – When Hartford resident Robin Hussain left her job to care for her grandchildren full-time, she quickly learned that federal energy assistance, not savvy shopping, would help her make ends meet.
“Your heating cost is the toughest thing to manage in your entire household budget,” she said. “There are many expenses that you can bring down. You can shop more carefully for groceries and you can clip coupons or switch to another market. You can get used clothes. You can find a more affordable apartment. But you don’t have a choice when it comes to heating that apartment.”
This year, Hussain is receiving $675 toward paying her heating and hot water bill, from the federal Low Income Home Energy Assistance Program, she said Wednesday at a hearing held by the Children and Families Subcommittee of the Senate Health, Education, Labor and Pensions Committee, which is chaired by Sen. Christopher Dodd (D-Conn). Hussain is also on a plan in which the gas company fully matches her $80 monthly payments, she said.
Dodd is one of many legislators advocating that the fiscal 2009 budget contain the $5.1 billion required to fully fund the federal heating assistance program and help more households like Hussain’s. President Bush’s budget requested only $2 billion for the program, down from $2.57 billion for this year. Fully funding the energy assistance program would cost roughly half as much as a month in the Iraq War, Dodd said.
This year, close to 19,000 Connecticut households ran out of their basic heating assistance money by mid January– almost twice as many as last year, Dodd pointed out.
Last year, 211 families ran out of the extra, emergency assistance they are forced to rely on when the basic funding runs out. This year, more than ten times as many — 2,981 — have exhausted that emergency heating assistance.
Rising fuel prices, growing unemployment and the sub-prime loan crisis make expanding the heating assistance program, also known as LIHEAP, even more pressing, said. Sen. Edward Kennedy (D-Mass.).
“It seems to me that LIHEAP recipients are in the middle of a perfect storm,” he said. “The explosion in costs for oil has just been something just so dramatic and so out of step with people on fixed incomes.”
When some legislators pushed for heating assistance in the economic stimulus plan Congress approved last month, they were assailed by some as trying to score political points. Dodd said heating assistance “is not just a heating and cooling program—it is a homeownership program, a nutrition program and certainly a health program.”
Dr. Deborah Frank, a pediatrics professor at the Boston University School of Medicine, urged the senators to expand heating assistance from a child health and developmental standpoint, noting that babies will freeze to death before they will starve to death.
Children in families who spend grocery money on heating bills suffer from malnutrition, she added. She also pointed to two siblings in Boston who died in a fire started by their family’s space heater, which many struggling households use to lower oil expenses.
Frank also said that children whose families are eligible for heating assistance but do not receive it are 23 percent more likely to have poor physical growth and 32 percent more likely to be admitted to the hospital than their peers in families receiving heating assistance.
She looked to the subcommittee to help alleviate these ills.
“There is a medicine that is partially effective in protecting children from the current epidemic of energy insecurity and its costly consequences, not just in human suffering, but in medical and educational costs now and in the future,” Frank said. “That medicine is public energy assistance.”
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