Category: Fall 2008 Newswire
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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Service for Murdered Becker Student Draws Huge Crowd
FUNERAL
Worcester Telegram and Gazette
Rachel Kolokoff
Boston University Washington News Service
September 27, 2008
ST. INIGOES, MD. - The rain fell hard on rural Southern Maryland Saturday morning as some 1,500 mourners gathered at St. Peter Claver Catholic Church to say farewell to William L. Smith, 19, a Becker College student killed in Worcester last week.
Known by most who knew him as “Will,” and by those closest to him as “Little William,” he was a high school all-star baseball, basketball and football player who attended West Virginia University Institute of Technology and Shepherd University before transferring to Becker College this fall to major in sports management.
“I was his first baby-sitter, this little bundle of joy with a big head,” Will’s cousin William Shade said at the service. “The first thing he did was run around with a basketball.”
Church leaders were joined by a gospel choir of friends, family, and community members that swayed back and forth in unison, warming the chilly, wind-swept room with song and charisma.
The crowd of mourners spilled out into the church’s hallways while nearly a hundred more people stood in the churchyard with only umbrellas for cover.
St. Peter Claver is a small church whose red brick walls and wooden rooftop date back to the early 20th century when it was built as one of the first predominantly black parishes in St. Mary’s County.
On Saturday its walls were lined with students, teachers and friends as family and parishioners led the two-hour memorial service.
“I don’t have a favorite memory of Will,” said Timothy Smith, Will’s brother and only sibling. “My life story is my favorite.”
Also in attendance were Becker College administrators John S. Prosser, chairman of the board of Trustees, Vice President Gerald Tuori and a busload of Becker sports team members and head basketball coach Brian Gorman.
“A tragedy like this is hard for any school or institution, but this was even more tragic to us because it was obvious to Will and his close friends that Becker was a great match for him,” Mr. Prosser said in an interview before the service. “Our basketball coach hoped he would’ve made our team and a number of our students and staff grew close to him in a very short time.”
One of Will’s 27 aunts and uncles, Orlando “Tubby” Smith, also spoke at the service. He said he appreciated the support shown by people in Worcester and students at Becker College.
“The support that folks have given us at Becker College has made an unbearable situation bearable and survivable,” Mr. Smith said.
In a telephone interview on Friday, Mr. Smith said his nephew Will was gifted in many ways but especially in his love of sports and competition.
“There was just so much going on. He was preparing to really move on to a different phase” after having tried football, Mr. Smith said. He said his nephew told him he wanted “to try basketball, and that was dear in my heart as well because I’m a basketball coach.”
Mr. Smith coached the University of Kentucky’s men’s basketball team for 10 years and currently coaches the University of Minnesota’s Golden Gophers. He said he and the rest of the Smith family will miss Will, a special young man who touched many who knew him well and many who were just getting to know him.
“He was just such a young person and he had so much ahead,” Mr. Smith said. “He’s just in a better place now. We loved him dearly and appreciate all the wonderful thoughts and concerns and prayers that people have extended to William and his family.”
Other speakers at the service included John Bohannan, a member of the Maryland House of Delegates, the Rev. Leroy Boldley, pastor of Mt. Zion United Methodist Church in St. Inigoes, and several other pastors from around the state.
William Smith was stabbed once in the chest outside of an apartment building in Worcester on the evening of Saturday, Sept. 20. He died around 2:45 a.m. Sunday at the University of Massachusetts Memorial Medical Center. He was buried in his hometown, Scotland, Md.
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Fair Trade Protest at Sen. Collins’ Bangor Office
FTA
Bangor Daily News
Maite Jullian
Boston University Washington News Service
9/26/08
WASHINGTON -- About 30 protesters delivered 24,000 pink slips to Republican Sen. Susan Collins’ office in Bangor on Friday and asked her to oppose the U.S.-Columbia free trade agreement awaiting congressional approval.
The Maine Fair Trade Campaign, a coalition of 51 organizations and unions across the state, said the pink slips – a piece of paper given to a worker as a layoff notice – symbolically represented the 24,000 manufacturing jobs lost in Maine since the passage of the North American Free Trade Agreement in 1994 between the U.S., Canada and Mexico.
The protesters said another free trade agreement would put at risk thousands of other jobs in Maine.
“The problem with free trade is that it is sending our jobs overseas,” Daphne Loring, a Maine Fair Trade Campaign coordinator, said. “People are suffering, the middle class is squeezed. The last thing we should be considering is the extension of the NAFTA to Columbia.”
Collins was the only Maine member of Congress who did not take a position on the issue, either supporting or opposing it, Loring said in a telephone interview.
“Collins is supposed to represent Maine working families,” Loring said. “We need her to represent us in Washington. We need the entire delegation to support us.”
Jen Burita, Collins’ spokesperson, said that the senator had opposed some trade agreements, such as the Central American Free Trade Agreement, and supported others, such as the Chilean Free Trade Agreement.
“In deciding whether or not to support trade agreements, Sen. Collins always evaluates the impact on Maine workers and examines the labor and environmental provisions in each pact,” Burita said.
If approved, the agreement would eliminate tariffs and other trade barriers between the U.S. and Columbia.
Both governments signed the Trade Promotion Agreement in November 2006. The legislative branches of both countries need to approve it before it can be enacted.
The Colombian Congress approved it last year. President Bush sent it to the U.S. Congress last April but the bill did not get out of committee in either the House or the Senate. As a result the bill will likely die, as Congress is on the verge of adjourning.
Protesters denounced the risks of unfair trade agreements, for American manufacturing and service jobs.
“We hear about the loss of 25,000 manufacturing jobs but this is just the beginning of the trade agreements’ effects,” Alec Maybarduk, a staff member of the Maine State Employees Association, said in a telephone interview. “We wanted to send a clear message today, especially with the economic context. Right now, we are feeling the effects of deregulation on financial markets but we’ve felt that in manufacturing jobs for years.”
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Patrick Testifies to Support Increase in Home Heating Funds
PATRICK
Worcester Telegram and Gazette
Rachel Kolokoff
Boston University Washington News Service
September 25, 2008
WASHINGTON - Gov. Deval Patrick testified on Capitol Hill Thursday that Massachusetts could face a public health threat unless Congress increases funds for home heating assistance and encourages states to use energy more efficiently.
“Without help, many of our most vulnerable citizens will find themselves facing heating bills they cannot pay,” Mr. Patrick said. “And the challenge is right around the corner. Nighttime temperatures are already dropping into the 40s and 30s this week in New England.”
Mr. Patrick offered his testimony to the House Select Committee on Energy Independence and Global Warming to support $5.1 billion for the federal Low Income Home Energy Assistance Program (LIHEAP) in fiscal year 2009.
That amount, which is almost double what states received this year, is part of an omnibus spending bill the House passed on Wednesday. Massachusetts would receive some $163 million, an increase of more than $36 million from this year.
While the governor applauded the House’s action, he also said the money is just a stopgap measure.
“High energy costs in the Northeast are a foreseeable and continuing reality,” Mr. Patrick said. “A dedicated federal plan that includes support for state LIHEAP programs, and also for efficiency strategies and renewable energy generation and delivery, is the big task remaining ahead.”
He said it will probably take $3,200 to $4,000 to heat an average Massachusetts household with oil this winter. He said he was hopeful that the bill will pass in the Senate.
“I met with the whole Massachusetts delegation today, and Sen. Kerry was there, and he’s hopeful, and I know he’s going to press for it,” the governor said. “Also, Chairman [Edward J.] Markey says he’s been in touch with his counterparts on the Senate side.”
U.S. Rep. Markey, D-Malden, the chairman of the select energy committee. said he hopes the Senate does the right thing by passing the bill.
“More families than ever will need assistance this winter, and the additional LIHEAP funding that Democrats have provided will hopefully ensure that everyone in need of help this winter will be able to get it,” Mr. Markey said in a statement.
That assistance, he said, would help people in the Northeast face the skyrocketing prices of home-heating fuel.
Families who use heating oil will spend 30 percent more this winter than last winter, a $600 average increase, Mr. Markey said. Those who use natural gas will spend nearly 20 percent more.
“Regardless of the region of the country or the home-heating fuel, the Department of Energy is forecasting that families will experience a substantial increase in their heating costs this winter,” Mr. Markey said.
U.S. Rep. James Sensenbrenner, R-Wis., the senior Republican on the committee, said that while he appreciates the help that the energy assistance program provides low-income households, he has concerns about the formula for division of funds among the states.
The program, Mr. Sensenbrenner said, is meant to help people stay warm from the cold.
“No one is going to freeze in Arizona,” he said.
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Special Interest Groups Ratchet Up Negative Ads in New Hampshire Senate Race
ADS
The Keene Sentinel
Joe Vines
Boston University Washington News Service
September 25, 2008
WASHINGTON− National business and labor groups such as the U.S. Chamber of Commerce and the Service Employees International Union are playing an increasingly visible role in the New Hampshire Senate race between Republican Sen. John Sununu and former Democratic Gov. Jeanne Shaheen.
The organizations are running television advertisements lambasting the two candidates for their records on issues ranging from the cost of prescription drugs to tax policy.
The Chamber of Commerce ad, titled “tax machine,” is set in what appears to be the 1920s. The ad depicts cars crashing and a bridge collapsing under a train’s weight and plummeting to the ground below, while criticizing Shaheen for proposing additional income taxes.
“The allegation about the income tax is absolutely, patently false,” said Kate Bedingfield, the Shaheen campaign’s communications director. “She threatened to veto an income tax and was responsible for killing the legislation that would have implemented it.”
Bedingfield acknowledged that Shaheen proposed a 2.5 percent sales tax, but only after a state Supreme Court decision mandated that the state play a bigger role in paying for local public education. “When she was governor, New Hampshire had the lowest tax burden in the nation,” Bedingfield said.
The chamber promotes business issues and a free-enterprise agenda before Congress and the states, according to the organization’s Web site.
The U.S. Chamber of Commerce is not affiliated with the Greater Keene Chamber of Commerce, said Thomas Dowling, president of the local organization.
“The Greater Keene Chamber of Commerce does not support or disparage any political candidate,” Dowling wrote in a statement to the Sentinel. “We use our energy and resources to engage the diverse segments of our regional economy in the common goal of creating a better business community and a better place to live, work, play and raise a family.”
The U.S. Chamber will spend $20 million to elect “pro-business” candidates this cycle, according to J.P. Fielder, a spokesman. He said that the ads follow all legal protocols. “The ads speak for themselves, that they reflect the views of the U.S. Chamber of Commerce. I wouldn’t think anyone would assume otherwise,” Fielder said.
Sununu too is taking heat from third party groups. The Service Employees International Union recently sponsored an ad criticizing Sununu for opposing an amendment to a Senate budget bill that the union says would have lowered prescription drug prices. The campaign declined to comment on Sununu’s vote on the amendment.
The SEIU represents approximately 2 million health-care and public service workers, according to the organization’s Web site. The ad buy cost $600,000, according to a press release.
“As they did in 2002, we know that the liberal special-interest groups will again spend millions of dollars trying to distort Sen. John Sununu’s record of independent leadership for New Hampshire families,” Sununu campaign press secretary Stefani Zimmerman said in a statement.
Advertising by third-party groups has become commonplace in political campaigns, particularly this election cycle. “Unfortunately third-party spending is a fact of political life right now,” Shaheen aide Bedingfield said. There’s nothing we can do to control them. It’s unfortunate, but it’s a fact of political life right now.”
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Gov. Patrick Testifies at Hearing on Home Energy Costs
HEARING
The New Bedford Standard-Times
Courtney Hime
Boston University Washington News Service
September 25, 2008
WASHINGTON – Gov. Deval Patrick urged Congress Thursday to do its part to stop the “slow-motion Katrina” that is threatening the New England area in the face of rising home heating costs.
Gov. Patrick, in a hearing before the House Select Committee on Energy Independence and Global Warming, chaired by Rep. Edward Markey, stressed the importance of fully funding fuel assistance programs – especially for cold-weather states. The hearing was focused on the future of the federal Low Income Home Energy Assistance Program.
In his testimony, Gov. Patrick said Massachusetts was facing a home heating crisis. With the current price of heating oil hovering at $4 a gallon and the average family needing 1,100 gallons of oil during the winter, he said it would cost about $4,000 to heat a household.
The Massachusetts program, he said, “is expected to serve almost 144,000 households this winter. With rising energy costs and level formula funding, our benefits would barely cover half the roughly $1,130 it costs to fill a tank of heating oil.”
At that rate, the governor said, the low-income benefit would run out by the end of 2008.
Gov. Patrick’s numbers were based on the amount of home heating funds available to Massachusetts in the federal fiscal year that ends on Wednesday: $115 million in federal and $15 million in state funds. However, Massachusetts could be seeing an increase in fuel assistance funds.
Thursday’s hearing came directly after House passage of an omnibus spending authorization bill that would virtually double federal funds for the heating assistance program nationally to $5.1 billion. Of that money, Massachusetts is expected to receive $163 million in federal funds, according to Rep. Markey’s office.
In addition to the increase in funds, the legislation also called for an expansion in the eligibility requirements for energy aid, which could potentially allow up to 350,000 Massachusetts households to apply for assistance.
Gov. Patrick said he appreciated the House action and urged that the Senate maintain the amount budgeted for home heating aid when the bill goes to the floor.
“What’s at stake is the real possibility that many citizens in the colder regions of this country would be at risk of freezing to death without federal funding,” he said.
Combined with $10 million state appropriations and $11.5 million in federal contingency funds announced last week, Massachusetts would see a total of about $184.5 million for fuel assistance this winter if the Senate approves the bill.
In New Bedford, Bruce Morell, executive director of People Acting in Community Endeavors, the local fuel assistance provider, said the additional funds would be a great benefit for the area.
“This is a huge help, especially for benefit and funding levels given the current price of oil,” Morell said.
Brigid O'Rourke, spokeswoman for Sen. John Kerry, said the senator “is hopeful” that the Senate will act favorably.
Gov. Patrick said he’s optimistic the state will see fuel assistance funds.
“I met with the whole Massachusetts delegation today, and Sen. Kerry was there, and he's hopeful and I know he's going to press for it,” the governor said. “Chairman Markey says he's been in touch with his counterparts on the Senate side. “So we're hopeful.”
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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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Lieberman Takes on Terrorism Videos on YouTube
YOUTUBE
New London Day
Dan Levy
Boston University Washington News Service
September 25, 2008
WASHINGTON – In a partial victory this month, Sen. Joe Lieberman, D-Conn., persuaded video-streaming Web site YouTube to crack down on content that promotes terrorism, but failed to secure more sweeping changes that critics say would amount to an assault on free speech.
Lieberman issued a press release on Sept. 11 commending the Google-owned site’s new uploading policy, which outlaws videos “inciting others to commit violent acts.” He also hailed Google’s efforts to remove videos depicting attacks on U.S. soldiers, which enforces the site’s existing ban on graphically violent content.
But in a letter sent in May to Google CEO Eric Schmidt, Lieberman also had asked YouTube to remove any content branded with logos associated with foreign terrorist organizations, a step Google was unwilling to take.
“While we respect and understand his views,” the company wrote on its policy blog in response to Lieberman’s letter, “YouTube encourages free speech and defends everyone’s right to express unpopular points of view.”
The right to incite violence is not protected by the First Amendment, Sam Bayard , assistant director of Harvard University’s Citizen Media Law Project, notes on the project’s blog. Yet, since Google is a private company, its member guidelines do not necessarily have to conform to free-speech laws.
Lieberman has the right to ask Google to enforce its own rule barring violent material on YouTube, according to Bayard, but he suggested that the senator’s request that the company pull content based solely on its source amounts to hypocrisy.
“Doesn’t our current government routinely accuse radical Islamists of being intolerant of opposing viewpoints and disrespectful to human rights?” Bayard wrote. “It undercuts our country’s position in the world when we turn around and exhibit a lack of tolerance and a willingness to curtail free expression.”
Bayard acknowledged that “this isn’t necessarily a legal issue” since Lieberman only requested that Google take action.
Similarly, a bill introduced in the House of Representatives last year merely recommended that sites such as YouTube take action to remove terrorist propaganda.
Lieberman has no plans to introduce legislation that would require video-streaming sites to remove terrorism-related content, according to Leslie Phillips, communications director for the Senate Homeland Security and Governmental Affairs Committee, which Lieberman chairs.
But Phillips did not rule out that the senator would consider asking sites to divulge to the federal government personal information on users who post videos branded with logos associated with Islamic terrorism.
“The senator expects YouTube to work with law enforcement when the site is being used to break the law,” Phillips said.
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Massachusetts Congressmen Say Bailout Plan Needs Work
CRISIS
Worcester Telegram and Gazette
Rachel Kolokoff and Guanlei Ren
Boston University Washington News Service
September 24, 2008
WASHINGTON - Massachusetts members of Congress voiced skepticism on Capitol Hill Wednesday as Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson again urged Congress to approve a $700 billion bailout plan for Wall Street.
Though Paulson and Bernanke said at the House Financial Services Committee hearing that the bailout is required to stave off a worsening financial crisis, congressmen are reluctant to approve such a large investment in devalued financial assets without further assurance that taxpayers will benefit in the long run.
“I think we need to protect the taxpayers of this country, and handing $700 billion to Wall Street with no conditions, no oversight and no accountability is irresponsible,” U.S. Rep. James P. McGovern, D-Worcester, said.
Rep. McGovern said the last time Congress made the mistake of giving the administration free rein was with the Iraq war.
“When they passed that resolution, they basically gave President Bush whatever he wanted and that turned out to be a tragedy,” Rep. McGovern said.
U.S. Rep. John W. Olver, D-Amherst, also said the plan needs more regulations.
“The plan as first put forward by Secretary Paulson was essentially a $700 billion blank check,” Rep. Olver said in a statement. “It offered a bailout for Wall Street with virtually unlimited powers that could not be reviewed by another federal agency.”
U.S. Rep. Richard E. Neal, D-Springfield, shared Rep. Olver’s concerns, emphasizing the need for further oversight to ensure a safe return on taxpayer investments. These billions are a loan, not a grant, he said.
“I would suggest we approach this judiciously, try to value the assets that are involved and put in place a corporation with great transparency that would sell off the assets of many of these companies, many of which are good, and pay back the federal Treasury,” Rep. Neal said.
U.S. Rep. Niki Tsongas, D-Lowell, said that while it may take some time to further develop the plan, it’s become clear that this government intervention is necessary.
“It seems to me that simply by promising to act as Secretary Paulson did last week that it’s created such a high level of expectation in the market that if we fail to address it we could have a real crisis on our hands,” Tsongas said.
U.S. Sen. John F. Kerry, D-Mass., in a written statement, said he is worried that taxpayers will pay the price. While immediate action is necessary, he said, he too is troubled by a lack of oversight.
“Republicans have consistently railed against oversight and accountability during the last eight years,” Sen. Kerry said. “Now taxpayers are forced to clean up their mess.”
U.S. Sen. Edward M. Kennedy, D-Mass., agreed that accountability is vital to the plan.
“There has to be full disclosure, and Americans everywhere must join together to make sure those who hold positions of responsibility are going to fulfill them both now and in the days and weeks to come,” Sen. Kennedy said in a statement.
At Wednesday’s hearing, Secretary Paulson said he understands that members of Congress are concerned but assured them the plan has taxpayers in mind.
“Let me make clear – this entire proposal is about benefiting the American people, because today's fragile financial system puts their economic well-being at risk,” he said. “When local banks and thrifts aren't able to function as they should, Americans' personal savings, and the ability of consumers and businesses to finance spending, investment and job creation, are threatened.”
In his testimony, Mr. Bernanke emphasized that America still faces “grave threats” to its financial stability.
He also said that, besides the bailout plan, the Federal Reserve had taken actions to increase liquidity and stabilize markets, including new financial agreements with the Bank of England, the Bank of Japan and the Bank of Canada.
Members of the Financial Services Committee, chaired by U.S. Rep. Barney Frank, D-Newton, criticized the bailout plan. Lawmakers said they understand that Wall Street and Main Street are linked but want a detailed spending plan. Taxpayer protection, committee members said, was the main concern.
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No Hasty Vote on the Bailout Plan for Maine Members of Congress
MAINE REACTION
Bangor Daily News
Maite Jullian
Boston University Washington News Service
9/24/08
WASHINGTON – Maine’s U.S senators and representatives all share the same point of view on the $700 billion bailout plan and the Bush administration’s efforts to have it approved by the end of the week: the Congress should not act in haste.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke warned the Senate Banking, Housing and Urban Affairs Committee on Tuesday and the House Financial Services Committee on Wednesday that delaying passage of the plan would cause a recession and increased joblessness.
But members of Congress, across party lines, are concerned about giving $700 billion to the Treasury without a thorough analysis of the plan and inclusion in the final version of guarantees of oversight and safeguards for taxpayers.
“It is not reasonable for the administration to ask Congress to rubber-stamp the proposal,” Republican Sen. Susan Collins said in an interview. “It is important that Congress takes time to carefully review the plan. It could potentially put at risk as much as $700 billion of taxpayers’ money.”
Paulson’s original plan has especially been criticized for its lack of oversight and concerns for taxpayers who are going to finance the bailout.
“If the plan looks like the first Paulson proposal, I would vote against it,” Democratic Rep. Mike Michaud said in an interview. “We shouldn’t act in haste. We ought to continue working and do whatever it takes to get it right. We have to make sure that all our concerns are answered.”
The Maine representatives and senators also said that taxpayers’ interest ought to be included in the plan.
“My overriding priority is to protect the financial security of the families and small businesses,” Democratic Rep. Tom Allen said in a statement. “I am working with members of Congress from both parties to craft a response to this crisis that minimizes taxpayer exposure.”
Democrats, as well as some Republicans, want to require the government to get a stake in companies that are helped so that taxpayers would get a return if those companies make a profit.
“I don’t think taxpayers should be responsible to bail out Wall Street,” Michaud said. “We have to make sure taxpayers are protected.”
Collins and Republican Sen. Olympia Snowe, with several colleagues, asked in a letter to House and Senate leaders that any “financial rescue” legislation provide for an independent inspector general to monitor and report on Treasury’s activities.
“We need to include sufficient regulatory reform to prevent it from happening in the future and sufficient oversight so it doesn’t result in propping up Wall Street executives’ salaries that have contributed to this crisis,” Collins said.
The Maine delegation also condemned Wall Street companies that acted out of greed and put the country in this financial crisis.
“We must assure that there are consequences for the companies and the executives that led us into this crisis,” Snowe said in a press release.
Michaud said that “golden parachutes should be eliminated” and Collins and Allen said they favor limiting excessive compensation for executives.
Snowe said the government should rethink the regulation of financial markets.
“This must also begin the process of reforming our regulatory framework across our financial markets,” she said. “Looking forward, we need increased accountability and transparency for all our markets, not just some, as it has been the case in the past.”
Michaud said Congress has to ensure good corporate governance, unlike in the past.
“If it had been regulated, we wouldn’t have gotten to that point,” he said.
Congress had been scheduled to adjourn Friday so that members could go home to campaign. But with the serious concerns remaining about the bailout plan, Congress is likely to remain in session at least through the weekend.
“I feel strongly that we should not adjourn,” Collins said. “There are still questions about how it would work and even if it is an appropriate response.”
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