DeFazio No Bailouts Plan
The Bush-McCain policies of trickle down economics and deregulation have created the worst crisis in our economy and financial markets since the Great Depression.
So it's not surprising the Bush Administration proposed a trickle down bailout plan that rewarded the big banks and CEOs that got us into this mess.
The bailout bill failed because, on balance, it did too much for Wall Street banks and not enough for hard-working American taxpayers.
To get our financial markets working again, we need to rein in the reckless strategies of Wall Street banks and buyout firms and stabilize the financial markets, while protecting taxpayers from the damage.
SEIU is supporting the "No Bailouts" Act sponsored by Rep. Peter DeFazio (OR-04) because it:
Stabilizes the financial markets without writing a blank check to the big banks and CEOs who got us into this mess.
Limits future losses by banks without asking taxpayers to pick up the tab. By suspending the application of fair value accounting standards by financial institutions, the bill will limit bank's artificial write-downs on the value of their mortgage-related and other securities.
Protects against predatory financial behavior by enacting permanent regulations against short-selling. By requiring the SEC permanently to block short-selling and restore the "up-tick rule" that blocks short-selling in a down market, the bill will protect against predatory financial behavior that harms investor confidence and hurts the ability of banks and other companies to raise needed capital.
Loans capital to banks that need it, with taxpayers making money on interest when the banks pay off the loans. By creating a Net Worth Certificate Program to allow the FDIC to lend short term capital to failing banks with the promise of repayment with interest, the bill replicates a successful program that worked to stabilize banks from 1982 to 1993. Banks that participate in the program must submit to strict oversight of their executives' compensation.
Restores consumer and small business confidence in banks. By requiring the FDIC to raise its insurance limit on costumers' deposits from $100,000 to $250,000, the bill assures consumers and small businesses their money is safe and helps eliminate runs on banks that threaten the stability of the financial markets.
The DeFazio No Bailouts plan is an important, short-term solution that protects taxpayers and their savings accounts and reins in the reckless behavior of big banks.
But unless we adopt a comprehensive economic plan that addresses the priorities of working Americans - a plan that deals with the underlying weaknesses in the economy - we will not succeed in reviving our economy and we will fail to achieve a sustainable economic recovery.
Congress needs to act on a more comprehensive plan to address rising unemployment, stagnant wages, declining home values, the healthcare crisis, and a tax system that is tilted in favor of the wealthy.
The Senate can start this week by taking up the economic stimulus plan passed last week by the House. The stimulus bill:
helps people hit hard by job losses
creates jobs by investing in American infrastructure
provides relief for people bracing themselves for record heating bills this winter, and
increases access to healthcare by providing Medicaid assistance to states