Stop Tuesday’s Bailout Vote AND the Lame Duck Session!
Nancy Pelosi Calls Congress Back from Recess to Vote on More Bailouts
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Nancy Pelosi knows her days as Speaker of the House are numbered, so she took the drastic step of calling the entire House of Representatives, which had gone into recess last Friday, back to Washington, D.C. to vote on yet another bailout!
The August recess is a necessary time for Members of Congress to return to their districts to hear from their constituents. Many Democrats are already avoiding Town Hall meetings in August, because they know their constituents are angry with their votes on jobs-killing, big-spending legislation. Now, instead of spending time with the people they were elected to represent, they are running back to Washington to spend more taxpayer money and to grab more power for the federal government.
There is some good news about Congress coming back to D.C., however. Before recess, Rep. Tom Price (R-GA) introduced a “No Lame Duck” resolution, urging Democrats to promise that they will not hold a “lame duck” legislative session after election day (when presumably many liberals will have lost their seats and will no longer be concerned about the consequences of their votes) for the purpose of passing hugely unpopular legislation like a national energy tax, more bailouts and the kickback to big labor known as “Card Check.”
Price, who chairs the Republican Study Committee, a Committee of the Conference’s most conservative members, issued this statement:
If the Democrat leadership is willing to bring lawmakers back to Washington in order to pass billions more in “stimulus” spending with tax hikes on job creators, the least they can do is tell the American people that they will not bring law makers back for a lame duck session to pass additional tax increases, deficit spending and special interest giveaways. This Lame Duck resolution will allow our Democrat colleagues to make it clear whether they plan to govern in accordance with the will of the American people or in spite of it.
We need you to call your Member of Congress today and urge them to send Speaker Pelosi a message by voting NO on the State Bailout Bill, H.R. 1586 and by voting YES on the “No Lame Duck” Resolution!
(Note: H.R.1586 was originally the FAA Air Transportation Modernization and Safety Improvement Act, but the House-passed text of the FAA authorization was replaced in the Senate with an amendment sponsored by Sens. Reid (D-NV) and Murray (D-WA) to include the bailout.)
Here are a few facts about the State Bailout Bill, H.R. 1586:
- It contains a total of $26.1 billion in temporary state bailouts.
- The bill provides $10 billion that states are REQUIRED to use to pay teacher salaries. States who receive this money must agree to not reduce their budgets below 2009 levels. This all but guarantees that further taxpayer funded bailouts will be required, because even if states wanted to take responsible action to reduce their spending, they are prohibited from doing so.
- This bill sets the stage for a nationalized education system by expanding federal government control over education and diminishing the role of parents, teachers and local communities.
- Democrats claim this money is necessary spending on children’s education. In reality, this is a blatant payoff for teachers unions, a significant Democrat base, which keeps demanding more money from taxpayers without producing better results for children. The Wall Street Journal made this point in a July 14th editorial, “School districts have been adding to their payrolls for decades without regard to student enrollment and much to show in academic improvement. Total education spending grew by 32% between 1999 and 2009, while K-12 enrollment has grown by less than 1% each year over the same time period. The reality is that districts could economize and trim the bureaucracy without having to lay off as many teachers as they claim.” But, this legislation would prohibit such economizing!
- The bill also increases Medicaid spending by $16.1 billion by extending the federal Medicaid matching rate of 6.2% to all states through December 2010, then phasing the matching rate increase down to 3.2% for the first three months of 2011, then to 1.2% for April through June 2011.
- The legislation includes $9.7 billion in permanent tax increases on multinational companies. This will absolutely kill jobs and further diminish the United States’ ability to compete with foreign corporations.
- The Congressional Budget Office (CBO) estimates that this bill will increase the deficit by $12.6 billion.
Call your Representatives and tell them to vote NO on H.R. 1586 and a YES vote on the “No Lame Duck” resolution.
http://www.themoralliberal.com/2010/08/09/stop-tuesdays-bailout-vote-and-the-lame-duck-session/
#2: An August Surprise from Obama?
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. A few key points:
1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.
2) Wall Street banks are alerting their clients privately to this possibility. Here is what some are cautiously saying publicly. This from Goldman Sachs:
GSE policies are one of a dwindling number of policy levers the administration has left to pull, so it is conceivable that changes could be made, though there is no sign that a policy change is imminent. The Treasury’s essentially unlimited ability to provide financial support to the GSEs creates an interesting situation over the next twelve months: the GSEs could potentially be used to provide additional support for the housing market and, to a lesser extent, the broader economy in 2H 2001.
And this from Mizuho Securities:
As policy makers ponder their next move the data suggests that they face not only a stalling recovery but a growing risk of deflation taking root in the economy. As a result, the Administration has turned back to industrial policies by approving the purchase of a sub-prime auto lender by GM as a means for pumping up domestic sales, especially since the latest auto sales data indicates that consumers are still responsive to incentives. This precedent increases the risk that the government will use its control of Fannie and Freddie to increase consumer cash flow and juice the economy again.
Moreover, Morgan Stanley is pushing a mortgage relief plan directly to Congress. On August 3, a top Morgan Stanley economist recommended to the Senate Budget Committee that Fannie and Freddie ease their lending standards to allow millions of Americans to refinance their mortgages.
3) Keep in mind the political and economic context. The nascent recovery is already running out of steam. Wall Street economists just downgraded the government’s second-quarter GDP estimate of 2.4 percent to around 1.7 percent. And as even Treasury Secretary Timothy Geithner is warning, the unemployment rate may well begin to rise back toward the politically toxic 10 percent level given such sluggish growth. Many in the White House thought the unemployment rate would be dropping sharply by this point in the recovery.
But that is not happening. What is happening is that the president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.
4) And don’t think the White House is worried about financial market reaction. If they thought it would pass Congress, they would be submitting a $200 billion Stimulus 2.0 (3.0?, 4.0?) right now.
August is supposed to be a slow month for Washington politics. But maybe not this one.
http://blogs.reuters.com/james-pethokoukis/2010/08/05/an-august-surprise-from-obama/