Bailout Update: Senate Passes Bailout, House Still Unclear

The Senate voted 75-25 in favor of the bailout, with support from both sides of the aisle, essentially an even vote between Republicans and Democrats in the Senate. See vote count. The Senate included a host of tax breaks for businesses and families in order to make the bill more popular.

See Below for the Action Step You Should Take Today: The Battle of the Bailout is Not Yet Over.

Senator Bernie Sanders and Senator Russ Feingold used their no votes to put out good statements opposing the bailout. Sanders has a comprehensive critique he said: “If a bailout is needed, if taxpayer money must be placed at risk, if we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from President Bush’s tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation who should pick up the tab, not ordinary working people.” Sanders had urged a modest tax on the wealthiest Americans to pay for the bailout; a five-year, 10 percent surtax on families with incomes of more than $1 million year and individuals earning over $500,000 to raise $300 billion to help bankroll the bailout. Senators, however, set aside the amendment on a voice vote. Some highlights of Sanders speech:

“This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight because the oversight board members have all been hand picked by the Bush administration. This bill does not effectively deal with the issue of foreclosures and addressing that very serious issue, which is impacting millions of low- and moderate-income Americans in the aggressive, effective way that we should be. This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.”

*****

“This bill does not deal with the absurdity of having the fox guarding the hen house. Maybe I’m the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the Secretary of the Treasury, the former CEO of Goldman Sachs, who along with other financial institutions, actually got us into this problem. Now, maybe I’m the only person in America who thinks that’s a little bit weird, but that is what I think.

“This bill does not address the major economic crisis we face: growing unemployment, low wages, the need to create decent-paying jobs, rebuilding our infrastructure and moving us to energy efficiency and sustainable energy.”

*****

“The American people are bitter. They are angry, and they are confused. Over the last seven and a half year, since George W. Bush has been President, 6 million Americans have slipped out of the middle class and are in poverty, and today working families are lining up at emergency food shelves in order to get the food they need to feed their families. Since President Bush has been in office, median family income for working-age families has declined by over $2,000. More than seven million Americans have lost their health insurance. Over four million have lost their pensions. Consumer debt has more than doubled. And foreclosures are the highest on record. Meanwhile, the cost of energy, food, health care, college and other basic necessities has soared.

“While the middle class has declined under President Bush’s reckless economic policies, the people on top have never had it so good. For the first seven years of Bush’s tenure, the wealthiest 400 individuals in our country saw a $670 billion increase in their wealth, and at the end of 2007 owned over $1.5 trillion in wealth. That is just 400 families, a $670 billion increase in wealth since Bush has been in office.

“In our country today, we have the most unequal distribution of income and wealth of any major country on earth, with the top 1 percent earning more income than the bottom 50 percent and the top 1 percent owning more wealth than the bottom 90 percent. We are living at a time when we have seen a massive transfer of wealth from the middle class to the very wealthiest people in this country, when, among others, CEOs of Wall Street firms received unbelievable amounts in bonuses, including $39 billion in bonuses in the year 2007 alone for just the five major investment houses.”

Senator Sanders full speech is available here.

Now action moves to the House of Representatives where the leadership is trying to figure our how to deal with the Senate bill. Progressives who oppose the bailout are also determining their response. There are two issues being urged by progressives: bankruptcy reform and economic stimulus.

Bankruptcy reform is the least costly and most sensible step that could be taken by the Congress. It will cost the taxpayer nothing and will prevent a massive redistribution of wealth from working class Americans to the wealthiest bank owners. The goal is to allow a judge to renegotiate the mortgage of the homeowner so they can afford it and keep their home. This has not been voted on in either the House or Senate because the leadership has kept it out of the bills. It is being kept out because the banks oppose it. They would prefer to take the homes from homeowners rather than take their payments on a slower basis. If the bankruptcy provision were included it would ameliorate the subprime mortgage problem and demonstrate that homeowners are not to blame and the real problems in the finance industry are much bigger.

Some are trying to include the economic stimulus package being considered by the House as part of the bailout. This effort, being led by Rep. Jim McDermott, is facing an uphill battle. Majority Leader Hoyer says it is unlikely to be included blaming Republican opposition. Once again, the Democratic leadership is not leading but using Republican opposition to stifle sensible economic policy.

It is likely the bailout will move to the House Floor without any amendments being allowed. The vote is expected tomorrow.

Today people should be making calls to Congress urging them to slow down and consider this massive expenditure carefully. Points to make:

  • Do not let make the tax payers pay to clean up Wall Street’s mess.
  • Make sure that CEO’s do not benefit from the bailout.
  • Include a bankruptcy provision to protect homeowners.
  • We need a broader economic stimulus that should be included in the bill.

The bailout has shown Americans two things: first the money is available to fix the problems faced in the United States. Here we are two weeks into a “crisis” and the Congress is finding $700 billion to save Wall Street. Second, if the people respond to an organized fashion we can make a difference. The people wrote, called and emailed their representatives and the steamroll slowed. The bill was improved. And, frankly, only a small percentage of Americans did anything – and most only did something that took a few minutes – a click and send email or a telephone call. Imagine if Americans really demanded what they wanted – a clean energy economy, revitalized cities, rebuilt infrastructure, health care for all. These are all items that Americans know are needed but we are not demanding with the ferocity they deserve. The bailout shows that even with the power of corporate dollars against the people, the people can prevail. The money is available what is lacking is political pressure from the people.

It is important to recognize our power because it can become a fever than infects Americans. We all know the country is on the wrong course in a number of ways, now we know we can make a difference. This is a powerful lesson we must share with our fellow Americans so that we have the courage to create the future we want.

Take Action NOW: Call Congress 800-473-6711. Call your representative, Speaker Pelosi and Majority Leader Hoyer to demand that the bailout include protection for homeowners through bankruptcy reform – this will cost the taxpayers nothing; and demand that the bailout include an economic stimulus that builds the economy from the bottom up. We need a strong foundation not a trickle down economy.

Kevin Zeese co-directs Popular Resistance and is on the coordinating council for the Maryland Green Party. Read other articles by Kevin, or visit Kevin's website.

3 comments on this article so far ...

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  1. Poilu said on October 4th, 2008 at 1:05am #

    “… House Still Unclear”

    Not anymore, Kevin. And provisions benefitting the average “Joe” (OR addressing the root causes of this mayhem) are completely nil! It’s just one big corporate handout, “sweetened” via tax BREAKS for the criminal class alone!:

    “House Passes Bailout Bill”
    http://www.commondreams.org/headline/2008/10/03-12

    ‘ The US House of Representatives on Friday approved a revised 700-billion-dollar Wall Street bailout, bowing to intense pressure to help avert a global economic meltdown.

    ‘ The House, which sparked market and political turmoil by rejecting an earlier version of the bailout on Monday by 228 votes to 205, voted 263 in favor to 171 against in favor of the largest US government economic intervention since the Great Depression of the 1930s. …’

    (Read in full, It’s a remarkably “deferential” piece from the once-respectable AFP, suggesting that the agency’s acronym now rightly stand for “Associated [French] Press.”)

  2. Poilu said on October 4th, 2008 at 1:32am #

    Here’s one I consider a FAR more honest, innately populist assessment of this Congressional betrayal:

    “US House backs Wall Street bailout”
    Democrats credit Obama with shifting vote
    By Bill Van Auken [WSWS; 4 October 2008]
    http://www.wsws.org/articles/2008/oct2008/bail-o04_prn.shtml

    ‘ In its second vote in five days, the US House of Representatives approved a massive bailout package for the major banks and finance houses. The legislation, passed by a vote of 263 to 171 Friday afternoon, gives US Treasury Secretary Henry Paulson virtually unrestricted powers to use at least $700 billion to buy up largely worthless paper assets from Wall Street using taxpayers money.

    ‘ The approval of the measure by a wide margin followed the defeat in the House of what was essentially a similar bill on Monday. Then, on Wednesday, the Senate approved a revised bailout package that was supplemented by nearly $150 billion in tax cuts and other measures aimed principally at winning support from the Republican right.

    ‘ These revisions brought the total price tag for the package to more than $850 billion, with many predicting that it will end up being only the first installment on a continuing transfer of public wealth to the coffers of the countrys major private banks. …’

  3. Mary Moench said on October 4th, 2008 at 6:24pm #

    Reform the Chapter 13 Bankruptcy laws as they where before. The laws are so unfair and the money is so tight on a monthly basis that a family with children cannot survive. I There is no money for any extras like a holiday dinner, xmas, dancing, baseball and a homecoming dress for my daughter. But yet, the trustee is making a commission on us and the judge can get away with treating us like dirt in court while others walk away with hundreds of thousands in debt and we suffer. The best is credit companies make money on y0ur debt coarses @ $100.00 a person and you have to take a day off from work complete the coarse! WE NEED HELP NOW, NOT IN 3 MONTHS, NOW!!!! I WILL BE THE VOICE IN THIS RFORM AND I WILL NOT STOP UNTIL SOMETHING IS DONE. HELP THE PEOPLE WHO ARE IN CHAPTER 13.