J's Cafe Nette

Archive for September 28th, 2008

Ran across this over at RedState.

How much proof is needed (in their own words) before folks realize Congress had the heads up long ago that Fannie Mae and Freddie Mac were run by corrupt individuals and headed for serious trouble?

This is a bit long but the comment at the very end from President Clinton is most telling.

Tweet This Post

While Senator Obama is claiming it was he alone and John McCain had nothing to do with the bailout deal, the Washington Post, no friend of McCain’s, haswritten a piece that gives the inside look of what happened on Thursday in Washington.

When Sen. John McCain made his way to the Capitol office of House Minority Leader John A. Boehner (R-Ohio) just past noon on Thursday, he intended to “just touch gloves” with House Republican leaders, according to one congressional aide, and get ready for the afternoon bailout summit at the White House.

Instead, Rep. Paul D. Ryan (Wis.), the ranking Republican on the House Budget Committee, was waiting to give him an earful. The $700 billion Wall Street rescue, as laid out by Treasury Secretary Henry M. Paulson Jr., was never going to fly with House Republicans, Ryan said. The plan had to be fundamentally reworked, relying instead on a new program of mortgage insurance paid not by the taxpayers but by the banking industry.

McCain listened, then, with Sen. Lindsey O. Graham (S.C.), he burst into the Senate Republican policy luncheon. Over a Tex-Mex buffet, Sens. Robert F. Bennett (Utah) and Judd Gregg (N.H.) had been explaining the contours of a deal just reached. House Republicans were not buying it. Then McCain spoke.

“I appreciate what you’ve done here, but I’m not going to sign on to a deal just to sign the deal,” McCain told the gathering, according to Graham and confirmed by multiple Senate GOP aides. “Just like Iraq, I’m not afraid to go it alone if I need to.”

For a moment, as Graham described it, “you could hear a pin drop. It was just unbelievable.” Then pandemonium. By the time the meeting broke up, the agreement touted just hours before — one that Sen. Lamar Alexander (Tenn.), the No. 3 GOP leader, estimated would be supported by more than 40 Senate Republicans — was in shambles.

An incendiary mix of presidential politics, delicate dealmaking and market instability played out Thursday in a tableau of high drama, with $700 billion and the U.S. economy possibly in the balance. McCain’s presence was only one of the complicating factors. Sen. Barack Obama played his part, with a hectoring performance behind closed doors at the White House. And a brewing House Republican leadership fight helped scramble allegiances in the GOP.

It is unclear whether the day’s events will prove to be historically significant or a mere political sideshow. If the administration and lawmakers forge an agreement largely along the lines of the deal they had reached before McCain’s arrival Thursday, the tumult will have been a momentary speed bump. If the deal collapses, the recriminations spawned that day will be fierce.

But if a final deal incorporates House Republican principles while leaning most heavily on the accord between the administration, House Democrats and Senate Republicans, all sides will be able to claim some credit — even if the legislation is not popular with voters.

“If there is a deal with the House involved, it’s because of John McCain,” Graham, one of the Arizonan’s closest friends in the Senate, said yesterday.

In truth, McCain’s dramatic announcement Wednesday that he would suspend his campaign and come to Washington for the bailout talks had wide repercussions.

Democrats, eager to reach a deal before McCain could claim credit, hunkered down and made real progress ahead of his arrival. Conservative Republicans in the House reacted as well, according to aides who were part of the talks.

[Emphasis mine]

There were specific things the House Republicans did not want in the package and since Pelosi and Reid didn’t want to take full blame for the bill, even though they had enough votes to pass it and excluded the House republicans “by mistake” it appears the House Republicans got things cleaned up a bit and with the backing of Sen. McCain.

It looks like Boehner and Company had more sense than the Republican senators or the Democratic representatives and that’s why they were not invited to the negotiating table.

In walks McCain, he makes a statement that even if he has to stand alone he will, and out comes a better proposal. No one is happy about it, but one candidate shouldn’t be taking all the credit for it. Look at the table in the link Sue provided here and see how much worse it would have been without the House Republicans sticking to their guns.

Tweet This Post

The truth is always in the details and until this is committed to paper we won’t know exactly what is going on. I did hear on the news today that the written proposal will be put on the internet for us to read before passage.

Here is the summary of the highlights as put out by Speaker Pelosi:

IMPROVING THE FINANCIAL RESCUE LEGISLATION

Significant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize American financial markets — including cutting in half the Administration’s initial request for $700 billion and requiring Congressional review for any future commitment of taxpayers’ funds. If the government loses money, the financial industry will pay back the taxpayers.

3 Phases of a Financial Rescue with Strong Taxpayer Protections.

• Reinvest in the troubled financial markets … to stabilize our economy and insulate Main Street from Wall Street

• Reimburse the taxpayer … through ownership of shares and appreciation in the value of purchased assets

• Reform business-as-usual on Wall Street … strong Congressional oversight and no golden parachutes

CRITICAL IMPROVEMENTS TO THE RESCUE PLAN.
Democrats have insisted from day one on substantial changes to make the Bush-Paulson plan acceptable — protecting American taxpayers and Main Street — and these elements will be included in the legislation

Protection for taxpayers, ensuring THEY share IN ANY profits

• Cuts the payment of $700 billion in half and conditions future payments on Congressional review

• Gives taxpayers an ownership stake and profit-making opportunities with participating companies

• Puts taxpayers first in line to recover assets if participating company fails

• Guarantees taxpayers are repaid in full — if other protections have not actually produced a profit

• Allows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families

Limits on excessive compensation for CEOs and executives

New restrictions on CEO and executive compensation for participating companies:

• No multi-million dollar golden parachutes

• Limits CEO compensation that encourages unnecessary risk-taking

• Recovers bonuses paid based on promised gains that later turn out to be false or inaccurate

Strong independent oversight and transparency

Four separate independent oversight entities or processes to protect the taxpayer

• A strong oversight board appointed by bipartisan leaders of Congress

• A GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse

• An independent Inspector General to monitor the Treasury Secretary’s decisions

• Transparency — requiring posting of transactions online — to help jumpstart private sector demand

Meaningful judicial review of the Treasury Secretary’s actions

Help to prevent home foreclosures crippling the American economy

• The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year

• Extends provision (passed earlier in this Congress) to stop tax liability on mortgage foreclosures

• Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis — allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks

Office of Speaker Nancy Pelosi – September 28, 2008

*Update:

House Republican Whip Roy Blunt’s office provides this side-by-side comparison of Treasury Secretary Henry Paulson’s original Wall Street bailout proposal with the final compromise agreed to over the weekend by congressional and Treasury negotiators:

Go here to read.

Tweet This Post

According to the Washington Post:

Congressional leaders and the Bush administration last night struck a historic accord to insert the government deeply into the nation’s financial markets, agreeing to spend up to $700 billion to relieve Wall Street of troubled assets backed by faltering home mortgages.

Negotiators emerged from a marathon session in the Capitol about 12:30 a.m. to announce that they had reached agreement on a proposal to give Treasury Secretary Henry M. Paulson Jr. broad authority to organize one of the biggest government interventions in the private sector since the Great Depression.

Tweet This Post

Is civility disappearing totally from government?

Has this financial crisis created an atmosphere so unhealthy that we now have the Speaker of the House referring to Republicans as “unpatriotic” for their not attending a scheduled meeting?

Perhaps she should have conferred with Senator Dodd prior to uttering those words:

More from the House GOP offices:

Well, we didn’t go to yesterday’s meeting because they didn’t invite us. Dodd even said on NBC nightly news last night that they just forgot.
It’s pretty infuriating.

[emphasis-mine]

Interesting that the Democrats were so anxious to pin the failure of the original deal on the financial bail out on the Republicans and John McCain when it appears it was their own Presidential candidate who inflicted the damage at the White House meeting:

…..This according to Bob Schieffer of CBS.[emphasis-mine]

Paulson called Lindsey Grahamnesty and said, “Look, I need the House Republicans. I need Republicans on this. We can’t get anywhere without them. You’ve gotta call McCain. He’s the only one that can do it.” So that’s why McCain goes to Washington, and they end up having a four o’clock meeting at the White House yesterday. They all think they’re going into a negotiating session. The president, in order to let everybody be heard, deferred to various Democrats, and every one of the Democrats — Pelosi, Reid, Dodd, and Frank — declined to speak and deferred to Obama. So Obama became the official Democrat spokesman in the meeting. This was to hype Obama’s leadership and presidential aura and so forth. What happened next, the first thing out of Obama’s mouth — Paulson is in the meeting — is he starts ripping the House Republican proposal and asks Paulson what he thinks of it.

This led Boehner and the other Republicans in there to think they have been sandbagged. We found out this morning that Obama had no clue — because he was in transit doing other things, he had no clue — what the House Republican position was. What happened was that on the way to the meeting sometime during the day, Obama’s staff received an e-mail from Treasury Department employees who work for Paulson detailing the House Republican plan. So when the Democrats deferred to Obama, he launched into that. He had no clue what it was. That’s why he asked Paulson for his comments. I don’t know what Paulson said, but this is what led to the fireworks. This is what led to everything breaking down in there. This is why Dingy Harry walked out, ’cause it didn’t work.

[All references to Senators by other than their proper title are those of Rush Limbaugh]

Remember it was the Democrats who insisted the insertion of presidential politics was not helpful in this debate yet they allowed their candidate to speak on their behalf.

If this is indeed what transpired, then not only did the Democrats stretch the truth at the completion of the meeting, but it was extremely disrespectful to the President of the United States.

What egos these Senators and Congresspersons must have to place themselves and their politics above the Executive and the country which it serves.

If memory serves, both McCain and Obama are Senators first candidates second and they should be in Washington in their official capacity as such in an attempt to move this process forward, not garner political points.

There is plenty of blame to go around in this financial mess but deliberately falsifying facts (on either side of the aisle) and calling members of the opposing party “unpatriotic” serves no purpose and the effects will no doubt be long lasting.

*For those who would like to read the thoughts of an international auditor in the insurance industry regarding this crisis check out the piece at the link. Quite an interesting and enlightening read.

Tweet This Post

I live a hop, skip and a jump from Charlotte, NC, and we have seen gas lines for the past week for the first time since the seventies.

It seems the refineries that supply our area are still not at full capacity after the hurricane in Texas a couple of weeks ago.

Fortunately, yesterday my husband was able to find a gas station with only one person ahead of him and was able to fill up all three vehicles. His truck for emergencies and the two vans for day to day business and taking the grandchildren to or from school. Otherwise they stay parked.

In case you think we are gas guzzlers, we have not filled up in about a month on any of the vehicles. We try to do everything in one trip with one vehicle, but I hate to ride in that truck! It’s always such a mess.

Tweet This Post