Democrats: "We Will Not Simply Hand Over A $700 Billion Blank Check To Wall St"

***UPDATE*** 11:11PM Democrats have begun to push back on the bailout plan offered by the Bush Administration, specifically with legislation that would cut the salaries of the CEO's whose firms participate in the bailout and by adding more oversight provisions. The Washington Post reports:

Congressional Democrats considering the Bush administration's emergency plan to shore up the U.S. financial system yesterday countered with their own demands, presenting draft legislation giving the government power to cut salaries of chief executives at firms that participate in the bailout and slash severance packages for their top management...

...Democrats sought to add oversight provisions and taxpayer protections to the proposal, which amounts to the largest government intervention in the private markets since the Great Depression. "We will not simply hand over a $700 billion blank check to Wall Street," House Speaker Nancy Pelosi (D-Calif.) said in a statement.

Under the proposal drafted by House Democrats, the Treasury would be required to force faltering firms that want to sell their troubled assets to the government to "meet appropriate standards for executive compensation." Those standards would include a ban on incentives that encourage chief executives to take "inappropriate or excessive" risks, a mechanism to rescind bonuses paid for earnings that never materialize and limits on severance pay.

Obama issued a "statement of principles" regarding the bailout plan. One principle it emphasized was that the plan cannot bail out Wall St. and ignore the troubles on Main St.:

"We must work quickly in a bipartisan fashion to resolve this crisis and restore our financial sector so capital is flowing again and we can avert an even broader economic catastrophe. We also should recognize that economic recovery requires that we act, not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America...

...Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.

Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.

The AP reports that Treasury Secretary Henry Paulson said Sunday that the government should resist including households in its bailout plan despite calls from Democrats to do so:

Treasury Secretary Henry Paulson said Sunday that the nation's credit markets remain frozen and Congress must move quickly to pass a $700 billion bailout package for financial firms. But key Democrats said the legislation needs changes to provide better protections for taxpayers and homeowners in danger of losing their homes.

"The credit markets are still very fragile right now and frozen," Paulson said in an interview on NBC's Meet the Press. "We need to deal with this and deal with it quickly."[...]

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Democrats said they understood the need for urgency but insisted that the measure needed to provide help for homeowners threatened with losing their homes, perhaps by changes in bankruptcy laws to allow for mortgages to be modified, and by capping pay and benefit packages for executives at the huge Wall Street firms that will be selling their bad debt to the government.

"I don't want the American taxpayer to get this bad debt and then the guy (whose company once held the bad loans) gets millions of dollars on his way out the door," said House Financial Services Chairman Barney Frank, D-Mass.

Paulson and President Bush have argued that the alternative would be credit markets that remain frozen, meaning that businesses will fail because they can't get the loans they need to operate and the economy will grind to a halt because consumers, who account for two-thirds of economic activity, won't be able to get the credit they need to keep spending.

At a rally in Charlotte Sunday Obama spoke about how he believed the government needed to deal with the financial crisis when it comes to households:

We must work quickly in a bipartisan fashion to resolve this crisis to avert an even broader economic catastrophe. But Washington also has to recognize that economic recovery requires that we act, not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America.

Read more of Obama's remarks.

Comments

[tktvr2]

I have heard a rumor that people are going to gather at the district offices of all 435 of our representatives, from 6 to 7 p.m. local time on Thursday evening Sept. 25.
I heard that the people are going to demand that we get an explanation of how we got into this mess.
I also heard that a two page history of how we got into this toxic economic state was going to be distributed at these gatherings.
Has anyone else heard about this?
Are people just going to show up, and hope for some explanation?
Can I find this two page history someplace on the internet?
Is Wall Street morally bankrupt?

[who38]

It's about time. We do need to react in more visible ways. Whining on the internet is not going to cut it. Yes, Wall Street is morally bankrupt; it is economically bankrupt as well.....except for the Lehman Brothers bonus fund.

[freedomfighter1]

Please someone, tell me if I'm wrong, but I though the average American doesn't like welfare. If a person can't feed their family because of some catastrophe and heaven forbid, has to apply for welfare, that person is unfortunately looked upon like society's lowest.
Yet, the government doesn't mind participating in Corporate Welfare starting with the Bush tax cuts and now topping off with a monstrous blank check. Since when do Rich people need help to stand on their own two feet. Then, they get to stay Rich while some of their employees are ruined.
I can't believe this is going to happen in a country where families are experiencing 'food insecurity' and millions don't have health insurance. We're not looking for a bailout. We just want to be treated as importantly as BIG business.
The Repubs have to decided, either give BIG business what it wants and deregulate, or get in the mix. THEY CANT HAVE IT BOTH WAYS!

[who38]

These are INCENTIVES or BAILOUTS; not welfare. OWM NEVER receive welfare.

[DonDavis]

Another Wall St. Shake-Up: Investment Firms Bought Out by 1-800-Mattress
http://satiricalpolitical.com/?p=3346

[NevadaLiberal]

Democratic leadership....Pelosi and Reid....this is your last chance to get it right. You both have stood by and let this criminal outfit run roughshod over the Nation, the Constitution, the Citizens. You did very little to stop the abuse of power. Your weak will and terrified heart watched as the GOP evicerated this country. You did nothing because you were scared to be painted as unpatriotic. You were terrified of public opinion polls that would see you as weak and obstructionists. You were shaking at the thought of standing up and getting in the way. Remember that Chinese man who gathered up his belongings and stood up and stood in the way of that tank? Well that wasn't you. But now along comes another tank....what will you do Democrats?

[who38]

Tank.

[DangerousBeauty]

This plan is just Bush's version of American's paying for their own rape kits, a la Palin in Alaska. There are only two ways way to sort this out; demand and hold impeachment proceedings now or let the takeover of America by Bush and his handlers proceed and sort it all out after the revolution. The first is a guaranteed right of a democratic nation to demand accountability of its elected officials, the latter is the God given right of all people oppressed by corrupt leaders. Nancy Pelosi has a responsibility to the American people to put an end to the travesty that is the Bush administration by calling for impeachment now. Then, by this administration's response, all Americans will see if the country is already lost.

[who38]

Bush's plan is a way of paying for your own rape; not even Palin went that far.

[Paul Peete - Huffpost Blogger]

Pretty close analogy though we are rape victims being forced to pay for our rape kits just like Sarah did in Wasilla.

[Project4NuBostonTeaParty]

To repeat my earlier plea from another thread, to all who write here:

Please, everyone, express your concerns to your Representative and your Senators NOW. Demand that they listen to you. Demand that they represent you. Demand that they WRITE this bill and then READ the final version before they vote.

Call them EVERY DAY until they vote.

If you believe that this "rush job" is a ploy -- like so many other rush jobs in the past 8 years that the Democrats have caved in to -- tell them to slow down and investigate every facet of this bill. Tell them to weigh other solutions offered by other experts. Tell them you will not vote in November if they cave one more time.

Do not sit back and let this happen without attempting to change it.

Our country is dying.

[sharksfansd]

Just composed my letter and sending it off to Feinstein, Boxer, and Hunter in a moment.

[southbay]

I'm getting tired of listening to these neo-con fools trying to scare us into giving them the keys to the bank. Look, we fixed this kind of failure in the 1930's. This is not rocket science. All we need to do is go back and re-invoke the New Deal.

The fact of the matter is that the neo-con destruction of the Glass-Steagal Act (circa 1933) is what caused this crisis. Let's take Phil Gramm and lock him up in one of his Texas jails, then undo all his legislation for the past couple decades and fix this mess.

Frankly, I'm not afraid to say that the GOP has been taken over by a bunch of criminals and we need to put them in prison where they can't harm the nation any longer. The voters are entirely too polite about this whole thing. A criminal is a criminal, whether it's through the window at night, or through the front door in a lie. Jail them and be done with it!

[icechaos]

http://www.city-journal.org/html/10_1_the_trillion_dollar.html

[rwt1138]

Why do you keep posting this irrelevant 8 year old article about a completely unrelated topic?

[rocky786]

Why the hell is there still a filthy P I G picture right next to the top comments with the caption "Kathy Freston Help Stop Cruelty to Animals" ? Kindly remove it @ the earliest, it is making reading comments an unpleasant experience!~

The p i g is one of the filthiest animals on earth. It lives and thrives on muck,
faeces and dirt.

In America, most people
consume pork. Many times after dance parties, they have swapping of wives;
i.e. many say "you sleep with my wife and I will sleep with your wife." If you eat
p i g s then you behave like p i g s.

[who38]

and if you eat beef, you are full of bull.

[WIpatriot]

You have encouraged me to begin the laughing.

[sandrarita]

Congress should not let Bush or Paulson strongarm them. Good for Barney Frank and Nancy Pelosi. There is no reason why they should give a blank check to the people that are responsible for the crisis. If Paulson (ex CEO of Goldman-Sachs, one of the bailouts last week) can't compromise then f--k him and let the economy grind to a halt. Perhaps we need to see what this means and let people see what this means - in real terms, not the fastball rhetoric like Bush used to get us into his dirty little war. Perhaps if the economy grinds to a halt, enough people will scream loud enough and long enough to get these b-----ds out now even before the election.

[icechaos]

http://www.city-journal.org/html/10_1_the_trillion_dollar.html

[rwt1138]

Doesn't matter how many times you post it, still won't make it relevant to the topic.

[who38]

But we need to contact Barney daily and let him know that we want him to stand strong. Today's LA Times has a story in which Barney appears to be doing a Neville.

[ThomasDark]

There is plenty of outrage on here. We need to stop this plan...not simply amend it. There ARE alternatives.

Congress can actually slow down and have public inquiries as to the possible alternatives. Paulson pushing for this to pass as quickly as possible is definitely scary. Do any of you honestly believe the sky will fall if we don't pass this by Friday? We should be alarmed that the original wording gave him absolute power with no congressional oversight or judicial reprise. He and Bush don't want us to look deeper. They want to pressure us with a false sense of armageddon.

Robert Reich said in his blog: (our 22nd secretary of labor)
"A better idea would be for the Fed and Treasury to organize a giant workout of Wall Street -- essentially, a reorganization under bankruptcy, for whatever firms wanted to join in. Equity would be eliminated, along with most preferred stock, creditors would be paid off to the extent possible. And then the participants would start over with clean balance sheets that reflected new, agreed-upon rules for full disclosure, along with minimum capitalization. Everyone would know where they stood. Bad debts would be eliminated. Taxpayers wouldn't get left holding the bag. And there would be no "moral hazard" incentive for future financial wizards to take giant risks with other taxpayers' money."

If you think Pelosia, Obama, Reid and Dodd are reading our comments on Huffingtonpost...you will need to pull out your checkbook.

Please contact them.

[who38]

I agree with Reich. Hope he shows up on the Sunday shows. I am going to e-mail the above comments to all my reps. Thanks for providing the statement.

[rocky786]

Why the hell is there a filthy P I G picture right next to the top comments with the caption "Kathy Freston Help Stop Cruelty to Animals" ? Kindly remove it @ the earliest, it is making reading comments an unpleasant experience!~

The p i g is one of the filthiest animals on earth. It lives and thrives on muck,
faeces and dirt.

In America, most people
consume pork. Many times after dance parties, they have swapping of wives;
i.e. many say "you sleep with my wife and I will sleep with your wife." If you eat
p i g s then you behave like p i g s.

[sandrarita]

Pigs thrive on muck and dirt because they need to cool off. Perhaps the muck and dirt of the earth is too much for your sensitive soul - aren't you complaining about the bloody corpses that Ms. Palin seems to like her pictures taken with. People like her are the real pigs. Remember Animal Farm? the pigs represented the people that are right now causing this whole crisis.

[rocky786]

" Ms. Palin seems to like her pictures taken with. People like her are the real pigs. " :O

OBAMA 08

[Diogenes9]

How sweet.

It's "Socialism" when the government has to help it's own people.

But it's a "bailout" when the government has to help the moneyed, stock owning class.

How sweet.
Please continue to abuse us. Four more years of Republican abuse please. We love every minute of it.

McCain/Palin 'O8!

[jerseymaiden]

Democrats AND republicans in Congress: If you have any love for this country, and the people who pays its bills (and yours), SHUT this latest Bush/Cheney outrage DOWN NOW!!!

The USA is about to be extinguished in a mine-collapse of unnecessary debt. This whole thing is a giant scare tactic designed to make a few people very rich, just like the Iraq War. The world is *not* ending -- this bailout is criminal, un-American. JUST SAY NO!

[who38]

And the next shoe to fall will be Social Security; the money will be needed to pay for the bail-out and the Lehman CEOs bonus program.

[waitforme]

Part 2 TO ALL CONGRESSPEOPLE:

And, reading the above article telling us the current 'update', [with the paragraph which says the Paulson/Bush document they want Congress to sign off on, has a paragraph in it which disallows any modifications to it at all], what about foreclosures? Get the foreclosures back on the menu! This is a beautiful and just idea from Schumer which bears implementing. After getting back a document which DOES NOT SAY there can be no changes made to this document, 1. Stop all foreclosures. 2. Stop all bonuses and severance pays for leaders of failed companies PLUS roll their salaries down to governmental salary levels; why should an organization owned by the government be paying directors more than any other governmental employee? [Remind them: If the government didn't step in, they would have no job at all.] 3. include OVERSIGHT and STRONG, CLEAR, PUBLIC RULES FOR OPERATION OF THESE COMPANIES FROM NOW ON. And then OVERSEE them.

CONGRESSPEOPLE: Do what is right, on all counts. Be stubborn about it. Do not give in to giving money to cronies and protecting one's own money when so many others are hurting. Do not compromise. Do not care about what 'people' will think of you. DO WHAT YOU KNOW IS RIGHT AND JUST.

[waitforme]

TO ALL THE REPRESENTATIVES: (Part 1)

If the Representatives are STILL working on modifying the document given to them by Paulson/Bush I have to think they are ignoring a paragraph which will nullify all their late-night modifications and they think they will be long down the road when the thing comes to court -- or that they think they can later say, 'Well, we tried!'

Well, that won't work, will it? The paragraph is here:
'Section 8: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.'

It seems to me that until this paragraph is taken out, in toto, no modifications can exist and all the committees and all the late nights will have gone for nought.

THEREFORE, THE PAULSON/BUSH DOCUMENT MUST BE SENT BACK WITH A DEMAND THAT THIS PARAGRAPH BE DELETED. IN FULL. BEFORE CONGRESSPERSONS CAN TAKE ANYOTHER STEP; CERTAINLY BEFORE ANY ONE OF OUR REPRESENTATIVES SIGNS IT.

(SEE Part 2)

[pagranny]

They must take out section 8! They also must not reward the people that got us into this mess to start with. Why should we give executives "golden parachutes" when they failed in their job? If the "ordinary worker" screwed up in their job they would be fired without any benefits, so why is it different for the executives? If you don't perform in your job then you get canned - no benefits of any kind. There is a concern that if the executives don’t get their "golden parachutes" then they won’t participate in the program. So what is the loss? Let the company go down with a lot of publicity naming the executives that didn’t want to help the company survive and see if another company wants to hire them. It all comes down to being responsible for your actions. You don’t get rewards for bad actions!