Don't Make Working People Bail Out Wall Street

This country faces many serious problems in the financial market, in the stock market, in our economy. We must act, but we must act in a way that improves the situation.

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 at all with how we got into this crisis in the first place and the need to undo the deregulatory fervor which created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds. This bill does not address the issue that has taken us to where we are today, the concept of too big to fail. In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions like the Bank of America swallow up other gigantic financial institutions like Countrywide and Merrill Lynch. Well, who is going to bail out the Bank of America if it begins to fail? There is not one word about the issue of too big to fail in this legislation at a time when that problem is in fact becoming even more serious.

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.

There is one issue that is even more profound and more basic than everything else that I have mentioned, and that is if a bailout is needed, if taxpayer money must be placed at risk, whose money should it be? In other words, who should be paying for this bailout which has been caused by the greed and recklessness of Wall Street operatives who have made billions in recent years?

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. We have seen the incredible greed of the financial services industry manifested in the hundreds of millions of dollars they have spent on campaign contributions and lobbyists in order to deregulate their industry so that hedge funds and other unregulated financial institutions could flourish. We have seen them play with trillions and trillions dollars in esoteric financial instruments, in unregulated industries which no more than a handful of people even understand. We have seen the financial services industry charge 30 percent interest rates on credit card loans and tack on outrageous late fees and other costs to unsuspecting customers. We have seen them engaged in despicable predatory lending practices, taking advantage of the vulnerable and the uneducated. We have seen them send out billions of deceptive solicitations to almost every mailbox in America.

Most importantly, we have seen the financial services industry lure people into mortgages they could not afford to pay, which is one of the basic reasons why we are here tonight.

In the midst of all of this, we have a bailout package which says to the middle class that you are being asked to place at risk $700 billion, which is $2,200 for every man, woman, and child in this country. You're being asked to do that in order to undo the damage caused by this excessive Wall Street greed. In other words, the "Masters of the Universe," those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse. Now, as the American and world financial systems teeter on the edge of a meltdown, these multimillionaires are demanding that the middle class, which has already suffered under Bush's disastrous economic policies, pick up the pieces that they broke. That is wrong, and that is something that I will not support.

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 Bush's tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation, those people are the people who should pick up the tab, and not ordinary working people. I introduced an amendment which gave the Senate a very clear choice. We can pay for this bailout of Wall Street by asking people all across this country, small businesses on Main Street, homeowners on Maple Street, elderly couples on Oak Street, college students on Campus Avenue, working families on Sunrise Lane, we can ask them to pay for this bailout. That is one way we can go. Or, we can ask the people who have gained the most from the spasm of greed, the people whose incomes have been soaring under president bush, to pick up the tab.

I proposed to raise the tax rate on any individual earning $500,000 a year or more or any family earning $1 million a year or more by 10 percent. That increase in the tax rate, from 35 percent to 45 percent, would raise more than $300 billion in the next five years, almost half the cost of the bailout. If what all the supporters of this legislation say is correct, that the government will get back some of its money when the market calms down and the government sells some of the assets it has purchased, then $300 billion should be sufficient to make sure that 99.7 percent of taxpayers do not have to pay one nickel for this bailout.

Most of my constituents did not earn a $38 million bonus in 2005 or make over $100 million in total compensation in three years, as did Henry Paulson, the current secretary of the Treasury, and former CEO of Goldman Sachs. Most of my constituents did not make $354 million in total compensation over the past five years as did Richard Fuld of Lehman Brothers. Most of my constituents did not cash out $60 million in stock after a $29 billion bailout for Bear Stearns after that failing company was bought out by J.P. Morgan Chase. Most of my constituents did not get a $161 million severance package as E. Stanley O'Neill, former CEO Merrill Lynch did.

Last week I placed on my Web site, www.sanders.senate.gov, a letter to Secretary Paulson in support of my amendment. It said that it should be those people best able to pay for this bailout, those people who have made out like bandits in recent years, they should be asked to pay for this bailout. It should not be the middle class. To my amazement, some 48,000 people cosigned this petition, and the names keep coming in. The message is very simple: "We had nothing to do with causing this bailout. We are already under economic duress. Go to those people who have made out like bandits. Go to those people who have caused this crisis and ask them to pay for the bailout."

The time has come to assure our constituents in Vermont and all over this country that we are listening and understand their anger and their frustration. The time has come to say that we have the courage to stand up to all of the powerful financial institution lobbyists who are running amok all over the Capitol building, from the Chamber of Commerce to the American Bankers Association, to the Business Roundtable, all of these groups who make huge campaign contributions, spend all kinds of money on lobbyists, they're here loud and clear. They don't want to pay for this bailout, they want middle America to pay for it.

The bailout package is far better than the absurd proposal originally presented to us by the Bush administration, but is still short of where we should be. We can do better.

Comments

[Bluesman48]

Thank you, Senator, we wish you were president!

[Hegemoneyhoney]

I watched the Senate debates this afternoon on C-SPAN and singled out a few of the Senators' remarks as particularly meaningful and thoughtful. Bernie Sanders was one of those senators. I have long been a "fan" of his work and his perspective but never more than today as he spoke the truth. Thank you, Senator Sanders, for your efforts. It is shameful what happened. It is now up to the House. Voting NO on this shameful bill is extremely important. Congress needs reasoned deliberation, hearings with many and varied experts, and judgment, wisdom and common sense, by God! We are furious "out here". There ARE alternative proposals being offered but Congress is IGNORING them! Why? This is a contrived, manipulated, highly suspect "emergency" and American taxpayers are being ROBBED!! I am very disappointed at Obama's stance on this and on his comments being only a replay of his campaign rhetoric. I am outraged at the "lard" that got added to this bill making it even MORE costly. They must think: what the heck - 700 billion? What's a few billion more. The suckers won't notice and they can't do anything about it anyway! Good effort, Senator Sanders; thanks for trying.

[darthdarcy]

Bernie; That's why they call it, "Class Warfare..!"

[begging4change]

Thank you, Sen. Sanders!

I am just another person with another story of a bumpy, twisting, turning rollercoaster ride of 8 years.
I tried to keep my 'complaining' at a minimum , but to be honest I feel robbed. ( I am in my twenties struggling to educate myself, my family members losing jobs and medical insurance, having to accept any job because it 'pays', trying to redirect life...I am sick of 'rolling with the punches' out of survival)

And now, I actually will be 'robbed'??

I dont think so.

In 2000 I was 19 . That election was my first time voting ( I voted Gore)
when Bush won I was HORRIFIED
when Bush won in 2004 I was MORTIFIED

now, I am just plain angry.

thank you for standing up for the people.

[researcher]

bernie you are the greatest

if you ran this country this country would be so much better

universal health care

no wars for profits

detune the industrial military complex

better education for all

instead we have a greedy noncompassionate country that worships at the altar of profits over people

thank you for everything

[AlieNation]

As much as I am an Obama supporter and loathsome of a McCain/Palin presidency, I have had it up to HERE with Obama's shtick of accomplishing what is practical, of doing as much as we can do now, of accepting a flawed proposal because if we don't the consequences could be dire, of treating every political decision as an exercise in pragmatism.

Mr. Obama, do you have a moral center? Is there no right or wrong? Is everything about moral equivalencies?

The Congress and the Executive are once again selling out the working people of America to the already wealthy.

Mr. Obama, I have sent you hundreds of dollars and recruited numerous new voters for you, but right now I would ask you to give those all back.

This bailout plan is a pig (with lipstick) in a poke!

[DixieMelody]

I too thought we had a hero, a champion of us little guys, in Sen. Obama.

I am just heartsick at what I feel is his betrayal of us.

[researcher]

he wants to win

he knows what it takes to win

until we change the system this will continue to occur

we need more than two parties to vote for

time for a change

now lets get busy and make those wooden arrows for the kids

and build that new racetrack

:-)

wake up america wall street and wash are in bed together

the ceo's will give themselves huge salaries now and they will have plenty of money to do it

our money ok printed money

no money for universal health care but for wall street money in a week

it is called capitalism and it is working just as it is supposed to

ie profits over people

[Yankeegirl1958]

Thank you Senator Sanders. I saw your speech on the Senate floor. It was great and I was hoping that you would touch the other Senator's hearts to do the right thing for the American people. I wish you the best.

[blueshield]

Senator, thank you for continuing to raise your voice and common sense to oppose this slick trick. I've signed your letter to Secty Paulson.

Would you please consider collecting like minded opponents, from both sides of the aisle and both houses, AND NAILING A COPY OF THIS POST AND LETTER TO THE DOOR OF THE CAPITAL?

With apologies to Martin Luther, this may be a bit of grandstanding. But someone must stand up to the demigods in the White House and their apologists in the Congress, on behalf of the millions of Americans whose voices are being drowned out in the stampede to distribute the cash.

You state clearly and distinctly what is MISSING from this legislation - facts which Americans suspect, but cannot finger. Please don't let this slip past without a fight.

[vnique]

The failure of congress to listen to the will of the people will result in a backlash they will remember for years to come. How out of touch and arrogant they have become. I for one will use my vote to throw the bums out. This time I think the American people will not vote along party lines just because .... but will vote according to the needs of our middle class. I will be changing my party affiliation tomorrow to independent..... my loyalty must now be earned by deeds and not words!

[Neaguy]

But this is just what Barack Obama voted to do!

[californiadreamer]

i know politics are the art of the possible and i can understand how Obama would try to maximize his vote count. He said that we need to put out the fire before we deal with who started the fire. Perhaps that is correct. the bailout may wipe out the economy which would be ironic but if obama and other democrats get into office I hope we can hold their feet to the fire. it should not be too difficult for a strong majority to pass legislation that could go after the ill-gotten gains of the predatory lenders. I know Mozillo of Countrywide is already under investigation. A fat fine and a long prison term would get people's attention. Let's get a new administration to look after the people's interest. Laws could be passed that would madate loan re-negotiation to reduce default and foreclosure. Let's put in Sen. Saunders tax increase on the super-wealthy to fund repair of intrastucture, green jobs, and reduce unemployment. Remember that many americans now use the internet to gain information from blogs like this. once our representatives learn that $180,000 in campaign contributions cannot equal 180,000 votes of angry informed citizens, than the "rulers" will once again be the public servants they were elected to be.

[Indubio]

As long as the Democratic party is enmeshed in the fantasy that Democrats can work with contemporary Republicans in a bipartisan manor; as long as Democratic leadership is convinced of Milton Friedman's free market fantasies and that the best way to solve our economic difficulties is through use of free market theory, little of what the good senator outlines will ever be approved by Congress. The problem the left faces in this country isn't just with the Republican Party: Far too many liberals align themselves with the Democratic Party without fully understanding what the contemporary party stands for. What Bernie Sanders calls for is a return to Keynesian economics and New Deal social policies but unfortunately for those of us on the left who feel this is the starting point for a return to decent society, the Democratic Party is far from returning to concepts it abandoned after 1980. Many people at HuffingtonPost revere Bill Clinton. Granted, he accomplished many positive things but something he did that isn't so positive is kill what remained of the New Deal wing of the party. Progressive will need to rebuild the left almost from scratch with the expectations that party leadership will do everything possible to prevent it. I vote Democratic but only because there is no practical alternative.

[threelittlebirds]

BERNIE - 2012 !

[LemonMeringue]

The House had better stop this heist. The people do not want this.

[VikingQuest]

You asked for the Dem majorit in the Senate and House, now deal with it :)

[VikingQuest]

Sounds great, working people always are punished for those that screw up both rich and poor.

Fannie CEO welcoming Obama to the Fannie May Family:
http://www.youtube.com/watch?v=usvG-s_Ssb0