On Monday the House voted down the the Bush Administration's request that Congress authorize $700 billion for purchasing Wall Street's "toxic assets" linked to the collapse of the housing bubble, after being deluged by phone calls and emails in opposition. The Senate approved basically the same proposal Wednesday, and the House may vote again Friday, although at this writing the outcome is still very much in doubt.
Largely missing from debate has been the impact of this plan on U.S. government spending on human needs in the next Administration. And there has been almost no mention of the impact on our global commitments to help reduce illiteracy and address easily preventable disease.
Last week, world leaders met at the United Nations. UN Secretary General Ban is asking for the world's wealthy countries to contribute $72 billion per year to help the world meet the modest UN goal of reducing extreme poverty. According to the advocacy group Health Gap, the US share of this would be about 1/3, or $24 billion, based on the US share of the donor countries' wealth. Over the four years of the next Administration, that would be about $100 billion. As Inter Press Service reported, delegates to the UN meeting expressed concern that donor country commitments to reducing global poverty would now be even weaker than before.
If the Bush Administration's Wall Street bailout is enacted, we will be told that there is no money for additional spending on human needs, nationally and globally, in the next Administration - regardless of whether this is true. Already, in the first Presidential debate, moderator Jim Lehrer pressed the candidates to say what priorities they were going to give up, in light of the expected Wall Street bailout.
There are alternatives to the Bush Administration's plan that would cost the US taxpayers less, have greater chance of addressing problems in the credit market, and not politically threaten the next Administration's ability to increase spending on human needs. Congress should consider these alternatives before approving the Bush Administration's plan.
Representative Peter DeFazio has introduced a plan which would strengthen regulations to bolster the banking sector, the Nation reports. The plan is based on a proposal made by William Isaac, head of the Federal Deposit Insurance Corporation under the Reagan Administration. Isaac notes that in the 1980s Congress enacted a program which shored up the capital of banks to give them more time to resolve their problems, and the FDIC resolved a $100 billion insolvency in savings banks for a total cost of less than $2 billion.
We should ask Congress to consider the cost to the world, as well as to the United States, of enacting the Bush Administration's plan, and to consider alternatives.