Yep, it’s the 3rd birthday of that bipartisan bailout beast: TARP.
Some of us opposed it from day one while Chicken Littles in both parties lost their heads. Some of us knew Henry Paulson and the Government Sachs were not to be trusted. Some of us knew long before it was enacted that TARP = Taxpayers’ Accounts Recycled to Politicians. The vote ushered in an era of endless bailouts and new entitlements. Some of us knew long before it was enacted that there would be an inevitable lard-up and slush fund morphing.
The original Tea Party movement — the one that was around before it was coopted by TARP cheerleaders like Orrin Hatch — never forgot that both Democrats AND Republicans sabotaged free market principles, redistributed wealth, and enforced policies that made the banks that were “too big to fail” even bigger.
The anarchical “Occupy Wall Street” movement claims to oppose big business/big government bailouts, but is far more united against capitalism in general than in holding accountable the politicians in both parties who continue to prop up failing business and subsidize what Jim DeMint rightly calls venture socialism on the public dime.
To mark the TARP annniverary, I’m reprinting my live blog of the vote three years ago.
Here we are again. I hope you’ve been dialing your congressional reps. The gun is at our heads. This is it. The vote is expected at 12:30pm Eastern. (Update: First, the email system crashes. Now, you can’t get through the House phone system: “All circuits are busy.”)
10:45am Eastern. First up on the floor: Race card-hustling corruptocrat Charlie Rangel, who embodies so much of why we are where we are today.
He just said “We have a gun to our head.”
No, we have a gun to our head — and you are going to pull it.
10:50am Eastern. House GOP whip Roy Blunt is heralding all the add-ons and bribes and sugar on top of Crap Sandwich 2.0.
You will eat it and you will not complain!
Blunt’s championing the “transparency” in the bill.
How about being transparent and telling us who requested each of the earmarks piled onto this behemoth?
Let’s have it.
10:56am Eastern. Oh, no. It’s crazy Pete Stark. But he’s saying some sane things. “Is there a crisis? There is, but not for the average American who has been working, paying his bills. No crisis for responsible community banks. There’s a rush to judgment.” Slips in some anti-war ranting. But otherwise, spot out.
11:00am Eastern. GOP Rep. Howard Coble will swallow CS2.0. So will Democrat Rep. Richard Neal and GOP Rep. Dave Camp. And Democrat Rep. John Tanner. Tanner complains about how the Senate handled the package. But he’s going to vote for it, anyway.
GOP Rep. Devin Nunes is my new hero. He says the American people do not accept the threat that there are only two choices: Pass the bill or face a depression. There are other alternatives.
Nunes assails the House for reacting to panic. Why do we need to give $700 billion to one man? If Paulson wants to run a hedge fund, go back to Wall Street? I urge a no vote.
YES! I’m going to try and get his prepared remarks.
A group of Republican lawmakers re-iterated their opposition to the Paulson bailout plan in a letter to Congressional leaders today.
“We hope that you will join us on behalf of the American taxpayer in sending the Treasury Secretary a strong message that his unfair $700 billion bailout plan is a non-starter with the American people,” said the lawmakers.
In place of the $700 billion Wall Street bailout, the lawmakers are seeking reforms that protect the American taxpayer while shoring up our nation’s financial institutions. A core part of the alternative plan would enable the Federal Reserve to spend up to $250 billion using a preferred equity with warrants arrangement. Many provisions of the current package would also be retained, including an increase in FDIC insurance.
11:13am Eastern. Ugh. GOP Rep. Zach Wamp is in full Chicken Little. Announces he’s a flip-flopper, but iit’s an act of patriotism. More cost of doing nothing is worse than doing something rhetoric. “Things are really bad! We don’t have a choice!”
Henny Penny Democrat John Lewis: “We must do something! We must do something!”
Democrat Ron King for the bill: “They’re holding a gun to our head.” But he’s going to help pull it. Praises the transparency.
I repeat: Let’s have transparent naming of who stuffed each and every earmark in the bill.
11:21am Eastern. Democrat Rep. Brad Sherman is on the floor. I can’t possibly describe the problems with this bill in one minute. They’ve added special tax breaks for those who import arrows and rum. This is the pork-laden, earmark-laden Wall Street bill. Will buy toxic assets here and Riyadh and Beijing. It is a bill that provides for an oversight board that critiques but cannot stop anything.
Vote no now and stay here and write a better bill.
RIGHT ON. Let’s see more House Republicans saying this.
Sigh: GOP Rep. Jim McCrery defends tying the bailout to the tax extenders.
Goosey Loosey Democrat Rep. Joe Crowley: “We don’t have time” to deliberate!
11:25am Eastern. Barney Frank is on the floor. He’s going to colloquy with fence-sitters. He’s pushing the foreclosure prevention measures and mortgage meddling provisions.
This is very important, people. As I mentioned in my dissection of the Senate CS2.0:
Section 110 is the Democrat-backed “Assistance to homeowners” plan — driven by one of the bill’s key stated goals of “preserving homeownership.”
GENERAL.—To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets ecured by residential real estate, including multifamily housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage the servicers of the underlying mortgages, and considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.
(2) MODIFICATIONS.—In the case of a residential mortgage loan, modifications made under paragraph (1) may include—
(A) reduction in interest rates;
(B) reduction of loan principal; and
(C) other similar modifications.
Yes, in the quest to “preserve homeownership” at all costs, it appears the government will be determining the value of homes directly in the marketplace — not only reducing interest rates but also loan principal.
Reader Robert calls attention to another micro-meddling section:
SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is amended—
(1) in subsection (e)—
(A) in paragraph (1)(B), by inserting before ‘‘a ratio’’ the following: ‘‘, or thereafter is likely to have, due to the terms of the mortgage being reset,’’;
(B) in paragraph (2)(B), by inserting before the period at the end ‘‘(or such higher percentage as the Board determines, in the discretion of the Board)’’;
(C) in paragraph (4)(A)—
(i) in the first sentence, by inserting after ‘‘insured loan’’ the following: ‘‘and
any payments made under this paragraph,’’; and
(ii) by adding at the end the following: ‘‘Such actions may include making payments, which shall be accepted as payment in full of all indebtedness under the eligible mortgage, to any holder of an ex6
isting subordinate mortgage, in lieu of any future appreciation payments authorized under subparagraph (B).’’
Robert asks: “Is this about renegotiating mortgage rates of existing mortgages? Did I just get screwed for paying a point to lock in 5% fixed rate when my %^&*# neighbor went with no points adjustable rate? How the hell is this fair? I want his new rate and MY POINT BACK!”
11:30am Eastern. GOP Rep. Gresham Barrett plays Cockey Lockey. “We have to act! We have to act now!” He will swallow CS2.0. He’s a flipper.
So will GOP Rep. Tom Cole.
11:33am Eastern. Democrat Rep. Zoe Lofgren is reading Arnold Schwarnegger’s $7 billion loan demand letter.
The sky is falling! The sky is falling!
Lofgren says that California will fall apart unless the bailout passes.
Prediction: If CS2.0 passes, California will still come begging for a bailout.
GOP Rep. Jeb Hensarling opposes the bill. House conservatives have worked hard on alternatives. There are improvements, but I still have many fears. No one knows if this will work. No one knows the true amount of liability. I fear this is more of a bailout than a workout. It rewards bad behavior and punishes the good. How can we have capitalism on the way up and socialism on the way down? If we lose the ability to fail, we will lose the ability to succeed. How can government bail out some and not others? Slippery slope to socialism. I will vote again no. There is a better way.
Here’s his full statement:
“I come to the floor with an odd combination of resignation, relief, doubt, hope, and fear. I was surprised when the House version failed on Monday – and I will be even more surprised if the Senate version fails today. Thus, I am resigned. But with that resignation also comes some measure of relief that at least some plan to deal with the national crisis at hand.
“As I and other House conservatives have said from the beginning – inaction is not an option. The crisis on Wall Street is inflicting Main Street, even as we speak. There is panic in our credit markets, which are freezing up. They need calm and they need capital. As much as it pains our principles, most House conservatives conclude that some temporary form of the full faith and credit of the United States is necessary to address the crisis. We understand without action, many of our fellow citizens may find themselves laid off from their jobs, unable to refinance their homes, or perhaps find their credit card limits curtailed as they attempt to buy food or medicine.
“House conservatives worked tirelessly to put forth a number of different plans, ideas and legislation to remedy the crisis. On their behalf, I take great pride in the role that we played and the role our Republican House Leadership played in improving the legislation before us. Thanks to our efforts, there is greater accountability in this legislation. The insurance workout model of Mr. Eric Cantor and Mr. Paul Ryan now has an opportunity to work. Executives of troubled firms seeking money from taxpayers will have their compensation limited. There is greater opportunity for taxpayer upside, mark-to-market rules are now in revision, and FDIC limits have been increased. These are all Republican improvements that we sought to achieve. Not only do I want to thank House conservatives, I want to acknowledge and thank many of my Democrat colleagues with whom we found common ground on a number of these issues and with whom we were able to work in concert.
“Let me now speak to my hopes and fears. No one truly knows if this plan will work. We all hope it does. No one knows the true amount of taxpayer exposure. Treasury could spend $700 billion in no time flat and come right back to Congress for $700 billion more. Some believe the taxpayer will actually make money in the deal and I hope that proves true. But history as my guide, I have strong fears it will not. And at what point do we finally bailout the American taxpayer from the unconscionable burden he or she faces from out of control Washington spending?
“I fear that the legislation before us still remains more of a bailout than a work out. I fear it undermines the ethic of personal responsibility. I fear that it rewards bad behavior and punishes good. But my greatest fear is that it changes the role of the federal government in our free market economy, which despite its current problems, remains the envy of the world. How can we have capitalism on the way up and socialism on the way down? If we lose our ability to fail will we not in turn lose our ability to succeed? If Congress bails out some firms and sectors, how can it say no to others?
“We must be very careful as we address this financial crisis to ensure that any short-term gain does not come at the cost of even greater long-term pain – that being the slippery slope to socialism. The thought of my children growing up in America with less freedom and less opportunity is a long-term pain I cannot bear. Therefore, I will again vote ‘no’ on this legislation. And as I told my colleagues before the last vote, when I cast my ‘no’ vote, I will cast it with some doubt.
“Some conservatives will support this legislation because they feel it is the last opportunity to address the crisis. They may be right. Some conservatives will support this legislation because they view it as the lesser of two evils. They may be right. Principled conservatives may conclude differently than me, and I respect each and every one of them. We have all struggled to do our duty and cast the vote we believe to be right. If by chance this legislation fails, House conservatives stand ready to immediately offer alternatives and negotiate a workable, bipartisan solution. If it passes, we stand ready to help make it work and pray that our hopes are realized and our fears are not.
“Our fight for freedom and opportunity continues.”
Frank snarks that Bush will lead us down the road to socialism.
Well, yeah, he has. It’s no laughing matter, Barney.
11:39am Eastern. GOP Rep. Judy Biggert is on the floor. She voted no on Monday. She says there are still many changes she would like to see. “It’s not the best package…but it can move through in time…the clock is ticking…the time for seeking better options has run out.” She officially announces her flip-flop.
Flip-flop count is now at two: Zach Wamp and Judy Biggert.
Democrat David Scott supports giving Paulson “efficient tools” to purchase toxic assets and prevent foreclosures at all costs. Supports the bill.
Frank adds that he is “working with Paulson” on additional mortgage-meddling authority. These are ongoing negotiations.
We are so screwed.
11:46am Eastern. GOP Rep. Scott Garrett staunchly opposes the bill. So much has been added to get the votes, he notes, it will pass. Garrett warns of ignoring underlying problems. Assails propping up failing enterprises. The social costs are far, far greater than the $700 billion they talk about today.
THANK YOU, Rep. Garrett!
More Chicken Little rhetoric from Democrat Rep. John Dingell, whose automaker constituents are swimming in their $25 billion bailout: “Inaction is not an option!” Dingell again asks Frank, as he did on Monday, if the bill covers auto loans. Yes, it still does. Oh, crikey. Dingell is asking if the Federal Reserve would bailout automakers even more. Frank says yes.
11:51am Eastern. Democrat Rep. Gary Miller: “We can’t do nothing.” He needs to talk to his fellow Calif. Democrat Brad Sherman.
A reader e-mails that the flip-flop count is 3 — Coble’s a flipper, too.
11:54am Eastern. GOP Rep. Chris Shays says the majority of his constituents oppose it, but he’ll support it again. Screw the constituents!
11:58am Eastern. Staunch fiscal conservative GOP Rep. Mike Pence is on the floor. “This we should not do. I urge my colleagues to join me in opposing this bill.”
Thank you, Rep. Pence.
12noon. GOP Rep. Paul Ryan is in full Chicken Little mode. Fear! Fear! This bill will shorten a recession. “Doing nothing is the worst thing we could do!”
Where is my airsickness bag?
Rep. Steve LaTourette had been rumored to be a prospective flipper. No, he’s not! He lambastes the larding up of the bill. Re. the rum earmark: “I guess we have the piratve vote now.” Says shame on the collaborators.
Frank snarks that McCain is one of those people.
Yeah, we know.
GOP Rep. Joe Barton rises against CS2.0. Good. He puts things in perspective: Auto loan rate and LIBOR rates are at what they were a year ago. Fundamentally, we have to address the American economy. “This is not the bill to address the problems…Vote no.”
12:11pm Eastern. Dem Rep. Donna Edwards asks Frank if the $700 billion will be used to prevent foreclosures. Absolutely. Frank says Paulson accepts Frank’s demands.
Edwards is a Democrat flipper.
Flip-flop count: 5.
12:17pm Eastern. I don’t think I’ve ever agreed with Democrat Marcy Kaptur, but I have now: Blasts the rush and says: “Vote for a real deal, not a fast deal.”
GOP Rep. Ginny Brown-Waite still against. Good. “The American people hated this bill at $700 billion. They despise it now at $850 billion.”
12:20pm Eastern. Ron Paul is on the floor blasting more debt, more appropriations, more spending, more credit in the market. That is what caused the problem. Ron Paul is right. There I said it.
12:23pm Eastern. Airsickness bag overflowing. Maxine Waters is touting the mortgage-meddling and loan modification: “We’re in charge!” “We own them now!” “We will provide loan guarantees.”
Current official flip-flop count update (thanks to Andy Roth and Wesley Denton for added names):
Shelley Berkley (NV-01)
Emanuel Cleaver (MO-05)
John Lewis (GA-05)
Hilda Solis (CA-32)
Donna Edwards (MD-04)
Jesse Jackson Jr. (IL-02)
Bill Pascrell (NJ-08)
Gresham Barrett (SC-03)
Howard Coble (NC-06)
Jim Gerlach (PA-06)
Tim Murphy (PA-18)
Jim Ramstad (MN-03)
Ileana Ros-Lehtinen (FL-18)
John Shadegg (AZ-03)
Lee Terry (NE-02)
Patrick Tiberi (OH-12)
Zach Wamp (TN-03)
Judy Biggert (IL-13)
That’s 223 YEA votes.
GOP Rep. Spencer Bachus [supports] the bill. I do believe I heard him say he’s voting for it because he doesn’t want to risk a decline towards socialism.
Democrat. Rep. James Clyburn supports. GOP Rep. Chip Pickering comes to the floor. This is his last vote. I came when communism in the Soviet Union collapsed.
He’s going to vote for the free-market system…by voting FOR this monstrosity.
Dem Majority Leader Steny Hoyer is droning on, citing anecdotal credit crunch stories, drone, drone, drone. He’s citing the Australian PM to justify voting for CS2.0. Blah blah blah. He gets an ovation. Which is surprising to me. I thought he must have lulled everyone to sleep.
12:51pm Eastern. Well, look who’s up. It’s the original Crap Sandwich Swallower himself, John Boehner.
He says he prays to God so he will feel better about his vote. “In God We Trust.” “Because we’re gonna need his help.”
If he just did the right thing, he wouldn’t have to pray to make his soul feel better.
12:57pm Eastern. Nancy Pelosi. Ugh. Now, she’s Arnold Schwarzenegger’s best friend. She cites other governors crying “Catastrophe.”
Great. After this bailout passes, as I observed earlier this morning, they’ll all be lining up for more.
Let’s she if she starts snarling like she did on Monday.
1:00pm Eastern. She’s all about the bipartisanship now. Praising Spencer Bachus.
“The party is over.”
No. For every bailout beggar, the party has only just begun.
She exults over the mental health parity add-on.
Speaking of add-ons: GREEN ALERT: MSM Ignores Hidden Carbon Tax Provisions in Paulson’s Bailout 2.0
Pelosi is railing against regulators as the cause of the problem.
The Big Lie: “We hope it will pay for itself, but if it doesn’t, the fees will be there to cover it.”
Heaping load of you-know-what.
She gets an ovation.
1:07pm Eastern. All time for debate has expired.
1:22pm Eastern. There’s an outburst of applause on the floor as the YEA count reaches 222, 223…
1:27pm Eastern. Oh, gross. They swallowed the Crap Sandwich and they’re applauding themselves.
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