On Monday, September 29th, the House of Representatives voted against H.R. 1424, the Emergency Economic Stabilization Act of 2008. This original form of the bill numbered 110 pages and dealt predominantly with how the federal government would purchase "troubled assets", protect homeowners who are facing foreclosure, distribute monies, provide oversight of those companies receiving money, and other related issues. Many Representatives, when asked why they voted against this bill stated that either their constituents were against it, they felt it did not provide enough oversight, or that it is not the role of government to "save" private companies and citizens from the consequences of their bad choices.
On Wednesday, October 1st, the Senate passed an amended H.R. 1424 numbering 451 pages which has now been passed on the the House for a vote, expected to take place Friday, October 3rd. What is included in those additional 441 that led the Senate to pass it?
After skimming through both versions of the bill (there was no way I could read through all 561 pages this afternoon and keep 6 children fed, clean, and educated, so I had to skim the majority of them and then focus on reading the additions made), I have found that the question of oversight has been addressed and tweaked, but that hardly accounts for all 441 new pages. So, what does comprise the majority of those additions?
All day, I have been hearing the media (mostly NPR as we don't have television reception nor do we have a great variety of good radio reception) use the term "sweeteners" in reference to the additions to the bill which made it "passable." Even Frodo, who attempts to avoid all things political when possible, couldn't help but notice the new term the media has been using to describe what in the past has been referred to as "pork." I understand why the politicians want to avoid the word "pork." It's an election year. Thirty-five of the 100 Senate seats are being contested this year, and all 435 Representatives are up for re-election. These politicians know that during elections years, you have to be against "pork barrel spending," so apparently they've decided, with the media as an accomplice, that items added to a bill to guarantee enough votes to pass it are now called "sweeteners." Maybe they thought the term would invoke images of birthday cakes and Christmas candy, but all I am picturing is a guy in a cheap, ill-fitting polyester suit standing in front of used car of questionable background annoyingly chewing gum and winking while saying, "How's about I sweeten the deal for ya, doll?"
But whether you call these additions "pork" or "sweeteners," what they really amount to are bribes. They are targeted spending measures intended to buy the votes of congressmen by making them look good to their constituents. Do they not see the irony of an emergency economic stabilization act containing spending the government can't afford? As of October 1st, the federal debt totaled:
Wall Street is in trouble because they gambled on inflated house prices and used mortgages as collateral for their other financial dealings. When the housing market turned, these banks owed more money than the value of the mortgages they put up against their loans. Main street is in trouble because individuals gambled on the inflated economy providing them with ever-increasing incomes and ever-increasing home values by using adjustable-rate mortgages to buy houses they couldn't afford and left them houses valued far less than the amount of money they owed. So what is the government's answer? They are going to gamble that the "troubled assets" they buy today will be worth more in the unnamed future. In short, they are going to attempt to fix the financial crisis by engaging in the exact same practices that led to it in the first place.
So, what kind of promises does it take to get a congressman to vote for a strategy that it can't afford and has already been proven to fail? Here are some of the bill's "sweeteners" (these are all section or title headings that you can search for yourself in the bill):
-Renewable Energy Credit
-Transportation Fringe Benefit To Bicycle Commuters
- Seven-Year Cost Recovery Period For Motorsports Racing Track Facility
-Extension and Duty Modification Of Duty Suspension On Wool Products; Wool Research Fund; Wool Duty Refunds
-Permanent Authority For Undercover Operations
-Exemption From Excise Tax For Certain Wooden Arrows Designed For Use By Children (you can't make these up, people)
-Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (yup, there is an entire act tacked on as an amendment; actually there are three)
The members of the House stood up once and said no to government intervention in the financial markets. (It was government intervention that led to this problem in the first place, including the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; Federal Housing Enterprises Financial Safety and Soundness Act of 1992; and administration-based changes to the Community Reinvestment Act, first enacted by President Carter in 1977, and effecting changes in Title 12 of the Code of Federal Regulations both by President Clinton, in 1995, and President GW Bush, in 2003.) Let's encourage our representatives to stand up again to government interference. And let's make sure that, as we do so, we are willing to suffer the potential financial sacrifices that may be necessary to weather this adjustment in our financial markets as we move toward a more realistic, asset-based economy.