Bailout Update: Senate Passes Bailout, House Still Unclear

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"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."

Senator Sanders full speech is available at:   http://www.sanders.senate.gov/news/record.cfm?id=303980.

Now action moves to the House of Representatives where the leadership is trying to figure our how to deal with the Senate bill.  Progressives who oppose the bailout are also determining their response.  There are two issues being urged by progressives: bankruptcy reform and economic stimulus. 

Bankruptcy reform is the least costly and most sensible step that could be taken by the Congress.  It will cost the taxpayer nothing and will prevent a massive redistribution of wealth from working class Americans to the wealthiest bank owners.  The goal is to allow a judge to renegotiate the mortgage of the homeowner so they can afford it and keep their home.  This has not been voted on in either the House or Senate because the leadership has kept it out of the bills.  It is being kept out because the banks oppose it.  They would prefer to take the homes from homeowners rather than take their payments on a slower basis. If the bankruptcy provision were included it would ameliorate the subprime mortgage problem and demonstrate that homeowners are not to blame and the real problems in the finance industry are much bigger. 

Some are trying to include the economic stimulus package being considered by the House as part of the bailout.  This effort, being led by Rep. Jim McDermott, is facing an uphill battle.  Majority Leader Hoyer says it is unlikely to be included blaming Republican opposition.  Once again, the Democratic leadership is not leading but using Republican opposition to stifle sensible economic policy. It is likely the bailout will move to the House Floor without any amendments being allowed.  The vote is expected tomorrow. 
Today people should be making calls to Congress urging them to slow down and consider this massive expenditure carefully.  Points to make: 

-          Do not let make the tax payers pay to clean up Wall Street’s mess.

-          Make sure that CEO’s do not benefit from the bailout.

-          Include a bankruptcy provision to protect homeowners.

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