Moderators: Alyrium Denryle, Edi, K. A. Pital
I don't think it is possible to be anything but a cynic about the financial system, unless you are involved high up with lots of money involved.Pelranius wrote:Or Obama and McCain might just be pulling every bit of leverage on their colleagues, for the reason that they want to appear to be at least doing something. Just my inner cynic speaking out again.
Christ look at that useless pork. Tax breaks for Nascar. Are you fucking serious?Oct. 1 (Bloomberg) -- Rose City Archery Inc., an Oregon company that makes arrows used by children, hit a bull's-eye with Senate legislation that would rescue Wall Street banks.
Senators attached a provision repealing a 39-cent excise tax on wooden arrows designed for children to an historic $700 billion financial-markets rescue that passed tonight by a vote of 74-25. The provision, originally proposed by Oregon senators Ron Wyden and Gordon Smith, will save manufacturers such as Rose City Archery in Myrtle Point, Oregon, about $200,000 a year.
It's one of dozens of tax breaks benefiting Hollywood producers, stock-car racetrack owners and Virgin Islands rum- makers included in the broader legislation in an effort to win support from House Republicans, whose defection contributed to a rejection of an earlier version of the legislation two days ago on a 228-205 vote.
``This is how Washington works,'' said Keith Ashdown, chief investigator at Taxpayers for Common Sense, a Washington research group. ``A big pot of pork is their recipe for final passage.''
Representatives for Wyden, a Democrat, and Smith, a Republican, didn't immediately return calls. Jerry Dishion, president of Rose City Archery, was in meetings and unavailable to comment, a receptionist at the company said.
Most of the provisions are part of a package of provisions known as ``extenders'' because they are renewed for only a few years at a time.
Research Tax Credit
Popular with lawmakers, the provisions include a research tax credit worth about $8.3 billion a year for companies such as Microsoft Corp. and Harley-Davidson Inc., and subsidies for the overseas financial services earnings of U.S.-based multinational corporations such as General Electric Co. and Citigroup Inc.
The tax package also would spare 24 million American households from a scheduled increase in the alternative minimum tax amounting to $62 billion this year and renew about $17 billion of incentives to promote energy production from renewable sources such as solar and wind.
Other, smaller provisions, such as one that will save Nascar track builders $109 million this year, have been staples of the tax code since 2004 or earlier. They periodically expire and are renewed, and include hundreds of millions of dollars of tax incentives for companies that invest on Indian reservations, in the District of Columbia, and American Samoa. Other breaks would subsidize renovations of restaurant franchises and cut import duties on wool and wood.
Break for Filmmakers
Several others are new provisions, including two tax breaks worth $478 million over the next decade for movie and television producers who shoot films in the United States. The legislation would allow filmmakers to qualify for a 3 percentage-point reduction from the 35 percent top tax rate approved in 2004 for domestic manufacturers.
The arrows provision seeks to reverse an anomaly in a 2004 law that created the 39 cent excise tax on the weapons. Intended the levy more expensive arrows, the tax also applies to arrows used by Boy Scouts and other youth organizations that cost about 30 cents a piece. Ten manufacturers in nine U.S. states stand to benefit from the change, according to a description of the legislation from Wyden's office.
Michael Steel, a spokesman for House Minority Leader John Boehner, said the inclusion of the tax breaks ``will increase the appeal of the package for our members.''
The Congressional Budget Office said today the tax provisions will add about $112 billion to budget deficits over the next five years because the legislation doesn't contain enough offsetting revenue increases to keep the budget balanced.
The biggest revenue-raising provision in the bill would cost managers of hedge funds about $25 billion over the next decade by prohibiting an accounting technique they currently use to defer for as long as 10 years U.S. taxes on their income earned in foreign countries, usually tax havens such as the Cayman Islands.
The worst part is that the very same House Republicans who demanded this pork will go on to rant and rave about their opposition to "pork-barrel politics" without a trace of irony. Just look at Sarah Palin and the way she turned the Bridge to Nowhere into a talking point by simply lying about it.Ender wrote:Christ look at that useless pork. Tax breaks for Nascar. Are you fucking serious?
House Republicans? How about McSame himself? His entire economic platform is "I'll RARGH CRUSH KILL DESTROY earmarks," and then he went ahead and voted for this bill. It's not like the vote was close. He could have said, "I support the bailout on its own merits, but I can't in good conscience vote for all this pork." Of course, that would be politically principled, brave, and even macverickey; in other words, it could blow up in his face. I'd like to see Obama take him to task over this, but I could understand if he doesn't; John Kerry is a living example of what happens when you try to campaign on the fine details of a Senate vote.Darth Wong wrote:The worst part is that the very same House Republicans who demanded this pork will go on to rant and rave about their opposition to "pork-barrel politics" without a trace of irony. Just look at Sarah Palin and the way she turned the Bridge to Nowhere into a talking point by simply lying about it.Ender wrote:Christ look at that useless pork. Tax breaks for Nascar. Are you fucking serious?
Yeah, I'm sad that Obama went along with it. But I suppose I shouldn't be too surprised as they could easily have used that against him. "Obama, why do you want America's economy to suck"?Admiral Valdemar wrote:I'm still pissed Obama went and voted for this bullshit. He should know better. I expected McCain to flounder, but Obama? Man, won't he take the lead rather than follow the peanut gallery's stupid plan to accelerate America's decline?
So the solution is throwing more money into a black hole, tax breaks, and encouraging balance sheet fraud for financial companies. If this bill passes, every hedge fund manager & banker with a functional brain is going to get their own licensed printing press. These people will add to their net worth several (or many) times over within weeks while the average Joe gets fleeced, again.Financial-Rescue Bill Gains Support in U.S. House (Update4)
By Laura Litvan and Brian Faler
Oct. 2 (Bloomberg) -- U.S. lawmakers who helped defeat a financial-market rescue package this week are reconsidering their votes amid signs the crisis on Wall Street is spreading.
At least eight lawmakers, including Republican Zach Wamp of Tennessee and Democrat Emanuel Cleaver of Missouri, now say they would support the measure. Four others say they may switch their ballots before the House votes again, at about 12:30 p.m. tomorrow, on the measure, which failed by a dozen votes Sept. 29.
The legislation allows the government to buy troubled assets from financial institutions rocked by record home foreclosures. It contains provisions favored by House Republicans, including $149 billion in tax breaks, a higher limit on federal bank- deposit insurance and securities law changes.
It also reiterates securities regulators' authority to suspend asset-valuing rules that corporate executives blame for fueling the crisis. The Senate last night approved the $700 billion bill, 74-25.
``I feel very comfortable about where we stand,'' House Majority Whip James Clyburn, the Democrats' top vote-counter, told reporters. ``Of course, I felt very comfortable on Monday.''
Swaying Gerlach
The add-ons helped sway lawmakers such as Jim Gerlach, as did phone calls from his suburban Philadelphia constituents. Many of his supporters shifted from opposing the bailout to supporting it following the record 778-point drop in the Dow Jones Industrial Average after the House's 228-205 defeat of the bill Sept. 29.
U.S. stocks fell today. The Standard & Poor's 500 Index slid 46.78, or 4 percent, to 1,114.28. The Dow Jones Industrial Average lost 348.22, or 3.2 percent, closing at 10,482.72.
Lawmakers switching their votes to yes from no also include Democrats Shelley Berkley of Nevada and Gabrielle Giffords of Arizona and Republicans Ileana Ros-Lehtinen of Florida, John Shadegg of Arizona and Jim Ramstad of Minnesota. At least three other Republicans, Gerlach and Tim Murphy of Pennsylvania and Patrick Tiberi of Ohio, and Democrat Bill Pascrell of New Jersey, may vote yes on the measure.
At a meeting of Democrats tonight, Representative John Lewis of Georgia, who serves under Clyburn as a party whip, announced to the caucus that we would switch his vote from no to yes and gave a speech urging others to do the same to help boost the flagging economy, a Democratic aide who spoke on condition of anonymity said.
Hoyer, Blunt
House Majority Leader Steny Hoyer spoke by phone tonight with Republican Whip Roy Blunt to see if there were enough votes to pass the measure. Both agreed to go ahead with the vote, according to Stacey Bernards, a spokeswoman for Hoyer. Clyburn, Blunt's Democratic counterpart, said Democrats have more votes for the bill than the 140 they garnered on Sept. 29.
``There is a broad feeling that the economy is at risk and that average Americans will be badly hurt if the economy continues to go downhill, and that action is necessary,'' Hoyer said.
Debate will begin at 9 a.m. tomorrow or perhaps earlier, said House Rules Committee Chairwoman Louise Slaughter, a New York Democrat.
Minority Leader John Boehner said the rescue plan won't come up for a vote until leaders are confident it will pass. ``We're getting there, one at a time,'' said Boehner, declining to say whether he had the votes yet.
Republicans also cited the economy as the main reason they were switching their vote.
Credit `Breakdown'
Shadegg, who opposed the measure earlier this week, said on Bloomberg Television that he'll now support it, citing a ``breakdown'' in credit markets that makes it difficult for small businesses to pay employees. Ros-Lehtinen said in a statement that she will back the bailout because it boosts Federal Deposit Insurance Corp. limits and adds tax breaks for families.
Republican leaders suggested the market reaction may spur some in their ranks to change their minds on the bill.
``The big drop'' in the Dow Index ``really had a chilling effect on a lot of our members and a lot of their constituents,'' Boehner said on Fox. With the Senate's changes, the legislation ``has a much better chance'' to pass this time, he said.
Companies are also pushing Congress to pass the measure, saying the curtailment of credit may result in job cuts.
Marriott International Inc., announcing its third-quarter earnings, urged Congress to ``quickly'' approve the package. Marriott said thousands of jobs are at risk because companies can't borrow money.
Automakers said tougher loan standards partly accounted for a 27 percent plunge in U.S. auto sales last month.
Commercial Paper
The market for commercial paper, short-term borrowing by businesses, suffered the biggest one-week drop on record, the Federal Reserve said today. The amount of commercial paper outstanding fell by $94.9 billion, or 5.6 percent, during the week ended Oct. 1.
Yet the addition of the tax cuts and special breaks for companies such as an Oregon-based maker of wooden arrows and Virgin Islands rum-makers may turn off some deficit-wary Democrats, who supported the original rescue package but don't want tax cuts without offsetting spending reductions or tax increases.
Representative Mike Ross, an Arkansas Democrat who supported the original bailout measure, said he didn't know how the so- called Blue Dog coalition of fiscally conservative Democrats would vote on the version with the Senate's add-ons.
``I don't even know what I'll do,'' Ross said.
So far, Democrats who may be put off by the added tax cuts haven't said they're switching positions. In all, 140 Democrats backed the bill along with 65 Republicans.
Blue Dogs
Two dozen of the 44 Blue Dogs voted for the bailout on Sept. 29. Four of them said yesterday they'll continue to back the bill, even though their caucus derided the Senate's tax measures as irresponsible as recently as Sept. 29. Another, Allen Boyd of Florida, said today he was undecided after voting for the measure earlier this week.
The extra spending on federal projects is also repelling some Republicans.
Representative Spencer Bachus, an Alabama Republican who supported the bailout plan on Sept. 29, called the Senate version ``a travesty,'' saying in an interview that he is ``strongly considering'' voting against it.
About a dozen Republicans were seeking to amend the measure to allow the Treasury to spend $250 billion immediately and require a separate vote by Congress before any more of the $700 billion can be used to buy troubled assets. The amendment would have taken out special tax breaks.
`Purchased With Pork'
``Votes should not be purchased with pork,'' Ohio Republican Steven LaTourette told reporters.
The Democratic-controlled Rules Committee said no amendments would be allowed.
The tax provisions are anchored by a $62 billion measure that stops the alternative minimum tax from taking effect for about 24 million American households this year. The levy, designed to target millionaires, now affects households with incomes as low as $50,000 and would cost each household about $2,000 this year if Congress fails to act.
A second clause would renew dozens of expired tax breaks relied on by businesses, including a research tax credit worth billions to thousands of companies such as CA Inc. and Merck & Co. Other provisions include a tax break for companies that finance equipment sales overseas, such as General Electric Co.
The third prong would renew about $17 billion worth of incentives for companies that produce energy from renewable sources such as solar and wind.
Not Budging
Some of the 133 Republicans who opposed the measure aren't budging.
``The bill that they are going to send back is the same bill that I voted against,'' Representative Joe Barton of Texas told Bloomberg Television yesterday.
President George W. Bush, whose administration originated the bailout proposal, made ``very productive'' phone calls to wavering lawmakers this morning, his spokesman said. Spokesman Tony Fratto said Bush talked to some lawmakers who had switched positions and the administration was ``optimistic'' the measure would pass.
Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce, told reporters he met with Bush today, and the president ``pulled out a list his staff had given him'' of lawmakers to call.
``We are in a full-court press,'' Josten said.
To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Brian Faler in Washington at faler@bloomberg.net.
PRFYNAFBTFCP PRFYNAFBTFCP I say we put it to a vote...Kodiak wrote:As a point of order, I'd like to request a title change to the thread, "Bailout NOT Pwned!"
Seriously though, I fear for my nation.
link hereNEW YORK (CNNMoney.com) -- The House on Friday passed a far-reaching and historic plan to bail out the nation's financial system.
The vote for passage of the Senate-amended bill - 263 to 171 - was the result of strong lobbying on the part of the White House and other supporters of the bill all week, following the House defeat of a similar measure on Monday - a defeat that shocked the markets and congressional leaders on both sides of the aisle.
According to preliminary numbers, 172 Democrats voted in favor of the bill while 62 opposed it; and 91 Republicans voted for it and 108 voted against it.
Republicans who said they would switch their votes from "no" to "yes" included Rep. Howard Cobble, R-N.C., and Rep. Sue Myrick, R-N.C. In a statement, Myrick said, "We're on the cusp of a complete catastrophic credit meltdown. There is no liquidity in the market. We are out of time. Either you believe that fact, or you don't. I do."
Democrats who said they would switch their votes include Rep. John Lewis, D-Ga., Rep. Elijah Cummings, D-Md., and Rep. Donna Edwards, D-Md.
Cummings noted this was the most difficult vote for him in his 12 years in Congress. "But today we must step up and lead," he said.
Earlier this week, Cummings and Edwards were part of a group that had been working on an alternate proposal. The lawmakers had lobbied strongly but unsuccessfully to include, among other things, a change to the bankruptcy law that would let judges modify mortgages on primary residences, a move the lending industry has strongly opposed.
Cummings and Edwards said they had received calls from Democratic presidential nominee Barack Obama, encouraging them to change their minds. They said they received assurances that he was committed to the bankruptcy provision.
House Minority Whip Roy Blunt, R-Mo., told reporters before the vote on Friday morning that three things have happened to change some Republican members' opposition to the bill since the House defeated the measure on Monday: more calls to their district offices in support of the bill; a clarification of SEC accounting rules regarding mark-to-market accounting; and the additions the Senate made to the bill, which it passed on Wednesday, including a number of tax break extenders and an increase in FDIC deposit insurance coverage. (What's in the bill.)
Economy in need of a fix
The House debate began on the heels of two market-moving events: a worse-than-expected monthly jobs number; and a surprise merger announcement between Wachovia and Wells Fargo.
The legislation, which would allow the Treasury Secretary to purchase as much as $700 billion in troubled assets in a bid to kick-start lending, would usher in one of the most far-reaching interventions in the economy since the Great Depression.
For the past two weeks, lending between banks and between banks and businesses has gotten considerably more expensive. Small businesses are having trouble getting loans. As of midday Friday, one key measure showed that banks were hoarding cash rather than loaning it. Meanwhile, an indicator showing how willing banks are to lend each other was at an all-time high.
Advocates say the plan is crucial to government efforts to attack a credit crisis that threatens the economy and would free up banks to lend more. Opponents say it rewards bad decisions by Wall Street, puts taxpayers at risk and fails to address the real economic problems facing Americans.
Lawmakers who said on Friday they planned to vote against the bill warned that "being stampeded" into voting the bill through would be a serious mistake.
"Wall Street is so hungry for the $700 billion they can taste it. To get it they need to ... create panic, block alternatives and herd the cattle. We ask Congress not to rush. Defeating this bill today isn't the last step. It's the first step in passing a good bill," said Rep. Brad Sherman, D-Calif.
Rep. Marcy Kaptur, D-Ohio, who has called for the FDIC and SEC to use their powers to ease the credit crisis, said soon before the vote, "Pray for our Republic. She's being placed in ... very greedy hands."
Lawmakers who stood in support of the bill noted that it will help Main Street, not Wall Street. "We [would] rescue the jobs, the savings and the ability to get a loan for each hard-working American," said Rep. Louise Slaughter, D-N.Y.
Rep. Maxine Waters, D-Calif., noted that the bill also supports homeowners at risk of foreclosure by giving the government more say in how loans for troubled borrowers are modified so people can stay in their homes.
"When we buy up this toxic paper, we're in charge. We can do the kind of loan modifications we've been urging [the industry coalition] Hope Now to get done. ... We'll be able to set some standards," Waters said during the floor debate. "For anybody who says there's nothing in this bill for homeowners, they're incorrect."
PRFYNAFBTFCP
Not precisely, from what I understand, the 630b was mostly expanded lending to the European central bank, and other places which rely on alot of dollar movement.Grandmaster Jogurt wrote:Just to make sure I've been following this:
A bill goes into the house to give $700b to the failing companies. It fails, but for some reason $630b ends up being given without congressional approval. Then when the bill comes back the second time, it passes. This means the final total is more than $1.3 trillion (and a bunch of pork).
Did I get that right? And if so, would it have been better to just have passed the first time?
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
``By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk,'' the central bank said.
The Bank of England and the ECB will each double the size of their dollar swap facilities with the Fed to as much as $80 billion and $240 billion, respectively. The Swiss National Bank and the Bank of Japan will also double their dollar swap lines, while the central banks in Australia, Norway, Sweden, Denmark and Canada tripled theirs.
All the banks extended their facilities until the end of April 2009.
The Fed is also increasing the size of its three 84-day TAF sales to $75 billion apiece, from $25 billion. That means the Fed will make a total of $225 billion available in 84-day loans. The central bank will keep the sales of 28-day credit at $75 billion.
Special Sales
In addition, the Fed will hold two special TAF sales in November totaling $150 billion so banks can have funding available for one or two weeks over year-end. The exact timing and terms will be determined later, the Fed said. The TAF program began in December, totaling $40 billion.
The bank-rescue plan being debated by Congress today would give the Fed more power over short-term interest rates by providing authority as of Oct. 1 to pay interest on reserves held at the central bank by financial institutions. That would make it easier for the Fed to pump funds into the banking system.
Paying interest on reserves puts a ``floor'' under the traded overnight rate, which would allow a central bank ``to provide liquidity during times of stress'' without affecting the rate, New York Fed economists said in a paper last month.
Sort of. A bill went into the house to give a bottomless revolving slush fund, limited to $700B outstanding at any one time to the failing financial corporations. This was rejected the first time. Just a couple hours before the vote, the Treasury & Fed dumped $630B into the system anyway, thinking they'd get a double pump that day if the bill passed. The market cratered anyway. The dead bill is shortly resurrected and tacked on as a rider on a Senate bill that's already been passed, they voted it through on Wednesday and sent it back to the House which passed it today.Grandmaster Jogurt wrote:Just to make sure I've been following this:
A bill goes into the house to give $700b to the failing companies. It fails, but for some reason $630b ends up being given without congressional approval. Then when the bill comes back the second time, it passes. This means the final total is more than $1.3 trillion (and a bunch of pork).
Did I get that right? And if so, would it have been better to just have passed the first time?
