Washblog || Nothing is more important right now (full text of financial bailout plan)

Nothing is more important right now (full text of financial bailout plan)

By chadlupkes
Mon Sep 22, 2008 at 07:04:53 AM PST
Section: Diary Topic: Economic Justice

[Front paged: NM. I added parenthetical note to title.]

This is a long description of the Wall Street Steals From Us Again Act. Please read, and pass this on. Nothing is more important right now.

From: Steven A Reisler <sar@blarg.net>
Reply-To: <sar@blarg.net>
Date: Sun, 21 Sep 2008 22:22:00 -0700
To: <Undisclosed-Recipient:;>
Subject: The Treasury's Bail Out Plan - The Full Text of Paulson' s Proposal (You'd Better Sit Down First)

Hey, folks, this is far more important than anything else happening right now and if the Bush administration has its way, they will ram another $&^*((&$&^# piece of "emergency legislation" down your throats (with the Democrats usual meek acquiescence, of course). The last piece of legislation that was passed during an "emergency" at breakneck speed: the oxymoronically named "Patriot Act" right after 9/11.

The press keeps yakking about the 700 billion dollar bail out of Wall Street, but very few are letting you actually read the proposal itself. It's short and... bitter. Even non-lawyers can read it quickly. Read it and weep. Comments follow after the full text. Set your format to HTML - I've bolded certain sections of special concern:

Treasury's Financial-Bailout Proposal to Congress

The following is the legislative proposal from Treasury Department for authority to buy mortgage-related assets:

Section 1. Short Title.

This Act may be cited as ________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.-The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.-The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for-

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.- The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.- The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.- The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.-The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable</u> and committed to agency discretion, and <u>may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000. [That's 11 Trillion 315 Billion dollars]

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.-The term "mortgage-related assets" means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.-The term "Secretary" means the Secretary of the Treasury.

(3) United States.-The term "United States" means the States, territories, and possessions of the United States and the District of Columbia.

****

ANALYSIS

Citizens of the United States: You have about 24 hours to contact your Congress Critters and DEMAND that this piece of legislative CRAP not be enacted in ANY FORM WHATSOEVER. If you are active in any presidential candidates' campaign, you need to contact their spineless representatives and tell them that you demand they oppose this garbage.

The salient points:

This is a blank check to the Treasury Department to bailout Wall Street at ANY PRICE whatsoever. IT IS NOT limited to $700 billion dollars because it reads that the limit is $700 billion "AT ANY ONE TIME". That means, the Treasury can suck up $700 billion time after time after time, so long as it is only doing it $700 billion at a time.
YOU are paying for this. The legislation makes it an automatic right of the Treasury to do this buyout by appropriating your taxpayer money WITHOUT even going through Congress for spending authority (THIS IS UNCONSTITUTIONAL). Note that the federal money to pay for all this (that is YOUR money) is "appropriated" when Treasury spends the money!!! No need for a budget or for a Congressional appropriation! They spend the money and it is automatically charged to the government accounts and YOU get stuck with the bill. You have no right of redress, no one to complain to, no oversight, no input, just the obligation to pay pay pay. In 1776 folks revolted against the British empire for less than this.
The proposal states that nothing that Treasury does to bail out Wall Street will be reviewable in the courts!! What!! They get to do whatever they freaking want to do and there will be absolutely no checks or balances whatsoever, except...
Treasury has to report every three months to a couple of friendly banking committees in Congress (right... the same a-holes who gave us this mess), and the Secretary of the Treasury has to "take into consideration" effects on the taxpayers. Thanks, Hank, I'm sure you will take all of us "into consideration"... for about a split second... as you bail out your buds on the Street.
The Government has told you they didn't have the money for SOCIAL SECURITY or for NATIONAL HEALTH CARE or for EDUCATION or for LIBRARIES or for FORESTS or NATIONAL PARKS or ENVIRONMENTAL PROTECTION or for PROTECTING the QUALITY of our FOOD or for the JUSTICE SYSTEM or HOUSING, SOCIAL SERVICES, or anything worthwhile that serves the common good. NOW you suddenly have trillions of dollars to use to bail out the toads in the financial sector? The only way that works is through a massive devaluation of the currency (that spells hyper-inflation) and through the imposition of crippling taxes and costs of the working and middle classes. And you will pay and pay and pay for decades unknown into the future.

As a lawyer, I can tell you that this is the most amazingly ambiguous, incredibly obnoxious, sweeping and unconstitutional rip off of the public since the beginning of the Republic. It is a blatant power grab. This is a guaranteed ball and chain for future Americans for generations to come and it will certainly drag the standard of living for most Americans down to the lowest imaginable levels.

It's your life. It's your money. It's your future. It's your government. This will be pushed like lightning through Congress. Now, get off your fanny and do something. s

The Honorable Patty Murray
United States Senate
173 Russell Senate Office Building
Washington, D.C. 20510-4701 DC Phone:202-224-2621DC Fax:202-224-0238
Seattle phone: Voice: 206-553-5545
FAX: 206-553-0891
electronic: http://murray.senate.gov/email/index.cfm

The Honorable Maria Cantwell
United States Senate
511 Dirksen Senate Office Building
Washington, D.C. 20510-4704 DC Phone:202-224-3441DC Fax:202-228-0514 Electronic Correspondence:http://cantwell.senate.gov/contact/index.cfm
Seattle phone: Voice: 206-220-6400
FAX: 206-220-6404

The Honorable Jim McDermott
United States House of Representatives
1035 Longworth House Office Building
Washington, D.C. 20515-4707 DC Phone:202-225-3106DC Fax:202-225-6197
Electronic Correspondence:http://www.house.gov/mcdermott/contact.shtml
Voice: 206-553-7170
FAX: 206-553-7175

Psss... DO SOMETHING

----

Chad's note at the bottom: I don't usually think that posting emails on Washblog is the right thing to do. But this was too important. I'll close with what I posted on my own blog after writing to Rep. Jim McDermott.

I believe that what Secretary Paulson, President Bush and Fed Chairman Bernanke are doing amounts to criminal negligence at the low end, and TREASON at the high end. They are stealing money from the American People. I want that to end, and if criminal charges can be brought to bear I want all three of them in prison. I'm sick of this.

Read your history, everyone. Read the history of the stock market crash of 1929. Read about the hyper-inflation in Germany in the 1920's due to their debt from World War I and the collapse of their currency. READ!!!

< Four more years of commissioner Keane? | On Distractions, Or, If You Hide In A Smoke Screen, Make Sure It's Not Toxic >

Nothing is more important right now (full text of financial bailout plan) | 5 comments (5 topical)

Let's recommend this now!

The recommends will get this diary to the top of the page and there it'll stay for awhile.

I don't pretend to be knowledgeble in ecomonics. But isn't it amazing that nothing sends Republicans into crisis mode like the idea of Robber Barons losing a percentage of their billions. The rest of us can continue pulling our own teeth because we can't afford dentist bills.

Here's a quote from a Daily Kos post this morning,
Every Man for Himself, Said the Elephant Among the Chickens:

According to most sane economists like Paul Krugman, financial institutions are in this mess partly because they refuse to acknowledge the relative valuelessness of their mortgage assets. In short, they're asking too much money for what they've got. What the Bush administration proposes to do is to pay them the exorbitant prices they're asking. It's a gift, pure and simple; but Bush era conservatives see nothing morally wrong with it. Major financial institutions run financially amok and make billions. Taxpayers bail them out. No moral hazard of poor example here.
They do see something morally wrong with providing every American with health care. They do see something wrong with providing non-violent addicts with treatment instead of jail. They do see something wrong with providing rape victims with a morning after pill. They do see something wrong with providing addicts with clean needles so they don't spread HIV. They do see the moral wrong in giving teens condoms so they don't contract STDs or die of AIDS. All of these, they insist, would set bad moral examples. All would encourage bad behavior. But providing expensively tailored con artists with get-out-of-debt-and-jail free cards after costing the American taxpayers tens if not hundreds of billions of dollars? No problem.

by dinazina on Mon Sep 22, 2008 at 08:30:57 AM PST

* 1 none 0 *

This IS The Most Important Opportunity

to either force some rational restructuring and over sight -- OR let Congress give a blank check to the very people who got us into this mess.

Make the companies that want the bailout pay for it, fire the executives, constrain executive compensation.
Provide restructuring of mortgages for those who are being foreclosed on, i.e., provide some level of bail out for the little guy. This would end up being a cheaper alternative if the homeowner has any basis to pay a reasonable mortgage.
Provide real Congressional over sight. Do not give a blank check to the Executive branch.
Repay the money through a small tax on stock transactions.
Repay through a surcharge tax on those with incomes over one million.

Here are some links to discussion worth attempting to understand. Believe me, this stuff is SO complex, but SO fundamental that I am willing to struggle through it.

Today's Democarcy now show:
http://www.democracynow.org/2008/9/22/sen_bernie_sanders_robert_scheer_and

Backbone Campaign:
http://www.backbonecampaign.org/storydetail.cfm?id=237

by ktkeller on Mon Sep 22, 2008 at 02:00:51 PM PST

* 2 none 0 *

Electoral importance

If the Democratic Congress allows a blank check to pass through the House and Senate, there will be no possible way to convince enough people to vote for enough Democrats in November to give us the majorities that will be necessary to pass ANY of Obama's proposals. Want Obama in the White House with a Republican Congress? I don't.

Yes, make phone calls to get people to register to vote, get out to vote, support Obama, Gregoire and the rest. Yes. And at the same time, tell them how they can stop this theft of our tax dollars for decades to come. Have the telephone number for all 9 members of the House and both US Senators, and give those phone numbers out every single time you talk to someone. Stay on this topic, along with everything else. If you are calling other states, have the same information available for the state and congressional district that you are calling. If you can't find it, find a URL that you can send to people, and ask for email addresses so you can send it. USE THIS TO HELP US BUILD A MOVEMENT, not just to get votes on November 4th.

Stop this theft, or kiss independent voters goodbye. They might not vote for McCain, but losing them will make things much harder going forward after this election.

by chadlupkes on Tue Sep 23, 2008 at 11:48:58 AM PST

* 3 none 0 *

The Magic Word is: "Fraud"

The securities Paulson wants to buy are filled with fraud.

Buying them would endorse criminal acts in an effort to save WaMu and other institutions.

These institutions can be saved, but not this way.

by dlaw on Tue Sep 23, 2008 at 01:17:26 PM PST

* 4 none 0 *

Bailout? NOT!

This is the letter I sent to Cantwell, Muray and Parlette. Not the best but as mad as I am it was better than my plan "B".
---------------------------------------
The 700 billion dollar bail out of Wall Street is obscene. As Paulson, blathers away about how if this is not done and done now the sky will fall I have to wonder....

If he is sooo smart, why didn't he see this coming? I did and I am definitely not a financial wizard.

He says that if the money is not handed over immediately with not rules or oversight jobs will be lost, more mortgages will default, families will suffer... (That sounds more like a ransom note from drugged out kidnappers than from a representative of the American people)

I have a better idea take the money and put it in a big pot. The government can then pay mortgages of those that lose their jobs, and buy groceries for the families. THAT would most certainly be more helpful than giving it the same greedy idiots that got us into this to begin with.

All one has to do is remember where Paulson worked before he became lord of the treasury to know who he is planning to help here.

He is crying crocodile tears because his Wall Street friends no longer have their multi-million dollar jobs and then he says to not give them their big bonuses out of taxpayer money would make them not want to work as hard to bring the economy back. WHAT??? He is actually planning to allow these greedy slime bags to help the American people out more?!? They should have their accounts frozen and every asset they have taken away and sold to pay this fiasco off and let's add in a public horse whipping for good measure.

He and the rest of the "free market" people let this happen, planned on having the tax payers bail them out and now plan on scaring us into doing it.

They wanted a "free market" then let's have a "free market" NOT ONE DIME for Paulson and his thieving bunch or hoodlums.

Let the chips fall where they may... I bet it would not be near as bad and Paulson and the scare em' and screw em' administration makes it out to be.

Dixie

by Dixie on Tue Sep 23, 2008 at 09:17:13 PM PST

* 5 none 0 *

Nothing is more important right now (full text of financial bailout plan) | 5 comments (5 topical)

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