I don't follow the national stories that much around here, as you know. And I certainly don't claim to have any deep understanding of the crisis in the financial markets, or what should be done from here to make sure it never happens again. But I do understand that $700 billion is a hell of a lot of money, and that the Bush administration cannot be trusted with anything remotely approaching that amount. And I understand that sadly, the Democrats in Congress can't be relied upon to push back against this kind of folly without some strong and vocal leadership showing them the way. So consider me very glad to see this.
As of now, the Bush Administration has only offered a concept with a staggering price tag, not a plan. Even if the U.S. Treasury recovers some or most of its investment over time, this initial outlay of up to $700 billion is sobering. And in return for their support, the American people must be assured that the deal reflects the basic principles of transparency, fairness, and reform.
First, there must be no blank check when American taxpayers are on the hook for this much money.
Second, taxpayers shouldn't be spending a dime to reward CEOs on Wall Street.
Third, taxpayers should be protected and should be able to recoup this investment.
Fourth, this plan has to help homeowners stay in their homes.
Fifth, this is a global crisis, and the United States must insist that other nations join us in helping secure the financial markets.
Sixth, we need to start putting in place the rules of the road I've been calling for for years to prevent this from ever happening again.
And finally, this plan can't just be a plan for Wall Street, it has to be a plan for Main Street. We have to come together, as Democrats and Republicans, to pass a stimulus plan that will put money in the pockets of working families, save jobs, and prevent painful budget cuts and tax hikes in our states.
"A lot of those people will have to sell their homes, they're going to cut back on the private jets and the vacations. They may even have to take their kids out of private school," said [Robert] Frank. "It's a total reworking of their lifestyle."
...."It's going to be very hard psychologically for these people," Frank said. "I talked to one guy who had to give up his private jet recently. And he said of all the trials in his life, giving that up was the hardest thing he's ever done."
UPDATE: Even better.
U.S. House Speaker Nancy Pelosi said Sunday that Congress should not write a "blank check" to Wall Street in a bill to allow the U.S. to buy up distressed assets.
In a statement issued Sunday evening, Pelosi said a Treasury proposal received by Congress "does not include the necessary safeguards" and that congressional Democrats "will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome."
Members of Congress and Bush administration officials have been engaged in talks over the weekend on an administration proposal that would give the Treasury Department authority to buy up to $700 billion in distressed mortgage assets from financial institutions, which is expected to become the basis for legislation that could pass within days.
Pelosi, in her statement, said that the Democrats would seek to limit executive compensation - a position also floated recently by House Financial Services Chairman Barney Frank, D-Mass.
"Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation," Pelosi said in her statement.