Dear Mr. O'Maley:Feinstein's Floor Statement September 26, 2008
Thank you for your letter expressing concern about Congress' consideration of a plan to meet our Nation's credit crisis with financial help from the Federal Government. This is a difficult situation for which there are no perfect solutions, and I would like to share my thoughts and concerns about this issue with you.
On September 19, 2008, Secretary of the Treasury Henry M. Paulson, Jr. announced a legislative proposal to use $700 billion to purchase illiquid mortgage-related assets from ailing financial institutions. Secretary Paulson's three-page proposal was a non-starter, and without critical changes it has no chance of approval from Congress.
This proposal would have given a blank check to an economic czar who would have been empowered to spend it without administrative oversight, legal requirements, or legislative review. Decisions made by the Treasury Secretary would be non-reviewable by any court, agency, or Congress. The proposal also lacked a requirement for regular reports to Congress on the status of the program. This was simply untenable.
Since this announcement, my offices have received thousands of comments from Californians like you concerned about how this action will affect them. Yet, I believe prudent action must be taken. The bill should include the following principles: a phase-in of funding; oversight, accountability and transparency; a mechanism allowing the Secretary of the Treasury to modify mortgages to prevent additional foreclosures; and a precise cap on executive compensation.
The current credit crisis affects all Americans. If action is not taken to stem the crisis, Americans risk losing their homes, jobs, personal savings, life insurance and more. Banks will cease to lend to businesses and homeowners, and credit will be increasingly difficult to come by for average Americans. I strongly believe that the consequences of failing to act now would be greater than not acting at all.
Attached please find a statement I recently made on the floor of the Senate expressing my feelings on this issue. Please know that I will keep your thoughts in mind as this situation unfolds.
Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Here are a few snips from U.S. Senator Dianne Feinstein's Floor Statement on the Economic Rescue Proposal September 26, 2008
"Mr. President, to date I have received from Californians more than 50,000 calls and letters, the great bulk of them in opposition to any form of meeting this crisis with financial help from the Federal Government.Action To Take
I believe the crisis of 2008 stems from the failure of Federal regulators to rein in this Wild West mentality of those Wall Street executives who led those firms and who thought that nothing was out of bounds. Every quick scheme was worth the time, and worth a try. Congress cannot ignore this as the root cause of the crisis. It was inherent in the subprime marketplace, and it has now spread to the prime mortgage marketplace.
It is also critical that accurate assessments of the value of these illiquid mortgage-related assets be performed to limit the taxpayers' exposure to risk and structure purchases to ensure the greatest possible return on investment.
Taxpayer money must be shielded at all costs from risk to the greatest extent possible.
As to executive compensation limits, simply put, Californians are frosted by the absence of controls on executive compensation. Virtually all of the 50,000 phone calls and letters mentioned this one way or another. There must be limits. I am told that the reason the Treasury Secretary does not want limits on executive compensation is because he believes that an executive then will not bring his company in to partake in any program that is set up.
Here is my response to that: We can put that executive on his boat, take that boat out in the ocean, and set it on fire.
The one proposal that was made by one of the Presidential candidates that I agree with is that there should be a limit of $400,000 on executive compensation. If they don't like it, too bad, don't participate in the program.
We need to press Senator Dianne Feinstein hard.
Let her know that the problems with pay scales goes far, far beyond pay of the CEO. Many top officers at these companies receive pay in excess of $400,000 and that does not count stock options. No one at any of these companies should make more than $400,000 and all existing stock options should be null and void as well for any company participating in the plan. Furthermore there should not be any stock options or pay raises until every cent of taxpayer money is paid back.
We also need to let her know, once again that the Paulson plan is fundamentally flawed and there is time to do it right.
Fax Now!
Call Now!
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I went with MetroFax. 1000 pages at a very cheap price.
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Fax Title Executive Pay, Stock Option, Salary Freeze
Sample Fax
Dear Senator FeinsteinIf you do not have internet faxing get it.
Thank you for standing up for reductions on executive pay for any company participating in any bailout. However, the problem goes far beyond executive compensation.
Many officers and non-officers at these corporations make in excess of $400,000. Furthermore, excessive stock options are handed out like candy at Christmas. All existing stock options should be declared null and void at any bank receiving a taxpayer handout.
No Stock Options or Pay Raises
There should be no stock option grants or pay raises and there should be pay caps until every dime of taxpayer money is paid back. All existing options must be discarded.
Senator Start All Over. The Paulson Plan Will Not Work.
Senator, the Paulson Plan even with the modifications you suggest, simply will not work. Please consider what the leading economists in the country are saying.
Nouriel Roubini: "Paulson Plan is a Disgrace"
On Friday, Nouriel Roubini, the most widely respected economist in the country stated...
"The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown."
Former FDIC Chairman Weighs In
"Bailout Plan Will Not 'Work' in Current Form"
190+ Economists Slam Bailout
Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.
Paul O'Neil Is Against The Plan
"I don't think he understands or knows much about any of this and it shows. It is possible to re-liquefy the credit system without 'We the People' owning $700 billion worth of homes," Paul O'Neil said.
BB&T Corp. Chief Executive Officer John Allison critiques the plan
Treasury "is totally dominated by Wall Street investment bankers" and "cannot be relied on to objectively assess" the impact of government policy on the financial industry, Allison wrote in a Sept. 23 letter to Congress.
The letter was verified by Bob Denham, a spokesman for BB&T, North Carolina's third-largest bank.
- What is it that Paulson knows that 190+ economists don't?
- What is it that Paulson knows that William Isaac, former chairman of the Federal Deposit Insurance Corp. does not know?
- What is it that Paulson knows that former Treasury Secretary O'Neil does not know?
- What is it that Paulson knows that small bank CEOs who avoided this mess do not know?
- What is it that Paulson knows that Roubini does not know?
Remember it was Paulson who was telling us all how safe the US Banking system was just a few weeks ago.
Roubini: "It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan."
Revised Version As Of Midnight Saturday Still Unacceptable!
I have read the latest proposal and I have come to the same conclusion. No Deal.
Salary caps and elimination of all stock options MUST be included in any proposal, not just for executives, but for every employee in the company. Also $350 billion is way too high, and the plan is still fatally flawed. Paulson's approach is simply the wrong one.
Paulson's approach is simply the wrong one. Taxpayer risk is too high.
It is time to scrap the Paulson Plan and start all over. Doing nothing is far better than wasting $350-700 billion in a Wall Street Bailout Boondoggle that puts an already stressed taxpayer in further jeopardy.
I will vote out of office anyone who votes for this revised plan, and I will encourage all my friends to do the same"
Your Name
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Be a part of history!
A grass roots campaign like this has never killed a major bill. You can help do it.
Flood them with calls, emails, and faxes.
Just Do It!
It is time to Take Back America from Wall Street and return a piece of the pie to Main Street USA.
Get Faxing!
Get Phoning.
Send a similar Fax to your senators and Congressional Representative.
Contact The House
THIS IS CRITICAL: Please fax AND phone your congressman and Nancy Pelosi and Barney Frank.
Call them with this simple message "I have seen the revised bill, you will lose my vote if it passes".
Congressional Phone And Fax Numbers
Contact The House
Please fax AND phone your congressional representative and Nancy Pelosi, Barney Frank, and Senator Dianne Feinstein.
Phone Numbers
Rep. Nancy Pelosi (D)(202) 225-4965
Rep. Barney Frank (D)(202) 225-5931
Sen. Dianne Feinstein (D) (202) 224-3841
Sen. Richard Shelby (R) (202) 224-5744
Sen. Harry Reid (D) 202-224-3542
Sen. Jim DeMint (R) 202-224-6121
Sen. John Ensign (R) (202) 224-6244
Sen. Jim Bunning (R) 202.224.4343
Sen. Chuck Grassley (R) (202) 224-3744
Sen. John McCain (R) 202-224-2235
Sen. Barack Obama (D) (202) 224-2854
Call them with this simple message "I have seen the revised bill, you will lose my vote if it passes".
Click Here For Congresional Phone And Fax Numbers
Senate Fax List
Please fax everyone on this list.
Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)
Sen. Harry Reid (D) 202-224-7327
Sen. Jim DeMint (R) 202-228-5143
Sen. John Ensign (R) 202-228-2193
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020
Sen John McCain (R) 202-228-2862
Sen. Barack Obama 202-228-4260
Sen. John D. Rockefeller 202-224-7665
Sen. Dianne Feinstein 202-228-3954
Sen. Ron Wyden 202-228-2717
Sen. Evan Bayh 202-228-1377
Sen. Barbara Mikulski 202-224-8858
Sen. Bill Nelson 202-228-2183
Sen. John Kerry 202-224-8525
Sen. Daniel Inouye 202-224-6747
Sen. Hillary Clinton 202-228-0282
Rep. Barney Frank 202-225-0182
Rep. Nancy Pelosi 202-225-4188
Please Fax own senators and representative as well.
Please send this email to 10 others and have them do the same.
Thanks
We can STILL make a difference.
Addendum:
Yet another agreement has supposedly been reached. See Congress, White House reach financial bailout deal. Given 3 failures already, I am not sure if this is the real deal or not. The amount is $350 billion, but I must remind everyone this has not passed the House yet, (it is just a leadership vote), and it certainly has not passed the Senate.
For the benefit of taxpayers, I want every ounce of flesh I can get. Please press on! Stay focused on the mission, and that mission is to kill it and if that fails to get it watered down as best we can.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
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