ALG Calls for GOP Filibuster Against Financial Takeover and $50 Billion Bailout Fund

Here's a suggestion: if Senators want to bail out some favored campaign contributor like Fannie and Freddie, they can do it like Senator Dodd did in 2008 when the GSE's were taken over: have an up-or-down vote so that constituents can hold their Senators accountable."—Bill Wilson, President of ALG.

April 19th, 2010, Fairfax, VA—Despite reports that it might be rescinded, still remaining in the Senator Chris Dodd's financial takeover bill is a permanent revolving TARP fund totaling $50 billion that Americans for Limited Government Bill Wilson has said is "just a means for Congress to avoid having to vote on future taxpayer-funded bailouts."

Senator Mark Warner today defended the $50 billion fund, "If there were other ways to do this, we'd listen… We need to hear specific suggestions, not broadbased partisan attacks."

"Here's a suggestion," said Wilson, explaining, "if Senators want to bail out some favored campaign contributor like Fannie and Freddie, they can do it like Senator Dodd did in 2008 when the GSE's were taken over: have an up-or-down vote so that constituents can hold their Senators accountable."

"Because he was a top recipient of contributions from Fannie and Freddie's PAC's and employees, and received a VIP mortgage from Countrywide, Dodd was forced to not seek re-election.  If there is a permanent bailout fund, Senators like Dodd in the future can avoid accountability for government paying back heavy campaign contributors by hiding the bailout behind an unelected bureaucracy," Wilson explained.

Wilson today urged the Senate Republican Caucus to "filibuster Senator Chris Dodd's government takeover of the financial sector before Washington assumes control of yet another sector of the American economy and creates a permanent bailout fund."

"Senate Republicans are all that stands in the way of this bill," Wilson said, "which means the American people are counting on them to finally deal a decisive blow against this massive expansion of government."

"Now is the time to finally say 'no' to more government," Wilson declared.

Wilson noted that since Fannie Mae and Freddie Mac were nationalized in 2008, "every single government takeover proposed has been implemented, no matter how much the people protested." He cited the government seizures of GM, Chrysler, AIG, the health care industry, and the retention of Fannie Mae and Freddie Mac by the Treasury.

"Unless Republicans can now unify to stop another government takeover when they have the opportunity, this bill will pass rapidly without a debate upon the proper government response to the financial crisis," Wilson explained. 

"The answer to a crisis that government caused is to reform the government policies that forced banks to give out loans to those who could not afford to pay them back.  It is to rein in the Federal Reserve that kept interest rates too low for too long.  And it is to eliminate the culture of corruption that enabled Fannie Mae and Freddie Mac to escape oversight and reform for decades while they helped fuel the housing bubble," Wilson said. 

Senator Dodd promised that his bill would prevent firms from defrauding investors.  "Let there be no doubt in my mind, our bill would have prevented that kind of events from happening, in my view, and that's what the public needs to know," said Dodd.

Wilson disagreed, saying "This bill has nothing at all to do with preventing fraud.  It does nothing at all to rein in Fannie Mae and Freddie Mac, which helped to cause the crisis by explicitly defrauding investors when they misrepresented the risks associated with the purchase of GSE-issued mortgage-backed securities."

The bill would, as reported by NPLC.org, create a Financial Stability Oversight Council to put into receivership any financial institution it deems "too risky"; it puts the Federal Reserve in charge of a Consumer Financial Protection Bureau with sweeping powers to regulate any institution with a portfolio exceeding $10 billion; and "[u]pon a consensus by the Fed, the Treasury Department and Federal Deposit Insurance Corporation (FDIC), unstable institutions would be turned over to the FDIC."

"The American people do not need yet another government takeover," Wilson said, concluding, "Enough is enough with these endless bailouts.  Congress needs to put an end to 'too big to fail,' not perpetuate it by creating a permanent bailout fund for institutions that should be in bankruptcy court."