Pork Barrel Spending Helps the US Bailout Medicine
A chunk of pork-barrel spending sweetens the bailout deal by Congress, by E. Manning.
The first bailout was largely unpalatable to Congress, largely because of the reaction of taxpayers. Their rejection of the first bailout also makes lawmakers appear responsible, careful and in control. Don’t kid yourself. A healthy chunk of pork-barrel spending makes almost any Washington legislation go down much easier.
Yesterday, the Senate tacked an additional 341 pages onto the original House bill in the form of various renewable fuel and energy tax incentives, a number of additional tax provsions, and the Wellstone-Domenici Mental Health Parity Act.
The 2008 Emergency Economic Stabilization Act contains stronger oversight protections than the three-page bill Treasury Secretary Henry Paulson offered a few days ago. That isn’t saying much though. Checks and balances are truly in question. Section 101of the bailout directs the U.S. Secretary to “prevent unjust enrichment of financial institutions…by preventing the sale of a troubled asset at a higher price than what the seller paid to purchase the asset.” Suspending accounting rules does nothing to change the value of the junk assets, allowing institutions to value their assets based on whatever scenario they like. Hmmm.
Section 104 allows for oversight by the same folks that allowed the regulatory debacle to begin with including the U.S. Treasury Secretary and the Federal Reserve. The oversight is window dressing with no direction to make the reports public or to report corruption or abuse.
The legislation in Section 107 allows the Treasury Secretary to waive “specific provisions” if he determines that “urgent and compelling circumstances make compliance with such provisions contrary to the public interest.” Nice.
What about foreclosure prevention? “…the Secretary may use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable foreclosures.” There is very little material to govern this process. There is plenty of wiggle room for problems here and very little action for taxpayers here. Government can continue to rubber stamp the actions they are making now which is pretty much nothing at all. This is not a taxpayer or foreclosure bailout by any stretch.
The Secretary must “make available to the public, in electronic form,” a description of assets including cost. Hopefully, an average person will be able to understand the information. No such provision is made. Other oversight provisions made seem to be to good effect. At least they have been thinking. Legislators have also been thinking about copious amounts of pork. A few examples are below: