Olver: Bail Out Needed to Rescue Main Street
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The Amherst Democrat voted in favor of the bailout along with about three-quarters of the state's all-Democratic congressional delegation. Reps. Stephen Lynch of South Boston, William Delahunt of Quincy and John Tierney of Salem voted no.
In a statement issued last week, Olver said the Bush administration plan was unacceptable. He described it as a "$700 billion blank check" that did not allow for any oversight, any foreclosure mitigation assistance, or any taxpayer protections.
"I would not have voted for a bill that did not contain these necessary taxpayer protections," said Olver in a statement received by iBerkshires.com on Wednesday.
The compromise bill hammered out in "round the clock" negotiations by Democrats and Republicans over the next nine days put enough taxpayer safeguards in to convince Olver to back it.
"I voted for this bill because I believed that inaction would have led to far more costly consequences than the price tag that came with this plan," he said.
"The financial crisis is not confined to lower Manhattan. If this crisis only affected Wall Street bankers, I would have let them sleep in the beds they made," he continued. "Across the country, retirement accounts are shrinking and loans for both businesses and individuals are unavailable. Given the far-reaching impacts of this crisis, and that the health of our economy affects every man, woman and child in this country, we should not view this as a bailout of Wall Street. Rather, it is a buy-in toward our economic recovery."
In statements Tuesday, Olver's Republican challenger for the 1st Massachusetts District this year, Nathan Bech of West Springfield, called the House's failure to pass the measure "another example of the colossal ineffectiveness of the least productive Congress in history."
He blamed incumbents, and Olver in particular, of failing to pursue a bipartisan solution and "legislating our way into this mess."
"John Olver has voted again and again in favor of letting Fannie [Mae] and Freddie [Mac] loose on the American taxpayer," he said, referring to the two quasi-public national mortgage holders.
Olver, however, slammed the Bush administration and the Republicans' former hold on Congress for creating the current financial mess.
Their "ideological position ... removed responsible regulation in favor of a Wall Street free-for-all that gambled away American retirement funds while feeding the greed of executives," he said. "That era is over."
On Capitol Hill, "no" votes came from both the Democratic and Republican sides of the aisle. More than two-thirds of Republicans and 40 percent of Democrats opposed the bill. Several Democrats in close election fights waited until the last moment, then went against the bill as it became clear the vast majority of Republicans were opposing it.
In all, 65 Republicans joined 140 Democrats in voting "yes," while 133 Republicans and 95 Democrats voted "no."
The Senate is expected to vote on its version of the bill on Wednesday; the House anticipates bringing the matter to the floor again on Thursday.
"Regardless of our immediate next steps, the next Congress will need to focus on a multi-faceted approach to getting our broken economy back on track," said Olver, adding a key component will be "a complete overhaul" of the financial sector's regulatory system to prevent another crisis from occurring.
Below are the key provisions added into the bill that failed to pass Monday, as provided by Olver's office:
REINVEST, REIMBURSE, REFORM
IMPROVING THE FINANCIAL RESCUE LEGISLATION
Significant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize American financial markets — including requiring a plan to ensure the taxpayer is repaid in full, and requiring Congressional review after the first $350 billion for future payments.
3 Phases of a Financial Rescue with Strong Taxpayer ProtectionS
Reinvest in the troubled financial markets … to stabilize our economy and insulate Main Street from Wall Street
Reimburse the taxpayer … requiring a plan to guarantee they will be repaid in full
ReforM how business is done on Wall Street … no golden parachutes and sweeping Congressional oversight
CRITICAL IMPROVEMENTS TO THE RESCUE PLAN
Democrats have insisted from day one on substantial changes to make the Bush-Paulson plan acceptable — protecting American taxpayers and Main Street — and these elements are included in the draft legislation under consideration.
Protection for taxpayers, REQUIRING
A PLAN TO BE REPAID IN FULL
§ Requiring Congressional review after the first $350 billion is disbursed
§ Gives taxpayers a share of the profits of participating companies, or puts taxpayers first in line to recover assets if a company fails
§ Requires a President five years from now to submit a plan to ensure taxpayers are repaid in full, with Wall Street making up any difference
§ Allows the government to also purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families
Limits on excessive compensation
for CEOs and executives
§ For companies publicly auctioning over $300 million:
No multimillion dollar golden parachutes for top 5 executives after auction
No tax deduction for executive compensation over $500,000
Penalizes golden parachutes for CEOs who are fired or have run the company into the ground
§ For companies from which the government makes direct purchases:
No multi-million dollar golden parachutes
Limits CEO compensation that encourages unnecessary risk-taking
Recovers bonuses paid to executives who promise gains that later turn out to be false or inaccurate
Strong independent oversight and transparency
§ Four separate independent oversight entities or processes to protect the taxpayer
A strong oversight board appointed by bipartisan leaders of Congress
GAO oversight and audits at Treasury to ensure strong controls; to prevent waste, fraud, and abuse
An independent Inspector General to monitor the Treasury Secretary’s decisions
Transparency—requiring posting of transactions online—to help jump-start private sector demand
§ Meaningful judicial review of the Treasury secretary’s actions
Help to prevent home foreclosures
crippling the American economy
§ The government can work with loan servicers to change the terms of mortgages (reduce principal or interest rate, lengthen time to pay back the mortgage) to reduce the 2 million projected foreclosures in the next year
§ Extends provision (enacted earlier in this Congress) to stop tax liability on mortgage foreclosures
§ Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis — allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks
Office of Speaker Nancy Pelosi – September 28, 2008
