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The Senate’s Revised Bailout Bill: A Crap Sandwich With A Side Of Pork

by @ 3:04 pm on October 1, 2008. Filed under Credit Crisis, Economics, Politics, Sub-Prime Mortgage Crisis

As I noted earlier today, the “revised” bailout bill is basically the same bill that the House rejected Monday with  a number of minor adjustments designed solely to get 11 more votes in the House of Representatives:

NEW YORK (CNNMoney.com) — The core of the Senate financial bailout bill is the Bush administration’s plan to buy troubled assets from banks, but the proposal includes a number of new provisions aimed at Main Street.

The changes are intended to attract more votes in the House, which defeated an earlier version on Monday. In particular, they are designed to attract more House Republicans, two-thirds of whom voted no.

The Senate is set to vote on the bill Wednesday evening. Republican presidential nominee Sen. John McCain, R-Ariz., and Democratic nominee Sen. Barack Obama, D-Ill., said they would be present.

The House is expected to vote on Friday, according to aides to Democratic leaders.

(…)

The bill adds provisions to the House version – including temporarily raising the FDIC insurance cap to $250,000 from $100,000. It says the FDIC may not charge member banks more to cover the increase. But that doesn’t prevent the agency from doing so to cover existing concerns with the fund, according to Jaret Seiberg, a financial services analyst at the Stanford Group, a policy research firm.

Instead, the bill allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit.

The bill also adds in three key elements designed to attract House Republican votes – particularly popular tax measures that have garnered bipartisan support.

It would extend a number of renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels.

The Senate bill would also continue a host of other expiring tax breaks. Among them: the research and development credit for businesses and the credit that allows individuals to deduct state and local sales taxes on their federal returns.

In addition, the bill includes relief from the Alternative Minimum Tax, without which millions of Americans would have to pay the so-called “income tax for the wealthy.”

And just in case adding in these provisions, which do nothing to change what is fundamentally wrong with the bill, aren’t enough to convince 11 Representatives to change their votes, Ed Morrissey reports that they’re also throwing in a load of pork as well:

New Tax earmarks in Bailout bill
- Film and Television Productions (Sec. 502)
- Wooden Arrows designed for use by children (Sec. 503)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.
- Virgin Island and Puerto Rican Rum (Section 308)
- American Samoa (Sec. 309)
- Mine Rescue Teams (Sec. 310)
- Mine Safety Equipment (Sec. 311)
- Domestic Production Activities in Puerto Rico (Sec. 312)
- Indian Tribes (Sec. 314, 315)
- Railroads (Sec. 316)
- Auto Racing Tracks (317)
- District of Columbia  (Sec. 322)
- Wool Research (Sec. 325)

I love the auto racing tracks in particular.  I can see the headlines now: “Global financial markets melt down, NASCAR, Caribbean rum hardest hit”.  As many people have said now, I’d be more inclined to take this crisis seriously if people on the Hill didn’t use it to butter up their favored constituencies.

The cynicism with which the political leadership is treating this entire enterprise is rather striking, and would be surprising if it weren’t for the fact that we’ve seen this before, and will see it again.

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5 Responses to “The Senate’s Revised Bailout Bill: A Crap Sandwich With A Side Of Pork”

  1. [...] Below The Beltway » Blog Archive » The Senate’s Revised Bailout Bill: A Crap Sandwich With A Sid… [...]

  2. Bryant Arms says:

    I wouldn’t be surprised if the recent overhaul of bankruptcy legislation was designed for this economic situation; it turns human debtors into indentured servant. And that is necessary for the following reason:

    The ’sssssss’ we are noticing with this credit crunch is just the leak before the big burst. This credit bubble has been inflated by a logorithmic base 10 scale of dollar creation.
    The practice of using 90% of ‘real’ wealth for lending that can then be invested and re-deposited for recycling again and again for more and more credit probably has the same effect of simply printing more money. The difference between those two ways of creating wealth is that creating money by credit inflation redistributes wealth for the benefit of financiers. And printed money is real; not fake.

    This credit bubble burst should, then, be creating a shortage of money. And the cure may be as simple as the government printing more money. The only problem with that scheme is that there would not be another bubble to burst to correct for over-inflation. Printed dollars don’t evaporate away like the ones the financiers are trying to sell taxpayers now.

    And that is why those who have engineered this bubble need those new draconian bankruptcy laws. Only wage earners can turn this fake money into real wealth. And that is why the Bush administration and other supporters of the great bailout plan are adamantly against giving bankruptcy judges the right to restructure debt according to who is most responsible for making bad loans.

    Bryant Arms

  3. [...] on again by the House on Thursday. The Senate, possibly in violation of the Constitution, passed a ‘revised bill’ — some revisions include more tax breaks in attempts to sway Republican approval, along with [...]

  4. [...] victory was short-lived, however, because only two days later the Senate, after adding a bunch of pork to the House’s crap sandwich, overwhelmingly passed the bill and told us that we were just too dumb to understand what was [...]

  5. [...] victory was short-lived, however, because only two days later the Senate, after adding a bunch of pork to the House’s crap sandwich, overwhelmingly passed the bill and told us that we were just too dumb to understand what was [...]

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