2012 Candidates for President

Ron Paul

Summary

Congressman Paul opposed the TARP legislation, and has consistently stated that he opposes all bailouts. In 2008, he argued that there were three reasons to oppose the TARP legislation.

• It is immoral--Dumping bad debt on the innocent taxpayers is an act of theft and is wrong.
• It is unconstitutional--There is no constitutional authority to use government power to serve special interests.
• It is bad economic policy--By refusing to address the monetary system while continuing to place the burdens of the bailout on the dollar, we can be certain that in time, we will be faced with another, more severe crisis when the market figures out that there is no magic government bailout or regulation that can make a fraudulent monetary system work.

In later speeches, Congressman Paul noted that the need to "do something" was overstated as the market correction would eventually adjust to economic realities. He notes that the moral hazards that come with rewarding incompetent business models and the precedent set by the bailouts was too high.

Throughout the bailout debate, Congressman Paul argued that the market corrections needed to be allowed to happen so that the inevitable stabilization could occur. He argued that allowing the companies to fail and declare bankruptcy would be the best "bailout" as the economic realities could be dealt with by the market. He argued against the concept that an entity could be too big to fail or should be given special treatment because it represented an economic incentive to act.

First Floor Speech Against TARP

On September 29, 2008, Congressman Paul spoke on the House floor about his opposition to the Troubled Asset Relief Program. (H 10369). The legislation in question was the initial attempt to pass TARP and was rejected in Congress.

Mr. PAUL. Madam Speaker, I rise in strong opposition to this bill. This is only going to make the problem that much worse. The problem came about because we spent too much; we borrowed too much, and we printed too much money; we inflated too much, and we overregulated. This is all that this bill is about is more of the same.

So you can't solve the problem. We are looking at a symptom. We are looking at the collapsing of a market that was unstable. It was unstable because of the way it came about. It came about because of a monopoly control of money and credit by the Federal Reserve System, and that is a natural consequence of what happens when a Federal Reserve System creates too much credit.

Now, there have been a fair number of free market economists around who have predicted this would happen. Yet do we look to them for advice? No. We totally exclude them. We don't listen to them. We don't look at them. We look to the people who created the problem, and then we perpetuate the problem.

The most serious mistake that could be made here today is to blame free market capitalism for this problem. This has nothing to do with free market capitalism. This has to do with a managed economy, with an inflationary system, with corporatism, and with a special interest system. It has nothing to do with the failure of free markets and capitalism. Yet we're resorting now, once again, to promoting more and more government.

Long term, this is disastrous because of everything we're doing here and because of everything we've done for 6 months. We've already pumped in $700 billion. Here is another $700 billion. This is going to destroy the dollar. That's what you should be concerned about. Yes, Wall Street is in trouble. There are a lot of problems, and if we don't vote for this, there are going to be problems. Believe me: If you destroy the dollar, you're going to destroy a worldwide economy, and that's what we're on the verge of doing, and it is inevitable, if we continue this, that that's what's going to happen. It's

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going to be a lot more serious than what we're dealing with today.
We need to get our house in order. We need more oversight--that is a certainty--but we need oversight of the Federal Reserve System, of the Exchange Stabilization Fund and of the President's Working Group on Financial Markets. Find out what they're doing. How much have they been meddling in the market?

What we're doing today is going to make things much worse.

The process of this bailout reminds me of a panic-stricken swimmer thrashing in the water only making his situation worse. Even a ``bipartisan deal''--whatever that is supposed to mean--will not stop the Congress from thrashing about.

The beneficiaries of the corrupt monetary system of the last 3 decades are now desperately looking for victims to stick with the bill after they have reaped decades of profit and privilege.

The difficulties in our economy will continue because the legislative and the executive branches have not yet begun to address the real problems. The housing bubble's collapse, as was the dot corn bubble's collapse, was predictable and is merely a symptom of the monetary system that brought us to this point.

Indeed, we do face a major crisis, but it is much bigger than the freezing up of Wall Street and dealing with worthless assets on the books of major banks. The true crisis is the pending collapse of the fiat dollar system that emerged after the breakdown of the Bretton Woods agreement in 1971.

For 37 years the world built a financial system based on the dollar as the reserve currency of the world in an attempt to make the dollar serve as the new standard of value. However since 1971, the dollar has had no intrinsic value, as it is not tied to gold. The dollar is simply a fiat currency, which has fluctuated in value on a daily, if not hourly, bias. This worked to some degree until the market realized that too much debt and malinvestment existed and a correction was required.

Because of our economic and military strength, compared to other countries, trust in America's currency lasted longer than deserved. This resulted in the biggest worldwide economic distortion in all of history. The problem is much bigger than the fears of a temporary decline on Wall Street if the bailout is not agreed to.

Money's most important function is to serve as a means of exchange--a measurement of value. If this crucial yardstick is not stable, it becomes impossible for investors, entrepreneurs, savers, and consumers to make correct decisions; these mistakes create the bubble that must eventually be corrected.

Just imagine the results if a construction company was forced to use a yardstick whose measures changed daily to construct a skyscraper. The result would be a very unstable and dangerous building. No doubt the construction company would try to cover up their fundamental problem with patchwork repairs, but no amount of patchwork can fix a building with an unstable inner structure. Eventually, the skyscraper will collapse, forcing the construction company to rebuild--hopefully this time with a stable yardstick. This $700 billion package is more patchwork repair and will prove to be money down a rat hole and will only make the dollar crisis that much worse.

But what politicians are willing to say that the financial ``skyscraper''--the global financial and monetary system-is a house of cards. It is not going to happen at this juncture. They're not even talking about this. They talk only of bailouts, more monetary inflation, more special interest spending, more debt, and more regulations. There is almost no talk of the relationship of the Community Reinvestment Act, HUD, and government assisted loans to the housing bubble. And there is no talk of the oversight that is desperately needed for the Federal Reserve, the Exchange Stabilization Fund, and all the activities of the President's Working Group on financial markets. When these actions are taken we will at last know that Congress is serious about the reforms that are really needed.

In conclusion, there are three good reasons why Congress should reject this legislation:

It is immoral--Dumping bad debt on the innocent taxpayers is an act of theft and is wrong.

It is unconstitutional--There is no constitutional authority to use government power to serve special interests.

It is bad economic policy--By refusing to address the monetary system while continuing to place the burdens of the bailout on the dollar, we can be certain that in time, we will be faced with another, more severe crisis when the market figures out that there is no magic government bailout or regulation that can make a fraudulent monetary system work.

Monetary reform will eventually come, but, unfortunately, Congress' actions this week make it more likely the reform will come under dire circumstances, such as the midst of a worldwide collapse of the dollar. The question then will be how much of our liberties will be sacrificed in the process. Just remember what we lost in the aftermath of 9-11.

The best result we can hope for is that the economic necessity of getting our fiscal house in order will, at last, force us to give up our world empire. Without the empire we can then concentrate on rebuilding the Republic.

Initial Failure of TARP

In September of 2008, Congressman Paul used his "Texas Talk" address to discuss the initial failure of the TARP legislation to pass through Congress.

Lipstick on a Bailout

This time last week, the biggest bailout in the history of the world seemed to be a fait accompli. Last weekend, the Fed Chairman and the Secretary of the Treasury had harsh words of doom and gloom for Congressional leaders, with the rest of the administration parroting along, and by last Monday it seemed both parties were about to fall in line and vote our Republic away by socializing the banking industry through this bailout.

Foolish business behavior was about to be rewarded, and propped up a little longer, the bubble blown a little bigger, and our coming Depression made that much greater, but then something happened on the way to the House floor.

Citizens made their voices heard.

The real story behind the story in Congress this week was the thousands of calls and emails sent to Representatives, clogging up inboxes and even slowing down the House internet system. Slowly, like the Titanic turning around, sentiments on the Hill shifted, and we heard Congressmen capitulating and changing their tune a little, desperately trying to find ways to salvage the bailout without completely enraging their constituencies.

Now we hear about taxpayer protections, about golden parachutes, and about other nuances that hardly cover up the fact that we would be creating more money out of thin air and further devaluing the dollar! The problem is not HOW the government is spending this money; it’s the fact that the government is spending this money. We don’t have it. We are already nearly $10 trillion in debt, not including unfunded liabilities. We already spend about $1 trillion a year we don’t have on our overseas empire. Now nearly $1 trillion more is somehow supposed to magically appear and solve all our problems! No – creating more money might delay the inevitable for some well-connected banks on Wall Street, but in a few weeks we will find ourselves right back in this same position, but much poorer.

The unfortunate thing is that we’ve already spent at least $700 billion on other bailouts that did not solve the problem. And while all this negotiation was taking place, the auto industry was quietly bailed out, with no controversy, no discussion, to the tune of $25 billion.

Inevitably, it appears Congress will call their constituents’ bluff and the bailout will pass, because that is the habit Wall Street and Washington have fallen into. People are right to be concerned about our financial future. I’ve been talking for 30 some years about reasons we need to be concerned and change our ways. We find ourselves now in a position of no good options, and no silver bullets. But the worst thing we can do is to compound our problems by intensifying the mistakes of the past. We do have tough economic times ahead, no doubt, no matter what we do, even if we do nothing. The question, is will we have the courage to take our medicine now and get it over with, or will we prolong the misery for many years to come? I’m less and less optimistic about the answer to that question.

Second Floor Speech Against TARP

On October 3, 2008 Congressman Paul again spoke on the House floor about his opposition to the TARP legislation. He noted that the recession coming is an unpreventable correction to the market. (H10772) This was the second attempt to pass the TARP legislation and was eventually successful.

Mr. PAUL. Madam Speaker, I rise in strong opposition to this bill because it won't solve our problem. It is said that we are in a liquidity crisis and a credit crunch and all we need is more credit. The Federal Reserve has already injected over a trillion dollars worth of credit and it doesn't seem to have helped a whole lot. Injecting another 600 to $700 billion will not solve the problem.

I think one of the reasons why we are floundering around here is that we don't understand the problem because instead of it being a credit crunch, I think it is a lot more serious than that. That is, I think what is happening in the market today is signaling something much more draconian because it is probably telling us that our government is insolvent, that we are on the verge of bankruptcy and big things are starting to happen. And we don't quite understand it, so we fall back on the old cliches that what we need is more appropriations, more spending, more debt, and more credit in the market. That means more inflation by the Federal Reserve system. And yet, that is what caused the trouble.

We want to do this it is said to prevent the recession or depression because that is unbearable. But the truth is you should have thought about that 10 or 15 years ago because the financial bubble created by the excess of credit and the lowering of the interest rate is the cause of the recession. The recession is a demand. It is a must; you can't avoid it. Yes, it has been papered over several times over the last several decades, but that just made the bubble bigger.

The message is now you can't paper it over any longer. So the recession and/or depression will come.

My sincere conviction is that by doing more mischief and not allowing markets to adjust, debt to be liquidated, you're going to guarantee a depression. It is going to be prolonged. The agony is going to be there for a lot longer than if you allow markets to adjust. Liquidation of debt. Let the bankruptcy occur, let the good assets come up, and let it react.

This idea that there is not enough regulation is completely wrong. There is too much regulation, and lack of regulation of the Federal Reserve system and the exchange of stabilization.

Third Floor Speech Against TARP

Later on October 3, 2008 Congressman Paul spoke on the House floor against the TARP legislation.

Mr. PAUL. Madam Speaker, only in Washington could a bill demonstrably worse than its predecessor be brought back for another vote and actually expect to gain votes. That this bailout was initially defeated was a welcome surprise, but the power-brokers in Washington and on Wall Street could not allow that defeat to be permanent. It was most unfortunate that this monstrosity of a bill, loaded up with even more pork, was able to pass.

The Federal Reserve has already injected hundreds of billions of dollars into U.S. and world credit markets. The adjusted monetary base is up sharply, bank reserves have exploded, and the national debt is up almost half a trillion dollars over the past two weeks. Yet, we are still told that after all this intervention, all this inflation, that we still need an additional $700 billion bailout, otherwise the credit markets will seize and the economy will collapse. This is the same excuse that preceded previous bailouts, and undoubtedly we will hear it again in the future after this bailout fails.

One of the most dangerous effects of this bailout is the incredibly elevated risk of moral hazard in the future. The worst performing financial services firms, even those who have been taken over by the Government or have filed for bankruptcy, will find all of their poor decision-making rewarded. What incentive do Wall Street firms or any other large concerns have to make sound financial decisions, now that they see the Federal Government bailing out private companies to the tune of trillions of dollars? As Congress did with the legislation authorizing the Fannie and Freddie bailout, it proposes a solution that exacerbates and encourages the problematic behavior that led to this crisis in the first place.

With deposit insurance increasing to $250,000 and banks able to set their reserves to zero, we will undoubtedly see future increases in unsound lending. No one in our society seems to understand that wealth is not created by government fiat, is not created by banks, and is not created through the manipulation of interest rates and provision of easy credit. A debt-based society cannot prosper and is doomed to fail, as debts must either be defaulted on or repaid, neither resolution of which presents this country with a pleasant view of the future. True wealth can only come about through savings, the deferral of present consumption in order to provide for a higher level of future consumption. Instead, our Government through its own behavior and through its policies encourages us to live beyond our means, reducing existing capital and mortgaging our future to pay for present consumption.

The money for this bailout does not just materialize out of thin air. The entire burden will be borne by the taxpayers, not now, because that is politically unacceptable, but in the future. This bailout will be paid for through the issuance of debt which we can only hope will be purchased by foreign creditors. The interest payments on that debt, which already take up a sizeable portion of Federal expenditures, will rise, and our children and grandchildren will be burdened with increased taxes in order to pay that increased debt.

As usual, Congress has shown itself to be reactive rather than proactive. For years, many people have been warning about the housing bubble and the inevitable bust. Congress ignored the impending storm, and responded to this crisis with a poorly thought-out piece of legislation that will only further harm the economy. We ought to be ashamed.

The Need to Do Something

In October of 2008, Congressman Paul used his "Texas Talk" address to discuss the illusion that Congress needed to something - anything to respond to the economic problems.

The Do-Something Congress

It has not been a good week for the Republic. It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.

The bailout failed the first time it was brought to the House. Undaunted, the Senate pressed on by attaching the bailout as an amendment to another House passed bill that was pending in the Senate. The new bailout version had new taxes, so according to the Constitution it should not have originated in the Senate.

The rallying cry heard all over the Hill the past two weeks was that Congress must act. Our economy is facing a meltdown. Would this bill fix it? Nobody could really explain how it would. In fact, few demonstrated any real understanding of credit markets, of derivatives, of credit default swaps or mortgage-backed securities. If they did, they would have known better than to vote for this bill. All they knew was that this administration was saying some frightening things, and asking for a lot of money. And when has Congress ever been able to come up with a better solution to a problem than to throw more of your money at it? So that is what Congress did, enacting a financial PATRIOT Act in the process.

In its embarrassment at being called a "Do-Nothing Congress" the 110th Congress took decisive action and did SOMETHING. No matter that it was the wrong thing. In fact, it wasn't until the Senate had a chance to load it up with even MORE spending, when it was finally inflationary and horrible enough, at $850 billion instead of a mere $700 billion, that it passed – and with a comfortable margin, in spite of constituent calls still coming in overwhelmingly against it. 57 members switched their vote!

The market went down anyway. Our nation is now just that much more in the hole. You will pay your part of this mess through inflation, and very likely hyperinflation.

Sometimes doing nothing is much better than thrashing about aimlessly. When one is caught in quicksand, for example, or when one doesn't understand economics and finds oneself in the position Congress was in for the past two weeks, with decades of irresponsible monetary policy coming to a head. Why should we trust the same people who said just a few months ago that the economy was perfectly sound? The same people who just knew there were weapons of mass destruction? The same people that crammed the PATRIOT Act down our throats? Why not consult the people who had the foresight and understanding to see this coming? They would have recommended such logical actions as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system. How about abolishing the Federal Reserve altogether? There are many things that could have been done, but don’t expect Congress take a course of action that comes from a place of understanding and competence when they could just spend money.

This bailout will be the legacy of the 110th "Do-Something" Congress, along with record low approval ratings. Here's hoping the 111th Congress will be a "Do the Right Thing" Congress, and will focus on repealing and abolishing what is wrong with government instead of reinforcing it.

Too Big to Fail

In October of 2008, Congressman Paul used his "Texas Talk" to address the concept of "too big to fail" and the belief by those in Congress that some form of action was necessary.

Too Big to Fail?

In the midst of highly unpopular bailouts of Wall Street, many justifications have been given about why Washington feels the need to act. Some claim that capitalism and the free market are to blame, but we have not had capitalism. If you compare our financial capital to our aggregate debt, this would be obvious. In the same way, we have not had a truly free market. The monetary manipulations of the Federal Reserve, a complex tax code, the many “oversight” agencies and their mountains of regulations show that we are far removed from a free market economy.

Another unsatisfying argument is that certain entities have to be bailed out because of their economic importance. Supposedly, some entities can be so big, so important, that no matter what they do, citizens must perpetually sustain them.

Even limited government has a basic duty to defend against force and fraud. Some argue that force is somehow permissible just because the entity engaging in it is "economically significant." But one could use this reasoning to prop up slavery. It could be deemed unfortunate but economically beneficial, and indeed these arguments have been used historically to deprive people of their liberty. But slavery should never be tolerated regardless of any economic benefit, just as systemic fraud should not be tolerated. Some banks on Wall Street should fail. Fannie and Freddie should fail. They are perpetrating fraud against the people. Yet, government insists on rewarding behavior which should instead be investigated, prosecuted, and punished.

There has been much evidence of fraud at Fannie and Freddie, but when one man, Franklin Raines, defrauded the organization out of millions of dollars through illegal accounting tricks, and ends up agreeing to pay back just a fraction, one could argue that it was well worth it to him. Fannie went on to only get more deeply involved in subprime mortgages after this investigation. Several organizations are suffering right now precisely because the free market is trying to work and punish mismanagement, if only the government would get out of the way and let it. Perhaps banks are not lending to each other because they know that complicated accounting standards, created in part to defend against confiscatory tax policy, enables false fiscal pictures to be presented, which erodes trust. But this is not a time for the government to step in with more burdensome and complicated regulations, or more foolish liquidity injections. This is a time for some banks to fail, and remaining banks to deal honestly and transparently once again. More regulations will only result in more lies.

Just as economies that turned away from slave labor had a transition period, our economy would transition as well, but in the end, if we turned to honest, sound money and a truly free market, we would end up with a more just society, founded on truthfulness and decency, not subject to the violence of force or the whims of fraudulent institutions. Unfortunately, it seems we are headed into a new era of slavery, however, where all taxpayers will be forced to render to the Fed and big banking interests the bulk of the fruits of their labor, possibly through higher taxes but definitely through the eroding force of inflation.

The Bailout Surge

In November of 2008, Congressman Paul used his "Texas Talk" address to discuss the possibility of more bailouts for the auto industry and for homeowners.

The Bailout Surge

This week the bailout of the Big Three automakers was under heavy consideration in Congress’s lame duck session. I have always opposed government bailouts of private organizations. Back in 1979 Congress had hearings about bailing out Chrysler and I was on record pointing out that these types of policies are foolish and very damaging to the long term economic health of our country. They still are.

There was also renewed pressure this week to bailout homeowners and send another round of stimulus checks to “Main Street” to balance out all the handouts to big business. It seems that eventually the entire economy is going to be blanketed over with Federal Reserve notes. Most in Washington are completely oblivious as to why this model of money creation and spending is so dangerous.

We must remember that governments do not produce anything. Their only resources come from producers in the economy through such means as inflation and taxation. The government has an obligation to be good stewards of these resources. In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones. By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use. An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned. But instead with a bailout, the rewards are reversed – the proceeds from successful entities are given to failing ones. How this is supposed to be good for our economy is beyond me.

With each bailout we hear rhetoric that this is the mother of all bailouts. This will fix the problem once and for all, and that this is absolutely necessary to avert disaster. This sense of panic squeezes astonishing amounts of dollars out of reluctant but hopeful legislators, who hate the position they are being put in, but are relieved that it will be the last time. It is never the last time, and again and again we are faced with the same scenarios and the same fears. We are already in the bailout business for such a staggering amount that admitting it was wrong in the first place would be too embarrassing. So the commitment to this course of action is only irrationally escalated, in the hopes that somehow, someway eventually it will work and those in power won’t have to admit they were wrong.

It won’t work. It can’t work. We need to cut our losses and get back on course. There is too much at stake for too many people to continue down this road. The bailouts thus far to AIG, Bear Stearns, Fannie and Freddie, and TARP funds amount to around $1.5 trillion. Considering our GDP is $14 trillion, and our Federal budget is already $3 trillion, this additional amount will significantly eat into our future lifestyles. That amounts to an extra $5,000 that every person in the country needs to somehow produce just to keep up. It is obvious to most Americans that we need to reject corporate cronyism, and allow the natural regulations and incentives of the free market to pick the winners and losers in our economy, not the whims of bureaucrats and politicians.

The Freedom to Fail

In December of 2008, Congressman Paul used his "Texas Talk" address to discuss the need for companies to be able to make their own decisions in a free economy. This includes the freedom to fail if poor decisions are made.

Economic Freedom or Socialist Intervention?

The freedom to fail is an essential part of freedom. Government- provided financial security necessitates relinquishing the very essence of freedom. Last week, the big 3 American automakers came back to Capitol Hill with their hands out to the government. Congress spent this past week debating how much money to give them and what strings should be attached. Though the bailout plan for the auto industry has suffered what I would call a temporary setback in the Senate, other avenues for public funding are being explored through the Federal Reserve and the Treasury Department. I am afraid the American auto industry will soon learn that having billions rain down from Washington will not be the blessing one might expect.

The government, after it subsidizes an industry, tends to become a very demanding benefactor. Politicians may not have any real idea about how to build a car, run a bank, educate a child, heal the sick or build a road, but they are quite adept at using carrots and sticks to manipulate and threaten those who do. Most of the federal control over education, roads, healthcare, and now banking and soon auto manufacturing, is done through money, mandates and conditions. The bailout proposal we were considering would force automobile manufacturers to submit their business plans for the approval of a new federal "car czar." This bureaucrat would have the authority to approve the automakers’ restructuring plan, monitor implementation of the plan, and even stop certain transactions he determines are inconsistent with the companies’ long-term viability.

One could argue that if billions of taxpayer dollars are going to flow into a failing industry, then representatives of those taxpayers have "bought" a say in how that industry is run – which is precisely why bailouts are such a bad idea for both the industry and the taxpayers. The federal government has neither the competence nor the Constitutional authority to tell private companies, such as automakers, how to run their businesses. I would have thought that failed experiments with central planning and government control of business that caused so much harm in the last century would have taught my colleagues the folly of making businesses obey politicians and bureaucrats instead of heeding the wishes of consumers, employees, and stockholders. But the auto industry is in danger of learning for themselves one of the oldest lessons in politics: he who pays the fiddler calls the tune.

It is not the job of government to sustain business. The government should get out of the way, and instead examine excessive regulations, tax policy and red tape that have been hostile to manufacturing in this country. We should get back on a sustainable economic course in this country, or we are doomed to collapse, as the Soviets did, under the crushing burden of big government and a strangled economy that can no longer pay for it.

Strengthening or Weakening the Economy?

In January of 2009, Congressman Paul used his "Texas Talk" address to discuss the effects of bailouts on the economy.

Strengthening or Weakening the Economy?

The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill. The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds. Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail. However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts. It should be that they are too big to bailout. The world will not come to an end without this or that bank. The most troubling thing to me is this rhetoric that only government can save the economy, and must act. This is so counter-productive.

We must ask ourselves what strengthens this country, and what weakens it.

Government is a monumental drag on this economy. Government at all levels currently absorbs about 35-40 percent of GDP, which is still not enough for its voracious appetite. While productivity is already overtaxed, the government routinely spends more than it takes in and makes up for the shortfall by constantly borrowing or debasing our dollars through inflation. It pains me to think of all the opportunities for productive economic growth we have given up simply because our government is super-sized instead of Constitution-sized. There are just a few constitutionally sanctioned activities for government to engage in, but it is so overstretched with unconstitutional encroachments that what it is legitimately supposed to do, it does very badly. And yet we are to believe the solution to our problems is to make government bigger. On the contrary, government makes our problems bigger. The central bank’s meddling with monetary policy led to overheated lending, and now massive defaults. The government used manipulative tax policy to distort the housing market which has had many unintended consequences, and here we are. Government is quick to enact and slow to correct bad policy. Yet in spite of government’s failures, it flourishes and grows, thanks to the continual bailouts from the unwitting taxpayer.

Big government has been tried and has failed miserably. What we need now is small government, and freedom. We need the freedom to pull ourselves up by our own bootstraps again, as we traditionally do in this country. But try to start a business or charity today, and you will understand how little economic freedom we really have left. Freedom, not government, made this the land of opportunity. Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world. The American people are strong and capable. We can pull ourselves out of this mess. All we need is for the nanny-state to get out of the way and allow us to do it. Freedom is our strength, government is our weakness. Only by recognizing this and unleashing our strengths will we solve the problems we face today.

Floor Speech on Bailouts and Debt

In January of 2009, Congressman Paul spoke on the House floor about the repercussions of companies living beyond their means and countries living beyond their means.

TARP Reform and Accountability Act of 2009

In January of 2009, Congressman Paul spoke on the House floor about the TARP Reform and Accountability Act of 2009.

Although I recognize the chairman of the committee's points that this literally is not the appropriation, I rise in opposition to the bill, but I do want to speak out against this whole process of what we are trying to do with the bailout, not only this time but the time before. It is a system that has brought this country to its knees, and I think we haven't recognized what the cause has been, and therefore, we're not looking at this problem in the proper manner in order to solve the problem.

There has been a lot of money involved and a lot of money spent. There have been appropriations that we've made here in the Congress as well as the trillions of dollars the Federal Reserve has used to try to bail out the financial industry, and nothing seems to be working.

I think it's mainly because we haven't recognized nor have we admitted that excessive spending can cause financial problems. Excessive debt can cause some problems. Inflation--that is, the creation of new money and credit out of thin air--can cause a lot of problems, and we've been doing it for decades. It was predictable. It was not a surprise that we got ourselves into a financial mess because of a system that is deeply flawed.

So what do we have? What have we been doing now for the last 6 months to a year?

We have been spending more. We have been running up debt like we've never run up debt before, and we're printing money like we never have before. We think that is going to solve the problem. That literally has been the cause: too much spending, too much borrowing and too much inflation.

I do want to address the subject more specifically about moral hazard and why the system was so deeply flawed. That is, when a Federal Reserve system and a central bank create easy money and easy credit and they have interest rates lower than they should be, businesspeople do the wrong things. They make mistakes. It's called malinvestments, and we've been doing it for a long time. It causes financial bubbles, and they have to be corrected.

Actually, the recession is therapy for all of the mistakes, but the mistakes come, basically, from a Federal Reserve system that's causing too many people to make mistakes. It causes savers to make mistakes. Interest rates are lower than they should be, so they don't save. In capitalism, capital comes from savings, but for decades now, capital has come from the printing press, and nobody has saved.

That contributes to what we call ``moral hazard'' as well as the system of the Fannie Mae and Freddie Mac system. It always had a line of credit. It never had to use it, but the assumption was, if we ever got into any trouble, the Treasury would be there, and the Federal Reserve would back them up. That existed for a long time, causing specifically the housing bubble to develop.

Then we subsidized the insurance. The government-subsidized insurance program further promoted the principle of moral hazard--people doing things, spending money and investing in the incorrect way.

Then with the assumption that we're all going to be bailed out, which we're endorsing by bailing everybody out, people say, ``Well, no sweat because, if there is a mistake, the government will come to our rescue.'' That's part of the system of the FDIC. Now, nobody can conceive of the notion that we could live without an FDIC, but the truth is that a private FDIC would never permit this massive malinvestment. There would be regulations done in the marketplace, and there would not be this distortion that we've ended up with.

So this bill actually makes it permanent that the insurance will be $250,000 per depositor. Now you say, on the short run, that's pretty good because that conveys confidence to the system because at least we know that our deposits are secure. This is true. It helps in the short run, and generally, this is the way we work here. We always say, On the short run, this is going to be a benefit. On the short run, the bailout will help. On the short run, we will do ``this.'' Actually, on the short run, there is a great deal of harm that's done. As a matter of fact, today, the long run is here.

Bankruptcy is the Best Economic Stimulus

In March of 2009, Congressman Paul used his "Texas Talk" to address his belief that allowing failing companies to declare bankruptcy instead of bailing them out would be the best economic stimulus.

Bankruptcy is Economic Stimulus

The distraction on Capitol Hill this week has to do with the jackpot bonuses that executives at AIG recently received. The argument is over a relative drop in the bucket. The total amount of bonuses given out was $165 million. The government has put $170 billion into AIG so far. Many now are demanding we get this money back. We ought to be spending our time and effort doing something more worthwhile, like figuring out how the Federal Reserve is handling the trillions of dollars they are creating and pumping into the economy, and how that is affecting the purchasing power of dollars in your pocket.

The big mistake was appropriating the TARP funds in the first place. A Johnny-come-lately bill of attainder won’t stop the spending epidemic. This whole situation is a perfect demonstration of why “doing nothing” and letting failing companies fail would have been much better than sinking valuable money and resources into them.

When a company makes a profit, it is a signal that it is taking resources and increasing their value while controlling costs. When a company operates at a loss, it is a signal that it is decreasing the value of its resources or letting out-of-control costs outstrip any value it has created. A company operating at a loss is therefore an engine of wealth destruction. Bankruptcies are a net positive for the economy because more productive competitors are rewarded by opportunities to buy up remaining assets at bargain prices to strengthen their operations. In an economy that allows this kind of growth and change, any jobs lost by bankruptcy are soon replaced by new ones as the most efficiently managed businesses gain access to more assets and expand.

Bankruptcy was the stimulus that we needed in the case of AIG. More bankruptcies would clean out malinvested resources and enable economic growth again.

AIG, by losing money and maneuvering their operations to the brink of bankruptcy, was telling us that they were inefficient. So what did we do? We forced the taxpayer to assume the losses, and now we are supposed to be shocked that it is not working out. Had AIG gone bankrupt, it would have been impossible to hand out these bonuses. The taxpayer would have been fleeced for $170 billion less last year. Had they gone bankrupt, the world would not have come to an end, it would just continue on with one less engine of wealth destruction.

We should have learned from Japan. The 1990’s is referred to as Japan’s “lost decade” because of the zombie banks kept on life support by the Japanese government. Any productivity was redirected through these engines of wealth destruction, resulting in long term stagnation. We should and can avoid this outcome if we come to our senses.

A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves.
 

The Western Debate

In October of 2011, Congressman Paul participated in the Western Debate in Las Vegas. He was asked about the TARP program and stated that the idea that the program was OK, but that it was mismanaged by the government. He stated that there was nothing that the government can run properly.

 COOPER: And then we'll go to Governor Romney.

PAUL: Yes, the argument is it's -- the program was OK, but it was mismanaged. But I work on the assumption that government's not very capable of managing almost anything...

(APPLAUSE)

... so you shouldn't put that much trust in the government. You have -- you have to trust the marketplace. And when the government gets involved, they have to deal with fraud. And how many people have gone to jail either in the government, Fannie Mae or Freddie Mac, that participated in this? And nobody suffers the consequences. All these investigations, and yet the people who lose their jobs and lose their houses, it's their fault, according -- that's why they're on Wall Street. And we can't blame them. We have to blame the business cycle...

COOPER: Time.

PAUL: ... and the economic policies that led to this disaster.

(APPLAUSE)

Voting Record

Emergency Economic Stabilization Act

In October of 2008, the House passed the Emergency Economic Stabilization Act of 2008. Support and opposition to the legislation were both bipartisan. Ron Paul voted against the Emergency Economic Stabilization Act, which created the Troubled Asset Relief Program (TARP).

Emergency Economic Stabilization Act

In September of 2008, the House made an attempt to pass an initial version of the Emergency Economic Stabilization Act of 2008. The attempt failed 205-228. Ron Paul voted against the initial passage of the Emergency Economic Stabilization Act.

Sponsored and Cosponsored Legislation

This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.

Michele Bachmann

Summary

Congresswoman Bachmann has opposed the TARP program from it's inception, and voted against the Emergency Economic Stabilization Act of 2008, which created the TARP program. With the initial collapse of Bear-Stearns and the panic which ensued afterwards, Congresswoman Bachmann called for calm, and mocked the repeated assertions of "too big to fail." 

As it became obvious that a government program would be created to address the financial crisis, Congresswoman Bachmann stated that Congress was being told that the consequences of inaction or even of deliberative action would be severe; but that the consequences of hasty action were just as dire. She noted that Secretary Paulson is asking taxpayers to pony-up $700 billion to buy Wall Street’s debt without a vote by the American people. She stated that shareholders in companies that receive government funds should not make a profit off those funds, and referred to the taxpayers as the "forgotten man."

As the TARP program came into focus, Congresswoman Bachmann noted that the US people had been told numerous times that financial commitments to Bear-Stearns, AIG, and Fannie-Mae and Freddie-Mac would solve the problems and each time more bailouts were requested. She stated that the bailouts should stop and that Fannie and Freddie should be placed into receivership.

Just before the initial vote on the EESA, Congresswoman Bachmann noted that if a lack of credit was the problem in the economy, suspending mark to market rules and other items would have a larger and better effect than the infusion of cash. When the vote initially failed in the House, Congresswoman Bachmann stated that the plan was rushed, unworkable, and short-sighted.

When President Bush and President-Elect Obama asked for the second half TARP, Congresswoman Bachmann again stated that the measure was rushed and done without proper consideration. She stated that Congress was committing the next generation to servitude in passing the legislation.

When President Obama had the stock purchased with TARP changed from preferred to common stock, Congresswoman Bachmann noted the illegality of the move and cited it as further evidence that the program was out of control.

In the time that followed, Congresswoman Bachmann was highly critical of the implementation of the TARP program, oversight of the program, and cost of the program. She repeatedly called for ending the program and returning any remaining funds to pay down the debt.

Reaction to Bear-Stearns Bailout

In July of 2008, Congresswoman Bachmann appeared on Bloomberg and discussed the federal reserve bailout of Bear-Stearns.

Response to Proposals

In September of 2008, Congresswoman Bachmann released a statement noting her opposition to any proposals to bail out banks using US money.

Bachmann Statement on the Federal Government's Financial Market Bail-Outs
Congress Should Not Adjourn Without Fully Analyzing the Consequences of its Actions

Washington, D.C., Sep 19, 2008 - Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, made the following statement in response to the federal government’s expected proposal to further bail-out troubled financial institutions:

“Right now there are a whole lot more questions than answers. Number one amongst them: Exactly how much taxpayer money are we talking about? I have been told this could be somewhere in the realm of half a trillion dollars. Add to that the $900 billion of tax dollars we have already obligated for the purchase of Bear Stearns, Fannie Mae, Freddie Mac, and AIG. Every American family is already on the hook for a half a million dollars to pay projected long-term net liabilities for entitlement spending. Where does it end?

“This matter is far too serious and has far too significant consequences for our economy to push through Congress with anything less than full consideration. Congress, Treasury and the Fed aren’t playing with Monopoly money. Real people’s futures are at stake; yet we’re planning to act without thorough analysis – or, frankly, hardly any analysis at all. This worries me; but what worries me more is that Democrat leadership doesn’t appear worried enough.

“At present, reports are that this proposal that doesn’t even exist yet will bypass the Committee process and be sent directly to the House floor next week. Democrats have announced their plan to have the proposal signed into law before the election. Our target adjournment date is an artificial deadline, yet Democrat leadership is fully prepared to push this estimated half-trillion-dollar package through based on that deadline.

“We clearly have a full plate of work ahead of us with the financial markets crisis, not to mention our energy crisis. Congress should not even consider adjournment without a long, hard look at this issue and a full analysis of the consequences of its actions. Our job is to do the people’s work.

“I understand the financial crisis we are facing and I fully comprehend the consequences of inaction. But, if history has taught us anything it’s that any time Congress or federal regulators react too quickly, they gloss over details, there are unintended consequences, and we end up having to pick up the pieces of a new problem created as a result of hasty action.”

Fox News Appearance

In September of 2008, Congresswoman Bachmann appeared on Fox Business and spoke about her opposition to the continuing bailouts.

Opposition to Bailout Plan

In September of 2008, Congresswoman Bachmann released a statement noting her opposition to a possible bailout of the banks by the government.

Bachmann Defends the American Taxpayer
Treasury Bail-out Puts Today and Tomorrow's Taxpayers on the Hook

Washington, D.C., Sep 23, 2008 -

Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, made the following statement as the Republican Study Committee (RSC) provided an alternative to the proposed Treasury Department bailout which would put our nation’s taxpayers on the hook for nearly a trillion dollars:

"We're told that the consequences of inaction or even of deliberative action will be severe; but the consequences of hasty action are just as dire. Secretary Paulson is asking taxpayers to pony-up an astonishing $700 billion – on top of the existing bailouts – to buy Wall Street’s debt. We're talking about at least $1.5 trillion -- that doesn't just impact a fiscal year; it impacts generations of prosperity.

"Meanwhile, here on Capitol Hill, Democrat leadership is already posturing to add its own pet projects to the bailout. Congress is preparing to rush this legislation through – partly out of panic, partly out of politics -- without exercising its own fiduciary responsibilities to the American people.

"As we consider this proposal, we should ensure that shareholders do not make a dime of profit from taxpayer money. We should ensure that government spending is cut or frozen to pay for the added taxpayer burden. We should above all ensure that we take whatever means are necessary to make this bailout the last.

“The forgotten man in all this is the everyday American taxpayer -- both of today and of tomorrow. It is with them in mind that Congress should fully focus on its responsibilities and not rush the process just to meet the artificial deadline of Congressional adjournment.

“The proposal that my colleagues and I from the Republican Study Committee (RSC) are making today not only looks at the problem as it’s occurring now but it also looks to ensure that we will not be facing this same issue over and over again in the future. We must not just address the symptoms, but also the root causes of the problem.”

Fox News Appearance

In September of 2008, Congresswoman Bachmann appeared on Fox News and spoke about her opposition to the TARP legislation. She noted the unprecedented amount of power obtained by the Treasury Secretary on the economy and on deciding who fails and who survives. She asserted that cutting taxes in business would allow companies to create jobs and grow the economy and the reduced tax burden may help companies survive.

Financial Services Hearing

In September of 2008, Congresswoman Bachmann released a statement noting a speech she made in Committee on possible solutions to the emerging crisis.

Bachmann Statement for House Financial Services Committee Hearing
"The Future of Financial Services: Exploring Solutions for the Market Crisis"

Washington, D.C., Sep 24, 2008 -

U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, prepared the following statement for the record for today’s hearing of the House Financial Services Committee on "The Future Financial Services: Exploring Solutions for the Market Crisis." It expresses her serious concerns about the proposed Treasury bailout which would put America’s taxpayers on the hook for hundreds of billions of dollars. She will also participate in questioning Treasury Secretary Paulson and Fed Chairman Bernanke at the hearing.

“We’re told that the consequences of inaction or even of deliberative action will be severe; but I am concerned that the consequences of hasty action are just as dire. The greatest question facing us is: How does this plan protect taxpayers -- both today's and tomorrow's?

“I have had hundreds of constituents call my office over the last two days asking this question. They all express skepticism for this plan. They all remain unconvinced, as I do, that they will get much bang for their buck. And, they remain petrified of the historic precedent Congress and the Administration are setting for the next time our markets face instability.

“Secretary Paulson continues to say that this proposal is the best protection for taxpayers because the consequences of not implementing it are worse. Of course, he said that when we bailed out Fannie Mae and Freddie Mac. And, he said that when Bear Stearns failed. And, then when AIG needed to be bailed out. Where does it end? On every occasion, one after another, they have failed to provide the market confidence that was promised.

“And, what's more, if it is true this time, then I submit that the next question is: Will it work? Secretary Paulson, Chairman Bernanke and Chairman Cox have not given us any real assurances that it will. In fact, when pressed for more details about whether it will work and how it will be implemented at yesterday’s Senate Hearing, all continued to answer in vague terms.

“They are all smart men. They are all well versed in economic policies. One would hope they have already thought about logistics. One would hope that they are not just making a guesstimate with the American people's money or taking a gamble with our children's future.

“The American people want to know more details and Congress ought to demand those details. There is absolutely no excuse for our not giving this matter our full attention and complete contemplation. There's no doubt that this is a complicated matter and if it takes us time to understand all the implications of our actions than it is time well spent. We should not rush to take action in a week when the consequences could last lifetimes.

“First of all, the American people want to know what will be the first move the Secretary will make with the $700 billion. Once he has his check from the American people, what will he do next?

“Yesterday, he answered that he will gather a group of “experts” together to decide which assets the government will buy and at what price. How will they actually pick these assets?

“And, how can we be assured these people will come up with the right price for the taxpayers and the financial institutions? If government buys an asset for too much, the taxpayer loses. If it buys it for too little, the market problem may not get solved. How do we mitigate this risk?

“Most anyone that might be considered an “expert” may have a substantive financial interest in getting this proposal passed without a second glance. Will we be entrusting to make decisions on what assets to buy the very same people Congress is bailing out?

“Let us not forget that much of what Wall Street does is an art and not a science. And, let us also not forget that it was the so-called experts, the well-paid, well-schooled, high-powered financial gurus who made the bad decisions that got us in this mess in the first place.

“And unfortunately, this plan appears to be going from bad to worse. The Democrat Leadership is piling on its own pet projects to the bailout. Secretary Paulson presented the Committee with a two-page draft bill on Sunday. Three days later, we are discussing a draft bill that’s reached 42 pages. Congress is preparing to rush this legislation through – partly out of panic, partly out of politics – without exercising its own fiduciary responsibilities to the American people.

“We appear to have suddenly lost faith in the free markets. And, we are ignoring the signs of free market leadership in the wake of this crisis. Warren Buffett just yesterday infused Goldman Sachs with $5 billion. Barclays bought Lehman Brothers.

“Wells Fargo Chairman Dick Kovacevich said last weekend at a meeting of the Association of Corporate Growth, "Given the financial conditions today, I feel like a kid in a candy store." There are companies out there that didn't go too far out on a limb with some of the riskier investments that have liquid capital and can be part of the solution. But, Congress and the Administration are focusing like a laser on government intervention.

“My colleagues and I from the Republican Study Committee (RSC) have suggested a proposal that not only looks at the problem as it’s occurring now but it also looks to ensure that we will not be facing this same issue over and over again in the future.

“It reduces corporate and capital gains taxes to unleash private capital into American businesses, create more jobs, and give people more freedom to make investment decisions with dollars currently hoarded by the federal government.

“It would suspend mark-to-market accounting, allowing companies to more accurately report the true value of their assets on their balance sheets.

“It breaks up Fannie Mae and Freddie Mac -- who are, after all, at the heart of all of this -- so that the encumbered taxpayer no longer backs them -- implicitly or explicitly -- and so that they do not artificially grow larger than the market will allow.

“And, it ensures the Federal Reserve’s attention is focused on that of long-term price stability rather than short term economic growth.

“We must not just address the symptoms, but also the root causes of the problem. The forgotten man in all this is the everyday American taxpayer -- both of today and of tomorrow. It is with them in mind that Congress should fully focus on its responsibilities and not rush the process just to meet the artificial deadline of Congressional adjournment.”

Floor Speech on Bailout

In September of 2008, Congresswoman Bachmann spoke on the House floor about the initial bailout legislation's failure to change mark to market rules. A few days later, she spoke on the floor to reiterate her belief that neither she, nor the American public was convinced that the actions prescribed in the legislation were necessary.

Mrs. BACHMANN. I thank the gentleman for yielding.

I also want to thank the Speaker of the House for making the case why so many Republicans are unwilling at this point to sign on to this legislation that's before us. However, I do believe also, Madam Speaker, that Democrats and Republicans are both committed to finding a way out of this financial challenge, and we think we have one. But the answer we believe needn't cost taxpayers $700 billion.

The problem is a lack of credit for creditworthy people, people who are fully capable of paying that credit back. Why is there a lack of credit? It's because the SEC has mandated accounting rules that have forced banks to value assets well below their actual economic value.

So what does this mean? It means that if a bank has $1 worth of deposits, they can make $10 in loans. But if accounting rules are forcing banks to devalue assets, $500 billion, then that means that banks are prohibited from making $5 trillion worth of loans. And that's why we have a credit crunch.

Unfortunately, the bill that we have before us today doesn't even address this credit crisis.

Let's first direct the SEC to suspend mark-to-market accounting rules for assets for which there is no market. That only makes sense. Second, stop naked short selling. Then the FDIC can issue net asset certificates that saved banks during the S&L crisis and the FDIC can write a letter to United States banks telling them in the absence of fraud that the FDIC will fully back all deposits for first-tier creditors.

Let's try these practical solutions before we pull the trigger on a $700 billion bailout that doesn't even address the underlying program.

Today, Madam Speaker, Republicans and Democrats agree. It's time for a rest. It's time for a break. Let's embrace a practical solution before we tie a $700 billion bailout around the neck of the American people.

Mrs. BACHMANN. Madam Speaker, over the weekend Secretary Paulson asked taxpayers to pony up an astonishing $700 billion to buy financial services sector debt on top of the existing bailouts that are already implemented this year. All told, that amounts to an astonishing $1.5 trillion.

Spending at this proportion doesn't just impact a fiscal year, it will impact generations of prosperity. We are told that the consequences of inaction, even of deliberative action, will be severe, but I am concerned that the consequences of hasty action could be just as dire. I have had hundreds of constituents call my office, as have my colleagues, over the last 2 days, asking this question. They are all expressing skepticism for this plan.

They remain unconvinced, as I remain unconvinced, that they will get much result for their investment. We should not be in the habit of writing blank checks. We should not rush to take action in a week when the consequences could last several lifetimes, because the forgotten man in all of this is the everyday American taxpayer.

It's with them in mind that we should fully focus on our responsibilities and not rush to judgment because of an artificial deadline.  

Response to Initial TARP Failure

In September of 2008, Congresswoman Bachmann released a statement noting her response to the initial failure of the TARP legislation to pass the House.

Bachmann Statement on the Failure of the Bailout Bill

Washington, D.C., Sep 29, 2008 -

Today, Congresswoman Michele Bachmann made the following statement after voting against the proposed $700 billion dollar bailout of financial institutions, which failed to pass 205-228.

"Today marks an historic moment for America as a solid bipartisan majority of Congress rejected the fatally flawed Paulson Plan. Standing shoulder to shoulder with taxpayers, we declared that we can do better.

"As I’ve stated previously, this plan was rushed, unworkable, and short-sighted. A majority of House Republicans have parted ways with President Bush on this plan and we demand that alternative proposals be put on the table. There is universal agreement that this plan was bad, but its supporters claimed it was the only option. There were alternatives available, but Speaker Pelosi and the Administration chose to ignore them and used every parliamentary trick in the book to stifle debate. Now, they will have to listen to the voices of American taxpayers who refuse to open their checkbooks to Wall Street to write a $700 billion check with no strings attached.

"I support a plan that would have Wall Street bail itself out, not hardworking taxpayers, by requiring institutions to insure troublesome assets that are causing today’s credit crunch. It would suspend mark-to-market accounting, which forces companies to take losses on artificially devalued assets on an artificial timetable, to give investors more confidence.

"The plan I support would break up Fannie Mae and Freddie Mac -- government sponsored enterprises that are at the heart of this crisis -- so that the encumbered taxpayer no longer backs them -- implicitly or explicitly -- and so that they do not artificially grow larger than the market will allow. We cannot pass legislation that sets America up for a Groundhog Day reprise of this mess and that means changing the problem at its core - the GSEs.

"Furthermore, the plan I support suspends capital-punishing tax rates to bring more capital into the U.S. markets rather than our foreign competitors. And, the plan ensures the Federal Reserve’s attention is focused on long-term price stability rather than short term economic growth. Finally, it requires the US Treasury to write rules keeping executives who made the risky decisions from personally profiting from them with excessive compensation or golden parachutes all at the expense of taxpayers. We can't have a market that only condones risky behavior. The balance between risk and reward is an important part of the free market.

"My colleagues and I stand ready and willing to negotiate with any parties on a plan that will help stabilize our financial markets and relieve the liquidity crisis without exposing taxpayers to a $700 billion bailout debacle."

Second Rejection of Paulson Plan

In October of 2008, Congresswoman Bachmann released a statement noting her continued opposition to the Paulson plan.

Bachmann Again Rejects Paulson Plan
Backs Alternate Measures to Protect Taxpayers With Market Reforms

Washington, D.C., Oct 3, 2008 - Today Congresswoman Michele Bachmann (MN-06) released the following statement after voting against the Senate version of the bailout package:

"Speaker Pelosi and the Bush Administration crafted this short-sighted bailout, taking a risky gamble with$700 billion in taxpayer dollars. There were no substantive changes made to the Paulson Plan that was rejected by a bipartisan majority of the House, 205 – 228, on Monday. I am disappointed that Congress did not use its second chance to fix this bill and do the right thing for both American taxpayers and our financial markets.

"Congress could have passed a better bill that did not expose taxpayers to such serious risks, would not have set us up for extraordinary future debt, and would help the nation weather this crisis while minimizing impact on Main Street America. It could have injected capital into our marketplace by suspending capital gains taxes and making targeted tax cuts for companies who invest in America, not foreign countries. It could have given value to troublesome assets by insuring them, rather than purchasing them on the backs of taxpayers, thus rejuvenating confidence our markets so desperately need. It could have included real, strong provisions to direct the Securities and Exchange Commission (SEC) to suspend mark to market accounting standards that force companies to take losses on artificially devalued assets on an artificial timetable. And, it could have reformed the mortgage giants Fannie Mae and Freddie Mac so that taxpayers do not continue to fuel their risky, unrestrained growth. Our financial market instability, after all, can be traced right back to their ill-advised behavior and failure to address that root cause will likely lead us right back to this point again in the future.

"We have no real assurances that the Paulson Plan will work. We have no real safeguards that the taxpayers will be paid back. And, we have set the dangerous precedent that government will swoop in and wipe away Wall Street’s worst decisions the next time it asks.

"I fear the Congress and the President have done a great disservice to the American people today and have set this country on a deliberate path away from the free market principles upon which our nation was founded. As Secretary Paulson and his successor, whoever that may be, implement this giant taxpayer backstop throughout our financial markets, taxpayers can only cross their fingers that the enormous gamble Speaker Pelosi and President Bush took today will truly pay off in the long run."

Demand for Testimony

In October of 2008, Congresswoman Bachmann released a statement noting a letter she sent to Banking Chairman Frank to require testimony from those accountable for the financial crisis.

Bachmann Demands Those Accountable for the Financial Markets Meltdown Come Before Congress

Washington, D.C., Oct 15, 2008 -

Yesterday, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, joined several of her colleagues in sending a letter to Chairman Barney Frank demanding he bring the former executives of Fannie Mae and Freddie Mac before the Committee to answer to the American people. The Members also urged Chairman Frank to hold a hearing to examine the current allegations of voter fraud by the Association of Community Organizations for Reform Now (ACORN), an organization recently funded through the housing bill passed in July.

“Protecting our nation’s taxpayers is my top priority,” stated Rep. Bachmann. “It is time that these hardworking people get answers to their questions about the current financial services sector meltdown. America's middle class is struggling to make ends meet and the risky actions of Wall Street’s elite have made that job that much harder for them. There's little doubt that Fannie Mae and Freddie Mac are at the core of our current problems. Their former executives need to answer for their actions in a Congressional hearing.

“The American people also deserve a fair election without special interest buy-outs or fraud,” concluded Bachmann. “Congress made the people fund ACORN and now that group is under the microscope all across the nation for questionable activities related to the election. Congress owes it to these hardworking taxpayers to thoroughly examine the actions of ACORN.”

Bachmann also urged Attorney General Michael Mukasey to open a Department of Justice investigation of ACORN last month when it was accused of voter fraud and misusing taxpayer funds.

Below is a copy of the letter:

Dear Chairman Frank:

As we talk with constituents in our districts, one question we hear repeatedly is "How do we restore confidence in our government’s handling of the economy?" Obviously, the urgent necessity is that we must address the underlying economic uncertainties and unfreezing the credit markets. It is also imperative, however, that we answer our constituents’ questions about the competence and integrity of their government.

You have scheduled a hearing on October 21 on restructuring and reform of the financial system. To answer the questions asked by our constituents, we request you include in this hearing former executives of Fannie Mae and Freddie Mac as well as representatives from their regulator, who should be asked to explain why Fannie and Freddie rapidly expanded their purchasing and securitization of subprime mortgages from 2005-2007. As the largest participants in the housing finance system, the role of Fannie and Freddie in the current economic crisis must be understood from the beginning as we move to develop reforms.

We also request that you schedule immediate hearings in our Committee on the Association of Community Organizations for Reform Now (ACORN) and their alleged abuses of taxpayer dollars including the funding of fraudulent voter registration drives.

Recent press accounts have listed allegations of voter registration fraud in Ohio, Nevada and Florida among others. Given the reliance of ACORN on millions of dollars of federal funding from the housing GSEs and grants from the Department of Housing and Urban Development (HUD), it is imperative that the Financial Services Committee use its oversight authority to determine the accuracy of these reports.

Until we examine all the elements that caused the financial meltdown, it will be difficult to determine how to move forward and reform our regulatory structure. The inclusion of Fannie Mae and Freddie Mac in the hearing on October 21st and subsequent hearings on ACORN are essential to the Committee’s work on reforms of the financial regulatory system.
Thank you for your consideration of these requests.

Transparency in the Markets

In October of 2008, Congresswoman Bachmann released a statement calling for more transparency in the financial markets.

Bachmann Calls for More Transparency in the Financial Markets

Washington, D.C., Oct 17, 2008 -

This week, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, joined several of her colleagues in writing Director of the Federal Housing Finance Agency (FHFA), James Lockhart, to urge increased transparency in the financial markets, and specifically into the recent decision-making of Fannie Mae and Freddie Mac.

“For years, many of us have called for reforms at Fannie Mae and Freddie Mac. But it has become increasingly clear and obvious to all that the GSEs need to be restructured in any long-term strategy for our financial markets. These entities became too large and far too undercapitalized and we must know how and why to ensure we don't repeat this behavior. Due to their risky decisions and lack of moral compass, our nation’s taxpayers have been forced to foot an outrageous bill. The American people simply cannot afford another bailout.

“It is imperative that Director Lockhart provide the appropriate documentation of recent actions taken by Fannie and Freddie. It's time the implicit guarantee work for the taxpayers -- if they're going to be forced to foot the bill for these mortgage monsters, they have the right to answers about how we got here. Congress owes it to our nation’s taxpayers to investigate this matter. There are too many unanswered questions that can no longer be ignored.

“Confidence in the financial markets must be restored. I strongly believe this will not happen until we have complete transparency of the GSEs. The American people are angry and frustrated with the irresponsible decisions of Wall Street and Washington. It’s only right that Fannie and Freddie provide them with answers.”

A copy of the letter is below:

Dear Mr. Lockhart:

We write to call for the need for increased transparency in the financial dealings and decision making by Fannie Mae and Freddie Mac. As our nation faces challenging economic times, and both Congress and the American people are struggling to understand the true reasons behind them, we feel that providing open access to the documents and financial paperwork of these two massive organizations would go far towards helping us not only understand what failed, but also make the necessary changes to prevent us from going down this road again.

We applaud the Office of Federal Housing Enterprise Oversight (OFEHO), FHFA’s predecessor agency, for sounding the alarm bell regarding these two institutions many years ago, especially under your predecessor Armando Falcon, Jr. In response to these reports, we were proud to work as Republicans in 2005 to advocate for significant reforms and oversight to Fannie and Freddie. Unfortunately, these efforts were blocked, allowing the bad financial practices at these two institutions to continue.

The alarm bell was sounded once again in 2006 by former Senator Warren Rudman. Both OFEHO and Senator Rudman concluded that Fannie specifically had willfully disregarded accounting rules and had manipulated its earnings to meet Wall Street expectations. We the Congress and the American people deserve to know more about the misdeeds and potentially illegal conduct by the management of Fannie and Freddie.

As such, we request that you, as the regulator and current conservator for both Fannie and Freddie, take steps to release all documents related to their operations, especially their financial decision making, contacts with government officials, and campaign donation strategies. This will serve as a major first step towards allowing not only Congressional investigators, but also financial experts and the public at large to understand what steps were taken by Fannie and Freddie that led us down this path. Additionally, and probably more importantly, it will allow all Americans to offer up suggestions as to the steps that Congress and the financial regulatory community, including OFEHO, need to take to prevent the misdeeds of Fannie and Freddie from ever occurring again.

Before their collapse into conservatorship, Fannie and Freddie held some $5.4 trillion in mortgage backed securities and debt between them. They played a major role in setting the stage for the credit crisis facing not only our financial markets but our small businesses and communities. It is only right that the American people have access to one of the roots behind today’s crisis.

Financial System Reform

In October of 2008, Congresswoman Bachmann released a statement noting her opinion on reforming the financial system.

Bachmann Committee Statement on Reform of the Financial System

Washington, D.C., Oct 21, 2008 -

Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, submitted the following statement for the House Financial Services Committee Hearing on “Regulatory Restructuring and Reform of the Financial System":

“As we all know, America has experienced incredible turmoil in its financial markets over the last six months. It is important that we quickly review the history of how we got here.

“Lenders made risky loans to less creditworthy borrowers with Congress’ encouragement and with the confidence of Fannie Mae and Freddie Mac’s taxpayer-guaranteed shoulders to lean on. Investors in the secondary mortgage market made risky, overconfident decisions to fuel this behavior and purchased mortgage-backed securities they believed were backed by the U.S. taxpayer, again through Fannie and Freddie. Senior executives at Fannie and Freddie continued to push for larger portfolios, and thus more risk for the taxpayers, and Congress did nothing to slow the growth of these government sponsored enterprises (GSEs). In fact, Congress encouraged further growth.

“As a result, the American taxpayer bailed out bad decision-makers from all parties to the tune of more than a trillion dollars: $29 billion for Bear Stearns, $200 billion for Fannie and Freddie, $300 billion to expand the Federal Housing Administration (FHA), $85 billion for AIG, and of course, $700 billion for the giant Paulson Plan -- plus $110 billion in sweeteners to pass that plan.

“Congress could have taken steps before the September adjournment to make sure both American taxpayers and the integrity of our financial markets would be protected in the future. Rather than taking a mere short term glance at today’s market problems, it could have stayed in town a bit longer and hashed out more long-term solutions to these issues. It is unfortunate that this was not accomplished.

“Our Committee must move forward and take a serious look at where to go from here. And the first place we should look is at the heart of this debacle: Fannie Mae and Freddie Mac. Fannie and Freddie must be reformed so that taxpayers do not continue to fuel their risky, unrestrained growth. Congress’s failure to address that root cause will likely lead us right back to this point again in the future.

“Our Committee should consider proposals like the Government Sponsored Enterprises Free Market Reform Act, introduced by our colleague, Rep. Jeb Hensarling. This legislation would put Fannie and Freddie on the road to becoming free market, healthy competitors in the secondary mortgage market instead of the government-run, taxpayer-backed giants they are today.

“Our Committee should also exercise its oversight authority to shed light on the management decisions made by former executives who were in charge of Fannie and Freddie during this period of unrestrained growth. The American people deserve to have full transparency about their decisions which have burdened taxpayers by the trillions.

“Mr. Chairman, I hope you will reconsider our request, led by Ranking Member Bachus, to hold Committee hearings that examine why Fannie and Freddie rapidly expanded their purchasing and securitization of subprime mortgages from 2005-2007. We should hold former executives of the GSEs accountable and ask them the same questions our constituents are asking us about their management practices.”

Fox News Appearance

After the passage of TARP, Congresswoman Bachmann appeared on Fox News and spoke about the legislation. She noted that the American people would not tolerate an additional bailout after TARP. She noted that although businesses were in decent shape, the fear generated by the financial crisis was adding to the problem.

Financial Services Hearing

In November of 2008, Congresswoman Bachmann released a press statement noting a speech at the financial services hearing.

Bachmann Critical of New Bailout Strategy
Statement For Financial Services Hearing

Washington, D.C., Nov 18, 2008 -

Congresswoman Michele Bachmann (MN-06), a member of the House Financial Services Committee, prepared the following statement for the today’s hearing of the House Financial Services Committee on the implementation of Treasury’s Troubled Asset Relief Program (TARP). Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernanke both testified at the hearing.

Bachmann, who opposed the financial bailout, criticizes TARP approach to the current financial crisis and raised questions about the implementation of Paulsen’s newest strategy.

“Thank you, Mr. Chairman, for convening this important hearing regarding the implementation of the Troubled Asset Relief Program (TARP). I appreciate Secretary Paulson, Chairman Bernanke, and Chairman Bair coming before our Committee today to discuss the progress of TARP, the significant changes recently announced to the underlying program and what plans are in store to begin to stabilize our financial markets.

“As someone who voted against the $700 billion bailout in October, I continue to have serious reservations about the TARP and continue to believe that it is not the appropriate solution to stabilizing America’s financial markets and easing the nation’s credit crunch.

“We were told that the primary function of the TARP would be to buy up toxic assets in the marketplace under the premise that companies would gain relief on their balance sheets, investors’ confidence would be restored and our markets would be rejuvenated. We were rushed to pass far-reaching legislation that gave the Secretary of the Treasury tremendous power over our financial services sector. And, we were told that making capital infusions in financial institutions was not the best course of action. Yet today, our markets remain volatile and what was once an asset purchase program is almost entirely a capital injection program.

“I am pleased that the government will no longer pursue a haphazard quest to purchase troublesome mortgage-backed securities on the taxpayers’ tab -- a task I never thought our government could handle sufficiently and one that would surely be unsuccessful over the long run. From conflict of interest concerns to the long history of proof that government is inherently unable to execute such complex matters, I was unconvinced that this approach would work. It appears that the Treasury Department now agrees.

“However, this rapid change of course only raises more questions. Though I understand that policymakers must be flexible at times to maximize end results, the more questions government sends into the marketplace, the longer it will take to reach recovery. Our financial system is desperate for signs of certainty, but the Treasury Department’s implementation of TARP has been far from clear and consistent. I am hopeful that this hearing will serve to answer many of the questions we all still hold about the direction of the TARP.

“I am also interested in hearing about the panelists’ plans to implement the insurance program that was established in the Emergency Economic Stabilization Act. Intended to give value to troublesome assets by insuring them, rather than purchasing them on the backs of taxpayers, this part of the plan was something many of us could agree on but it has yet to be implemented. I look forward to hearing your comments about this issue.

“Thank you, Mr. Chairman, and I yield back the balance of my time.”

Call for More Oversight

In October of 2008, Congresswoman Bachmann released a press statement noting a letter sent to Senate Majority Leader Reiad calling for more oversight of the bailout.

Bachmann Calls for Oversight of the Wall Street Bailout
Works to Protect the American Taxpayer

Washington, D.C., Nov 20, 2008 - U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, recently joined several of her Republican colleagues in calling for Speaker Nancy Pelosi and Majority Leader Harry Reid to hold true to their commitment and move forward with the important oversight responsibilities for the $700 billion Wall Street bailout, as laid out in the Emergency Economic Stabilization Act of 2008. Their letter to Congressional leadership comes in the wake of comments by the Treasury Department’s Inspector General, Eric Thorson, about how none of the oversight actions have been executed. As he stated, “I don’t think anyone understands right now how we’re going to do proper oversight of this thing.”

“The American taxpayers have seen their hard-earned money and their future prosperity mortgaged away to government bailouts,” stated Bachmann, who voted against the massive bailout bill last month. “The least Washington can do is to ensure that the oversight process for how this money is spend is open and transparent. As of today, the oversight hasn’t even begun. The forgotten man in this process has all along been the taxpayer -- both of today and of tomorrow. It is with them in mind that Congress should fully focus on its responsibilities and work to uphold its commitments established in the Emergency Economic Stabilization Act of 2008.”

Note: The text of the letter is below:

Dear Speaker Pelosi and Majority Leader Reid:

When the Emergency Economic Stabilization Act of 2008 was approved by Congress and subsequently signed into law, lawmakers were assured that the funds would be used to purchase troubled assets weighing down the financial sector and include the strictest of oversight provisions. In the preface to its passage, Speaker Pelosi indicated that “this legislation must contain independent and ongoing oversight to ensure that the recovery program is managed with full transparency and strict accountability.” Majority Leader Steny Hoyer echoed a similar sentiment when he stated that “Congress will continue to exercise strong oversight of this program. And we will work closely with Secretary Paulson and the next Administration to ensure that the taxpayers’ interests are protected…”

Unfortunately, according to a recent Washington Post story (“Bailout Lacks Oversight Despite Billions Pledged,” November 13, 2008), it appears that we are falling well short of that mark. In fact, with nearly $300 billion of the bailout funds already committed, the Post quotes the Department of Treasury’s inspector general in describing the current situation: “It’s a mess.” In elaboration, he states “I don’t think anyone understands right now how we’re going to do proper oversight of this thing.” The story highlights apparent delays regarding the recent nomination and future Senate confirmation of a special inspector general and the appointment by Congressional leaders of a five-member Congressional Oversight Panel, which will augment the oversight roles of the Government Accountability Office and the Congressional Budget Office.

It is difficult to imagine a more pressing federal responsibility than ensuring that hundreds of billion of taxpayer dollar are not wasted. The scope and list of participants of the largest federal bailout in history are shifting on a near-daily basis, from the buying of troubles assets to propping up banks of all sizes to bailing out American Express and possibly the automotive industry. Taxpayers deserve to have Congress and the Executive Branch engage in their oversight responsibilities with the same speed and seriousness with which they have been willing to provide hundred of billions of taxpayer dollars to an expanding list of industries.

We urge you to buck the current trend in Washington of increasing spending while decreasing oversight. We urge you to aggressively move forward with all of the oversight responsibilities detailed in the Emergency Economic Stabilization Act of 2008. We also look forward to a thorough discussion in the coming Congress regarding the adequacy of existing oversight provisions to meet the changing nature of the scope of the bailout.

Opposition to Additional TARP Funds

In November of 2008, Congresswoman Bachmann released a press statement noting her opposition to the release of the addition $350 Billion in TARP funds.

Bachmann Opposes Additional $350 Billion in TARP Funding
Demands Fiscal Responsibility in Washington

Washington, D.C., Nov 24, 2008 - U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, recently co-sponsored a Joint Resolution of disapproval, H.J.RES 101, to prevent Congress from spending the remaining $350 billion in TARP (Troubled Asset Relief Program) bailout funds.

"Our nation’s economy has seen tough times this year," said Bachmann. "But taxpayer bailout after taxpayer bailout has yet to provide the promised stability to the markets. The American people were sold a false bill of goods. They’ve been watching their hard-earned tax dollars and their children’s future spent to shore up banks and financial institutions with no positive impact on their family’s economic well-being."

"Congress compounded our economic problems by passing the massive taxpayer-funded $700-billion bailout and now Congress should fix it," continued Bachmann. "Under the bailout legislation, Congress has the ability to disapprove spending the remaining $350 billion. It’s time for Washington to do the right thing and put a stop to the bailout bonanza. Our nation’s hard-working families have taken enough financial hits this year, throwing more of their money to Wall Street giants further pushes them into debt and financial turmoil."

Under the terms of the legislation passed in October, U.S. Treasury can spend up to $350 billion of the total $700 billion allocated in the Wall Street bailout bill immediately. And, to date, most of that funding has been spent. Congress has the authority, however, to withhold the remaining $350 billion. In recent days, the Treasury Inspector General has noted the failure to execute the oversight provisions of the bailout bill, Treasury Secretary Paulson has changed the plan for use of funds several times, and the market has failed to respond favorably to the use of TARP funds thus far. All of this calls into question the wisdom of expending the remaining taxpayer funds.

A copy of H.J.Res 101 is below:

Relating to the disapproval of obligations under the Emergency Economic Stabilization Act of 2008.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the obligation of any amount exceeding the amounts obligated as described in paragraphs (1) and (2) of section 115(a) of the Emergency Economic Stabilization Act of 2008.

Statement on Bailout Oversight

In December of 2008, Congresswoman Bachmann released a statement noting her statements on oversight of the bailout.

Bachmann Committee Statement on Oversight Failures in Implementation of Bailout

Washington, D.C., Dec 10, 2008 -

Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, made the following statement for a Financial Services Committee Hearing regarding Oversight Concerns Regarding Treasury Department Conduct of the Troubled Assets Relief Program:

I’m extremely concerned about the findings published in the Government Accountability Office (GAO) report issued this month regarding federal oversight of the Troubled Asset Relief Program (TARP). The report’s title says it all: Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency:

"Simply put, the nonpartisan, independent GAO clearly details a litany of shortcomings related to Treasury’s oversight of TARP. It lists nine specific areas that require more attention by Treasury and numerous recommendations for improved implementation of the program.

"For example, it states that Treasury does not have an adequate mechanism in place to ensure institutions that have received taxpayer dollars comply with "limitations on executive compensation, dividend payments, and the repurchase of stock."

"It points out Treasury’s serious communication flaws with Congress and the public – the ones footing the bill for the bailout -- during the TARP’s implementation, including, quite notably, the sudden decision to make capital injections into banks rather than to purchase "troublesome" assets. GAO correctly refers to this as "information gaps and surprises." This lack of communication is more than just irksome; it has led to real market instability.

"The GAO report questions Treasury’s ability to mitigate possible conflicts of interest held by decision-makers contracted to execute TARP. GAO states that "few details" have been submitted "on how the companies would notify and communicate with Treasury if conflicts were identified during the course of performance." This is a serious matter and one which should have been planned for before the TARP was executed to protect taxpayers.

"Perhaps most importantly, the report describes strong concerns with how Treasury will monitor the use of TARP funds through the Capital Purchase Program (CPP) and ensure that the CPP accomplishes its goals. Currently, according to the GAO, Treasury cannot measure "whether financial institutions’ activities are generally consistent with the purposes of CPP and help ensure an appropriate level of accountability and transparency." That, Mr. Chairman, is indeed a serious concern and one that the taxpayers demand be addressed immediately.

"Unfortunately, Treasury has already spent about half of the TARP funds without any of these matters being addressed. And, I believe that whether or not Treasury satisfies the GAO’s concerns or implements its recommendations during expenditure of the remaining $350 billion, the TARP remains an objectionable use of tax dollars and holds little promise of success. However, so long as this program is in place, Treasury must be held accountable for its oversight."

Opposition to Rush for Second Installment

In January of 2009, Congresswoman Bachmann released a statement noting her opinion that the rush to enact the second installment of the TARP legislation should be slowed.

Bachmann Condemns Rush to Spend Another $350 Billion in Taxpayer Funds on Failed Program

Washington, D.C., Jan 13, 2009 - Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, made the following statement in a hearing on the “Priorities for the Next Administration - Use of TARP Funds under EESA:”

“Today, our Committee is meeting to discuss detailed ways in which the second $350 billion of the Troubled Asset Relief Program (TARP) may be spent. And, frankly, I'm troubled by the timing.

“For one thing, we have not even held a single hearing on the merits or necessity of releasing this second tranche. Our Committee is proceeding as if the decision has been made to release the second $350 billion without holding any substantial debate on whether or not such a release is the appropriate step for stabilizing our financial markets and getting the markets moving again.

“And, at the same time, the issues we discuss today surely deserved a little more thought before Congress handed the Treasury a $700-billion blank check.

“When the original bailout was passed we were told that $700 billion was essentially a “big number” picked out of thin air that was needed to calm the markets – not that the U.S. Treasury must spend every penny of it. Many experts and even Secretary Paulson himself stated that this was the case.

“I am concerned that our Committee is moving forward with a preemptive discussion that jumps ahead of this fundamental question – is it necessary to release the second tranche for the state of our financial markets? I am not convinced that the case has been made that it is.

“Worse yet, the House has already scheduled a floor vote on the Chairman’s bill, H.R. 384, which attempts to make sweeping changes to the way the TARP must operate. While I agree that the TARP has had serious flaws, most of which were predicted by many of us on this Committee, and we should be looking at ways to address these flaws, Congress should not rush to vote on this bill in the next few days.

“There's an adage that says: Fool me once, shame on you. Fool me twice, shame on me. This Congress was rushed into a gargantuan decision last Fall; one that will have financial repercussions for generations. The majority in the House was fooled into believe that there was not enough time to think before acting. We must not make that mistake again.

“We are just today holding a hearing on this legislation, where we expect to hear varying approaches from experts on how the second tranche could be allocated and how oversight of the TARP could be improved. Our Committee has not held a mark-up to hash out alternatives or offer any improvements to H.R. 384. In fact, the last time our Committee held a mark-up at all was September 16, 2008 – almost four months ago.

“Congress owes it to the hardworking taxpayers of our nation to take a careful look this time rather than repeating the mistakes of last October.” 

Fox Business Appearance

In January of 2009, Congresswoman Bachmann appeared on Fox Business and spoke about the second installment of TARP funds and the need to allow Republicans to offer amendments.

Amendment to TARP Reform and Accountability Act

In January of 2009, Congresswoman Bachmann released a statement noting an amendment that she had introduced to the TARP Reform and Accountability Act.

Bachmann Offers Amendment to Protect Taxpayers
Amendment Alters the Misguided TARP Reform and Accountability Act

Washington, D.C., Jan 15, 2009 -

Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, offered a taxpayer-friendly amendment to H.R. 384, the TARP Reform and Accountability Act.

Her amendment would keep in place current taxpayer protections in the HOPE for Homeowners program. H.R. 384 would strip those provisions. During debate, Bachmann stated:

"When the Democrats created the [HOPE for Homeowners] program three months ago, they promised that it would help 400,000 families who were behind on mortgage payments and possibly facing foreclosure. But with little over 300 applications in the pipeline, it is clear that this program has been a huge waste of time, energy, money and other taxpayer resources.

"As of January 3, 2009, the HOPE for Homeowners program, which cost taxpayers $300 billion, can be credited with helping only 13 families actually refinance. So what is the Majority going to do? How far will they go to prove their failing program is a success and not a boondoggle?

"Unfortunately, today, we see the answer. My Democrat colleagues are willing to strip out essential taxpayer protections in an effort to spur more participation in the program. Let’s be clear, we’re talking about taxpayer protections which were already weak at best. In the underlying bill, they are virtually non-existent."

The taxpayer protection provisions include requiring program participants to pay premiums that are used to sustain the program. H.R. 384 completely eliminates the upfront premiums and gives the FHA the authority to waive annual premiums as it sees fit. This taxpayer protection has been regularly touted by supporters of HOPE for Homeowners as a critical taxpayer safeguard.

Another important taxpayer protection stripped by H.R. 384, but secured by Bachmann's amendment, would ensure that taxpayers receive a home equity appreciation share as payment for their investment through HOPE for Homeowners. If homeowners who receive assistance through the program benefit from rising home values, they shouldn't be able to make a profit without paying back the taxpayers who lent them a helping hand to keep their homes in the first place.

Bachmann's taxpayer protection amendment was defeated on a nearly party-line vote.

Rejection of Amendment

In late January, Congresswoman Bachmann released a statement noting the failure of her proposed amendment to the TARP reform legislation.

Democrats Reject Bachmann's Amendment to Protect Taxpayers

Washington, D.C., Jan 27, 2009 - Yesterday, U.S. Representative Michele Bachmann (MN-6) offered a critical taxpayer-protection amendment to the Democrats’ so-called "stimulus" package, the $825-billion American Recovery and Reinvestment Act. This amendment was rejected by the Democrat-controlled Rules Committee.

"Once again, Washington is bailing out their special interest friends on the backs of hard-working American taxpayers," stated Bachmann. "Our economy needs a stimulus proposal that actually creates jobs and reinvigorates the economy. This misguided legislation is not it."

"Congress intends to distribute the funds of this bill largely through state and local governments," continued Bachmann. "If they’re going to act as middlemen and benefit from the federal funds, they should be required to account to the taxpayers who are footing the bill. For years, too many of them have built larger and larger budgets off more and more federal funding – and now they find themselves in a budget crunch as a result. My amendment will break the addiction to Washington dollars and protect hard-working taxpayers."

The official summary of the Bachmann amendment is below:
Requires that within two years upon any state or local government receiving funds, such state must implement legislation which (1) limits the annual increase in state spending to inflation plus the percentage increase in population and (2) requires voter approval for any new tax rate increase, extension of a tax due to expire, or tax policy changes causing a net revenue gain, and such local government must implement legislation which (1) limits the annual increase in spending to inflation plus the percentage change in net taxable real property and (2) requires voter approval for any new tax rate increase, extension of a tax due to expire, or tax policy changes causing a net revenue gain.

Should a state or local government fail to pass such legislation, funds it has received under this Act shall be returned to the US Treasury.

Larry King Live

In March of 2009, Congresswoman Bachmann appeared on Larry King Live and spoke about the AIG bonuses and the need to have an exit strategy from AIG.

TARP Becomes a Revolving Door

On March 18, 2009, Congresswoman Bachmann wrote an op-ed discussing what has been done with TARP funds once they have been repaid to the government. She notes legislation that she has co-sponsored to require funds paid back to TARP to be used to pay down the debt.

TARP Becomes a Revolving Door Slush Fund
5/18/2009 | Email Michele Bachmann | All Posts By Blogger

As part of the Wall Street bailout Congress passed last year, you may recall the optimistic talk about the potential profit taxpayers could get for their “investment.” But, as banks start to repay their TARP loans, it turns out that the U.S. Treasury is just turning the bailout into a sort of revolving door slush fund.

Some institutions have paid back their money as required – including Minnesota’s own TCF Bank, but instead of returning that money to the taxpayers to pay down the debt, Treasury Secretary Geithner wants to dole out the returned funds to more banks! Geithner announced just last week that funds will soon be made available to banks with less than $500 million in assets, and will allow those banks to apply for as much as 5 percent of risk-weighted assets, up from the previous 3 percent limit.

I’m cosponsoring legislation that will require that repaid bailout funds go directly to paying down the debt. And, it would require that TARP’s overall authorization to spend be reduced every time an institution pays the taxpayers back by the corresponding amount. All analyses now forecast trillion-dollar deficits as far as the eye can see. Congress needs to pay back the taxpayers who footed the bill for this misguided bailout. As an opponent of the Wall Street bailout I have to ask: How much longer will we continue this revolving line of credit to burden American taxpayers?

Response to AIG Bonuses

In March of 2009, Congresswoman Bachmann released a statement noting her reaction to news that AIG had issued bonuses after receiving bailout money.

Bachmann: The American Taxpayer Deserves More From Their Investment

Washington, D.C., Mar 19, 2009 -

U.S. Representative Michele Bachmann (MN-06) today released the following statement after the U.S. House of Representative voted a super-tax on AIG bonuses:

“I share the public’s distaste for these outrageous bonuses. The very executives who were responsible for AIG’s financial downfall and who have retained their jobs by the grace of the American taxpayer should show a little humility and a lot of respect and reject this extravagance.

“But what has been lost in all this D.C. outrage is the stark reality that this debacle is what should be expected when government moves into the Board Room. Congress passed the misguided $700-billion bailout in October; Congress approved the second tranche of $350 billion for the bailout in January; and Speaker Pelosi and President Obama pushed through a “stimulus” package that specifically permitted these AIG bonuses on the taxpayer dime. When Congress and the Administration took these actions they set in motion this necessity that they feign outrage over misuse of hard-working taxpayers’ money.

“These bonuses were public record as far back as May 2008 – long before Congress started to send over $170 billion to bail out AIG. And, in November, the Federal Reserve was directly involved in an AIG working group set up to discuss these very multi-million-dollar retention bonuses. On Sunday, the Obama Administration said they couldn’t abrogate the AIG bonus contracts. As soon as the public ire arose, the Administration was singing a tune of outrage and vowing to get the bonuses back. But, the Administration won’t own up to the fact that they specifically inserted language into their must-pass, crisis “stimulus” bill to permit the AIG bonuses to be paid.

“The American taxpayers deserve to know the truth about what the Administration knew and when they knew it. And Congressional Democrats need to explain why they blocked efforts to stop executive bonuses in their “stimulus.”

“This is just another example of how these programs lack adequate transparency and accountability. Congress must engage the same determination they used this week to enact an exit strategy for the American people from bailout-band-aid mania. The American people deserve our outrage about more than just these $165 million.”

The Stimulus and AIG Bonuses

In March of 2009, Congresswoman Bachmann spoke on the House floor about language in the Stimulus that protected the AIG bonuses.

Days later, Congresswoman Bachmann appeared on Fox Business and spoke about the Democratic involvement in AIG bonus language and expanding the power of Treasury.

Need for TARP Reform

In April of 2009, Congresswoman Bachmann appeared on the Glenn Beck program and spoke about TARP program changes to move from preferred stock to common stock.

Glenn Beck Appearance

In April of 2009, Congresswoman Bachmann appeared on the Glenn Beck program and spoke about the change of stock from preferred to common stock in companies that received TARP funds. She then discusses the involvement of politics in decisions made at General Motors.

Show us the Money

In April of 2009, Congresswoman Bachmann wrote an op-ed calling for the Federal Reserve to open it's books and let the American people know which foreign banks received money from the program and what liabilities the US was obligated to cover.

Show Us The Money
4/24/2009 | Email Michele Bachmann | All Posts By Blogger

Today, several of my colleagues and I sent a letter to Budget conferees asking them to include language in the final budget resolution that calls for the Federal Reserve to identify banks and other financial institutions that have received more than $2.2 trillion in taxpayer-backed loans and other financial assistance since March 24, 2008.

Simultaneously, Mark Pittman of Bloomberg reported that the Federal Reserve has lost $9.6 billion on the assets it purchased from Bear Stearns and AIG last year.

Americans deserve to know which banks are receiving taxpayer money, what they are doing with the money, and the credit risk taxpayers are taking on through the Federal Reserve’s actions. This language encourages such transparency, allowing for audits and public disclosure of secret loans and financial assistance from the Federal Reserve to these large institutions.

It's your money, and you deserve to know what's happening with it.

TARP as a Slush Fund

In May of 2009, Congresswoman Bachmann wrote an op-ed referring to the TARP as a slush fund. She noted legislation that she had cosponsored that would require repaid TARP funds to go directly to paying down the debt.

TARP Becomes a Revolving Door Slush Fund
5/18/2009 | Email Michele Bachmann | All Posts By Blogger

As part of the Wall Street bailout Congress passed last year, you may recall the optimistic talk about the potential profit taxpayers could get for their “investment.” But, as banks start to repay their TARP loans, it turns out that the U.S. Treasury is just turning the bailout into a sort of revolving door slush fund.

Some institutions have paid back their money as required – including Minnesota’s own TCF Bank, but instead of returning that money to the taxpayers to pay down the debt, Treasury Secretary Geithner wants to dole out the returned funds to more banks! Geithner announced just last week that funds will soon be made available to banks with less than $500 million in assets, and will allow those banks to apply for as much as 5 percent of risk-weighted assets, up from the previous 3 percent limit.

I’m cosponsoring legislation that will require that repaid bailout funds go directly to paying down the debt. And, it would require that TARP’s overall authorization to spend be reduced every time an institution pays the taxpayers back by the corresponding amount. All analyses now forecast trillion-dollar deficits as far as the eye can see. Congress needs to pay back the taxpayers who footed the bill for this misguided bailout. As an opponent of the Wall Street bailout I have to ask: How much longer will we continue this revolving line of credit to burden American taxpayers?

TARP Program Could Cost $23 Trillion

In July of 2009, Congresswoman Bachmann wrote an op-ed discussing the TARP program and stated that it's eventual cost could reach $23 trillion.

TARP Costs May Reach $23.7 Trillion
7/22/2009 | Email Michele Bachmann | All Posts By Blogger

The Troubled Asset Relief Program (also known as TARP, and most commonly known as the Wall Street bailout), signed into law several months ago was done so with a price tag of $700 billion. But on Monday, we heard that this number could be significantly higher - to the tune of $23.7 trillion - when all’s said and done. This according to Neil Barofsky, the Special Inspector General of the TARP.

As reported in Politico:

"Originally, TARP was intended, Barofsky writes, to facilitate 'the purchase, management, and sale of up to $700 billion of toxic assets, primarily troubled mortgages and mortgage-backed securities.'

"But that plan was soon rejected, and the TARP instead became a grab bag of bailout initiatives, including bailouts for GM, Chrysler and auto parts suppliers as the federal government struggled in real time to contain a spiraling economic disaster.

"Barofsky reports that TARP has come to include 12 separate programs that include a total of as much as $3 trillion, 'including TARP funds, loans and guarantees from other agencies, and private money.'

"Barofsky’s calculation of a $23 trillion figure took into account a wide-ranging group of federal programs set up by disparate agencies within the federal bureaucracy.

"The special inspector general counted approximately 50 initiatives or programs launched since 2007 to fight the economic collapse."

What's worse is that these non-TARP activities cost more than TARP itself and do not require Congressional approval. And, the Treasury Department continues to reject efforts to let the American people know how and where and why their money is being spent. As Barofsky has said, “[Treasury] has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency and fulfill Treasury’s stated commitment to implement TARP ‘with the highest degree of accountability and transparency possible.’”

Of course, even if Treasury won’t open up the books to the people, there are other ways for you to find out what’s happening with your money. For instance, the Hill newspaper points out that "auto companies and eight of the country’s biggest banks that received tens of billions of dollars in federal bailout money spent more than $20 million on lobbying Washington lawmakers in the first half of this year….Six of the eight banks spent more to try to sway lawmakers in the first half of 2009 than over the same period in 2008, before the worst of the financial crisis took hold.”

At least lobbying disclosures give us a sneak peek into how the bailed out are spending their money. Sadly, lobbying is not what Americans had in mind when their hard-earned money was put on the line.

Consumer Protection and Regulatory Enhancement Act

In July of 2009, Congresswoman Bachmann released a press statement noting her support for the Consumer Protection and Regulatory Enhancement Act.

Bachmann Supports Taxpayer-Friendly Exit Strategy from Bailout Mania
Questions Bernanke About Administration Proposal for Permanent Bailout Plan

Washington, D.C., Jul 24, 2009 - U.S. Representative Michele Bachmann (MN-06), member of the House Financial Services Committee, today questioned Federal Reserve Chairman Ben Bernanke, who appeared before the Committee to discuss financial regulatory reform. As Bachmann stated:

“The President’s financial regulatory reform proposal is disappointing, at best, and clearly demonstrates to the American people that the Administration is not serious about ending the bailout mania, of which the American people have grown more than weary. To the contrary, it includes a government commitment to an everlasting cycle of taxpayer bailouts; an expansion of complex government bureaucracies which haven’t worked in the past; a new government-run financial products commission, which will no doubt stifle market innovation; and a permanent bailout agency tasked with picking winners and losers and responsible for fixing private sector mistakes.

“We are better than this. Our constituents deserve better than this.

“My Republican colleagues and I have introduced a plan which would reform our financial system responsibly, preserve important market-based forces and specifically prohibit government bailouts. It is time to protect the taxpayer and prevent any further losses from being placed on their shoulders.

“Our message is loud and clear: no more uncertainty, no more guessing games, and no more bailouts. This is what our country desperately needs.”

Bachmann is a cosponsor of the Consumer Protection and Regulatory Enhancement Act, which would include:

• Creation of New Bankruptcy Chapter for Certain Institutions
• Market Stability and Capital Adequacy
• Regulatory Consolidation and Consumer Protection
• Reform of the Federal Reserve
• Government-Sponsored Enterprises Reform
• Credit Rating Agency Reform
• Anti-Fraud Provisions

End TARP Before 2010

In December of 2009, Congresswoman Bachmann wrote an op-ed discussing a letter she and numerous other Congressmen had sent to Treasury Secretary Timothy Geithner asking him to end the TARP program before 2010.

Do Not Extend TARP into 2010
12/9/2009 | Email Michele Bachmann | All Posts By Blogger

This week, I sent a letter to Treasury Secretary Tim Geithner, along with 108 of my colleagues, urging him not to extend the Troubled Asset Relief Program (TARP) into 2010. While there will be ups and downs along the way as our economy struggles to regain its footing, TARP was passed with the intention of providing immediate support and emergency stabilization to our financial system. And yet, we see the President and the Democrat Majority in Congress floating the idea of paying for a second economic “stimulus” with TARP funds, a blatant distortion from TARP’s original purpose. TARP is not and was never intended to be a revolving door slush fund that the government can tap into as they see fit. Instead, the federal government’s first priority should be paying back the taxpayers.
 

New Hampshire Debate

In June of 2011, Congresswoman Bachmann appeared in the Presidential Debate in New Hampshire and stated that she fought her own party behind the scenes on TARP attempting to stop the legislation.

BACHMANN: John, I was in the middle of this debate. I was behind closed doors with Secretary Paulson when he came and made the extraordinary, never-before-made request to Congress: Give us a $700 billion blank check with no strings attached.

And I fought behind closed doors against my own party on TARP. It was a wrong vote then. It's continued to be a wrong vote since then. Sometimes that's what you have to do. You have to take principle over your party.

Voting Record

Emergency Economic Stabilization Act

In October of 2008, the House passed the Emergency Economic Stabilization Act of 2008. Support and opposition to the legislation were both bipartisan. Michele Bachmann voted against the Emergency Economic Stabilization Act, which created the Troubled Asset Relief Program (TARP).

Emergency Economic Stabilization Act

In September of 2008, the House made an attempt to pass an initial version of the Emergency Economic Stabilization Act of 2008. The attempt failed 205-228. Michele Bachmann voted against the initial passage of the Emergency Economic Stabilization Act.

Sponsored and Cosponsored Legislation

This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.

Herman Cain

Summary

As the financial crisis unfolded, Herman Cain expressed an opinion that something needed to be done by the government. He stated that the US government was the only entity with shoes big enough to fill the void left by the economic collapse. As opposition to the TARP plan mounted, Mr. Cain stated that the plan was far from nationalization and would be a win-win for taxpayers. He mocked those who expressed concern that the plan would lead to a takeover of the banking industry.

Months after the TARP plan went into affect, Herman Cain wrote that the plan had not been carried out as the legislation stated, noting that preferred stock was called for in the legislation but this restriction was not being adhered to by Congress. During the 2012 election, he has expressed opposition to the manner in which the plan was carried out. 

North Star Writer's Group

On October 20, 2008 Herman Cain published an article for the North Star Writer's Group in which he discussed his support for TARP. He states that owning a portion of the banks is not a bad deal and calls those who oppose the plan "free market purists."

October 20, 2008

Far from Nationalization, Purchase of Bank Stocks Is a Win-Win for Taxpayers

Earth to taxpayers! Owning stocks in banks is not nationalization of the banking industry. It’s trying to solve a problem.

The unprecedented financial crisis has caused the Treasury of the United States to take unprecedented measures to help solve the problem of frozen credit and cash flow for U.S. businesses.

Most of us had dreams of what we wanted to be when we grew up as children. Some of us wanted to grow up and become a fireman, a policeman, a doctor, a nurse, a lawyer, a teacher, an actor, an engineer, a writer, a dancer, a chef or any number of other professions.

But some of us wanted to own a bank because that’s where the money is!

Wake up people! Owning a part of the major banks in America is not a bad thing. We could make a profit while solving a problem.

But the mainstream media and the free market purists want you to believe that this is the end of capitalism as we know it. It is not for several reasons that they have conveniently not explained.

First, instead of buying toxic mortgage-related assets of banks as originally proposed, the Treasury has changed tactics and will buy equity positions called preferred stocks, which gives us as taxpayers an ownership stake in their success for a limited period of time.

Preferred stock means we get paid a dividend before any other stockholders get paid a dividend when they make a profit. You got a problem with that?

Second, the purchase agreement between the Treasury and the participating banks has an incentive for the banks to re-purchase the stock back from the Treasury within five years.

If the banks do not re-purchase the stock in five years then we get a bigger dividend until they do re-purchase the stock. That’s a good deal!

The free market purists’ objection to this is that it smacks at government control of the banking industry, which is called nationalization. They are correct. It smacks, but it is not nationalization because that would require the government to own at least 51 percent of the entity for an indefinite period of time.

The ownership by the taxpayers is going to be relatively small and nowhere near the amount needed to be called nationalization. So what’s the problem?

The problem is economic illiteracy and media incompetence. Some people want to continue to fan the flames of anger and outrage over how we got into this mess in the first place. Anger and outrage will not solve the problem.

Unprecedented problems require unprecedented solutions. The actions by the Treasury are a win-win for the taxpayer. But the mainstream media does not get brownie points for reporting win-win solutions for the taxpayers. Their focus is doom and gloom.

These actions by the Treasury, the Federal Reserve Bank and the actions by the Federal Depositors Insurance Corporation (FDIC) are all intended to help solve an unprecedented financial crisis. Unlike steps taken prior to and during the Great Depression, these actions have a high probability of success.

In order for these collective actions to work, the media needs to calm its crisis rhetoric, and Congress needs to just shut up with its political rhetoric.

Now don’t tell Nancy Pelosi and Harry Reid, but if this works, and I believe it will, the Bush Administration will have gotten this one right.

As we say in the South, y’all hush!

Biggest Shoes

On October 27, 2008, Herman Cain wrote an article discussing the ability of the US to fill the shoes needed to address the problems caused by the economic downturn through a program like TARP.

October 27, 2008
When the Market Needed Unprecedented Steps, America Had the Biggest Shoes

When the financial crisis started in the United States, it affected the entire global financial system. That’s the bad news.

When unprecedented steps were needed to help stabilize the world financial system, the United States had the biggest shoes. That’s the good news.

Unprecedented steps by the Federal Reserve Bank, the U.S. Treasury and the FDIC were not always pretty but necessary, and they were certainly criticized and politicized to death. But our deep debt pockets, enough confidence in our weak dollar by the rest of the world, and our overall financial framework allowed the U.S. to drop the biggest anchor in these financially troubled waters.

When some banks finally admitted that their balance sheets had gotten out of balance (too many liabilities for too little in assets), they stopped lending to each other. Go figure! Not all banks were in deep trouble, but too many of them had over extended themselves.

If banks are not lending to each other then there’s a slim chance to none that they are going to make loans to you and me and Joe the Plumber. Thus, the flow of credit and cash froze up domestically and around the world.

The credit freeze was not caused totally by the failure of Fannie Mae and Freddie Mac, but they were the catalyst because of the size of their toxic mortgage-related holdings, along with some bad decisions by some banks.

When the credit markets came to a halt, the Federal Reserve Bank injected some liquidity by making some unprecedented loans to banks. This was intended to inspire the banks to start lending again, but that action alone was not enough.

With the authorization of the Economic Rescue Legislation, the Treasury then purchased temporary equity in some banks at a preferred dividend rate. This would provide some additional liquidity to the banks to help thaw the credit markets, which would include direct loans, lines of credit and the short-term commercial paper market.

When consumers got nervous about their bank deposits and money market accounts, the FDIC was able to step up and provide increased limits of insurance on deposits and new coverage of money market accounts. If they had not taken these steps there could have been a “put it under the mattress” run on accounts that would have compounded the problem.

At the same time the domestic and international stock markets were going crazy looking for the bottom and a new equilibrium. We may be near the bottom, but finding a new equilibrium is months away.

It’s called a recession, and it is here.

The financial crisis has caused historic levels of volatility in stock markets around the world. It is also going to cause some financial pain on Main Street with job losses we have not seen in the last 50 years.

The good news is that, in the last 50 years, the economy has been in a growth mode 84 percent of the time, while in a recession 16 percent of the time.

We now need to give all of these unprecedented steps by the Federal Reserve Bank, the Treasury and the FDIC some time to work their way through the financial system.

Not many countries could have taken the steps we have taken to address this crisis to the degree we have. Yes, we should not have gotten into this situation in the first place. And yes, there were some better approaches to the problem. But politics does not always allow the best solution to come to the forefront.

When we have the biggest economy in the world, we have to take the biggest steps in the world to address the problems.

We did.

We now need to take a big chill pill and let it work.

Barney Frank is a Crook

In July of 2009, Herman Cain wrote an article discussing legislation proposed by Congressman Barney Frank which would have allowed Congressman Frank to use funds from TARP repayments for purposes other than paying down the debt.

July 6, 2009
Barney Frank: Certified Elected Crook

While the mainstream media was saturated with coverage of celebrity deaths last week, the House of Representatives passed the Cap & Trade & Tax & Kill bill. The official name is the American Clean Energy and Security Act of 2009, but there is absolutely nothing clean about it.

This is another bill passed by Congress where no members had an opportunity to read the bill, because most of the members did not receive the last 300 pages of the 1,400-page bill until 3:06 a.m. last Friday, June 26, the day the bill was voted on and passed.

While celebrity deaths were receiving the most coverage, this so-called “clean energy” bill received some coverage, but not nearly in proportion to the largest-ever expansion of taxes and government in our nation’s history!

The dirty little secret that Rep. Barney Frank introduced during those closing hours of last Friday’s session of Congress received no coverage at all.

Barney’s “TARP for Main Street Act of 2009” would allow the profits now coming back to the taxpayers from TARP to be used for one of Barney’s pet projects that did not get funded with last year’s bailout of Fannie Mae and Freddie Mac. The original TARP authorization specifically designated that profits from the loans would be used to pay down debt on behalf of the taxpayers.

Some people would call Barney Frank’s move sleight-of-hand, below the radar, bait-and-switch or opportunistic. I call it just plain deceitful and crooked.

Barney and the Democrats could not resist the $6.2 billion that the General Accountability Office (GAO) had reported coming in so far. Some skeptics never thought the taxpayers would see a dime of profit from TARP, and they will be right if Barney’s bill is enacted, because the Democrats will have stolen it by simply changing the rules.

I was not aware of the Barney bill until I heard it on the Fox News Channel, and then looked up Byron York’s article in The Washington Examiner (a must-read).

York had previously documented the corruption, cover-up and cooked books at Fannie Mae and Freddie Mac that led to their collapse, where Barney Frank again played a key role as Chairman of the House Oversight Committee, which looked the other way instead of providing oversight.

Barney Frank, Ted Kennedy and Chris Dodd (who chairs the committee in the Senate for oversight of Fannie and Freddie) are the same Democrats who want us to now go along with a government health insurance option, and not expect the rules to change later. All the while, President Obama is proclaiming that the government option is not a “Trojan Horse”.

I suppose not, it’s just another mule disguised as a horse.

We are suppose to believe that the government health insurance option plus Congress’s authority to change the rules will not lead to a single-payer, government-run health care system. We are also to believe that it would not become Medicare’s ugly twin sister.

We are not suppose to remember that Social Security and Medicare started out as promising, racehorse-caliber social programs. Medicare is already running backwards (red ink), and Social Security is on a fast track to insolvency.

The Democrats want the public to be jackasses one more time.

NW Iowa Politics

On May 8, 2011 NorthWest Iowa Politics asked Herman Cain about his position on the TARP legislation and bailouts in general. Mr Cain asserts that he opposes all bailouts and that companies that fail should be allowed to collapse.

Shark Tank Media Interview

In March of 2011, Herman Cain was interviewed by Shark Tank Media. He stated that he supported the TARP program under the belief that the program as sold was necessary. The implementation of the program was different than the stated purpose and the rules were made up as the they went along.

New Hampshire Debate

In August of 2011, Herman Cain participated in the Republican Debate in New Hampshire. He states that while he initally supported the TARP program, but when the administration began to implement it on a discretionary basis, he opposed it.

KING: All right. These are the Republicans, the conservative candidates. Every time you applaud, I know you're happy with the answer. You take your time away, though.

We would expect to get an answer of less government is better. One of the questions we want to explore tonight is when -- when do you reach that extraordinary moment where the government might want to do something.

Mr. Cain, I want to ask you because you're a businessman who initially at least supported the TARP program. The former senator Judd Gregg of this great state of New Hampshire was one of the architects of that program during the late hours of the Bush administration. Then you said, quote, "We needed to do something drastic because we were facing a very drastic situation."

CAIN: I studied the financial meltdown and concluded on my own that we needed to do something drastic, yes. When the concept of TARP was first presented to the public, I was willing to go along with it. But then when the administration started to implement it on a discretionary basis, picking winners and losers and also directing funds to General Motors and others that had nothing to do with the financial system, that's where I totally disagreed.

We should -- the government should not be selecting winners and losers, and I don't believe in this concept of too big to fail. If they fail, the free market will figure out who's going to pick the up the pieces.

The Western Debate

In October of 2011, Herman Cain participated in the Western Debate in Las Vegas. He agrees that he initially supported the TARP program, but that he opposed the method of implementation.

COOPER: Mr. Cain, I want you to be able to respond. Thirty seconds.

CAIN: I have said before that we were in a crisis at the end of 2008 with this potential financial meltdown. I supported the concept of TARP, but then, when this administration used discretion and did a whole lot of things that the American people didn't like, I was then against it. So yes, and I'm owning up to that.

Now, getting back to the gentleman's question in terms of what we need to do, we need to get government out of the way. It starts with making sure that we can boost this economy and then reform Dodd-Frank and reform a lot of these other regulations that have gotten in the way --

Rick Santorum

Summary

Senator Santorum was not in office during the TARP vote. After the vote, he spoke out against the TARP program and bailouts in general. He stated that the program was not in the best long term interests of the country.

2010 CPAC

At the 2010 Conservative Political Action Committee, Senator Santorum spoke about his opposition to TARP. He stated that TARP was the wrong thing to do for the country.

Whether TARP was the right thing to do for the economy at the time, it was the wrong thing to do for America, because it set a precedent of crony capitalism and government involvement in the private sector that will ultimately destroy this country.

NW Iowa interview

On March 8, 2011 Senator Santorum was asked about bailouts at the Woodbury County Republican Party. The question was 'With the free market in mind, what are your thoughts on bailouts and subsidies?' Senator Santorum responds by discussing the dangers of having an economic system that prevents failures by taking funds from "winners".

New Hampshire Debate

In June of 2011, Senator Santorum participated in the Republican debate in New Hampshire. He was asked about the GM bailout and states that there should not have been a TARP or a TARP and GM.

KING: Anyone -- is there anyone here who, given that prospect, and President Bush started the program, given that prospect, anyone here who would have stepped in and said, "I don't want to do this, but this is the backbone of American manufacturing, I'll do something"?

SANTORUM: No, absolutely not. We should -- we should not have had a TARP. We should not have had the auto bailout. Governor Romney's right. They could have gone through a structured bankruptcy without the federal government.

All the federal government did was basically tip to the cronies, tip to the unions, gave the unions the company. If they'd have gone through the orderly bankruptcy process, gone through a structured bankruptcy, they'd have come out in the same place, only we would have kept the integrity of the bankruptcy process without the government putting its fingers into it.

Dartmouth Economic Debate

On October 11, 2011 Senator Santorum participated in a debate at Dartmouth University. Senator Santorum asked Herman Cain a question and in doing so claimed that while he opposed TARP, most of the other people on the stage supported it.

SANTORUM: We are in the “live free or die!” state, and I oppose the single biggest government intrusion into the private sector, the Wall Street bailout, the TARP program. I opposed it because it violated the principles of our Constitution, the spirit of our Constitution, and because the experience I had that if you open up the door of government involvement in the private sector, some president will and in fact did drive a truck through it and explode the size of the federal government and constrict our freedom.

The interesting thing here is, is the four people on this panel that actually supported TARP at the time of its passage are the people who say that they are the anti-Washington candidates, that they are the business candidates.

And they are the four on this program that supported the Washington bailout, giving Washington, naively, I would say, tools to constrict our freedom. And since...

TUMULTY: So do you have a question for one of them?

SANTORUM: My question is - you prompted it perfectly, because here is my question. My question is, since I think Herman Cain is giving naively a tool in his 999 plan of giving Washington a huge new tax burden - tax opportunity to get money through a sales tax, can we trust you that with your lack of experience that you won’t continually give Washington the ability to take freedom away from freedom-loving people here in the “live free or die!” state?

CAIN: There are three deterrents to the -

SANTORUM: And, by the way, the four people were Governor Huntsman, Governor Perry, Herman Cain, and Governor Romney, all supported TARP.

Sponsored and Cosponsored Legislation

This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.

Newt Gingrich

Summary

Congressman Gingrich stated that he opposed the bailout in it's initial form that failed. He then stated that had he been in office at the time, he would have reluctantly voted for the legislation. Shortly before the passage of the legislation, Congressman Gingrich stated that Secretary Paulson should be replaced and the mark to market rule should be suspended.

Workout, Not a Bailout

On September 25, 2008 Congressman Gingrich appeared on Hannity and Colmes and called the proposed TARP legislation socialism and stated that it should be defeated in it's form.

This Week Appearance - Something Must be Done

On September 28, 2008 Congressman Gingrich appeared on ABC's This Week and stated that the question was not whether something needed to be done, but whether it needed to be TARP and whether it needed to be done in the next 48 hours. He then states that he would probably reluctantly vote for the legislation.

Two Steps

On October 1, 2008 Congressman Gingrich wrote an article for Human Events detailing two steps that needed to be implemented on the bailout.

Replace Secretary Paulson and Suspend Mark to Market
by Newt Gingrich
10/01/2008

Following Monday's failure of the Paulson plan in the House, it is imperative that our leaders not hesitate to bring stability to our financial markets.

We need action now.

The Paulson Plan - is dead. The time has come for Congress to turn its attention to a plan that does the right things the right way instead of trying to fix the wrong way of this monstrosity of a Wall Street bailout bill.

As I said to Fox News' Greta Van Susteren Monday night, and spoke about at the National Press Club on Tuesday, there are two steps that could be taken that would send a needed signal to the world financial markets that America has leaders who recognize the gravity of the crisis and are capable of putting aside narrow partisan self-interest for the good of the country.

Step One: Replace Secretary Paulson

A plan that relies on the former chairman of Goldman Sachs presiding over disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of - if not the actual existence of - corruption.

The American people understand this and they don't trust the Paulson plan. Congress should never have been faced with this as its only option to solve the financial crisis. Congress never should have been confronted with this bill. And one man, above all others, is responsible.

That man is Henry Paulson, who may have been a great deal maker for Goldman Sachs, but has been an utter failure during this economic crisis.

It's time - passed time, in fact - for President Bush to fire Secretary Paulson.

President Bush should replace Paulson immediately with someone more capable of forging a deal that the American people can trust. Secretary Paulson's Deputy at Treasury is Robert Kimmitt. He does not have the Wall Street background that made Secretary Paulson so difficult to trust as a negotiating partner and should be much more open to alternatives because he has less invested in the "Paulson" plan.

Kimmitt need not go through the actual confirmation process to immediately take over negotiating with Congress. The sooner Paulson is replaced as the chief negotiator for the administration, the sooner we will have a deal the American people can support.

Step Two: Suspend the Mark-to-Market Accounting Rule

The second thing our leaders should do immediately is simple and uncontroversial: Suspend the "mark-to-market" accounting rule that is exacerbating this crisis.

Under this artificial rule, the value of assets of banks moves up and down with economic conditions, regardless of their underlying worth. So in a time of economic crisis - such as the current subprime mortgage crisis - the value of bank assets gets caught in a downward spiral, causing investor panic and a drying up of credit.

In 2004, the European Central Bank issued this now eerily prescient opinion of the mark-to-market rule:

"With a real estate crisis or a stock market crash... [a bank] under [mark-to-market] accounting might aggravate the effects of the shock. Banks may be encouraged to react by panic selling and tightening lending standards, thus contributing to a further deepening of the crisis."

A Smart First Step

I've spent the past few days talking with businesspeople across the country - from Oklahoma, Georgia, Nevada and California - and they agree: this artificial accounting rule is needlessly making the financial crisis worse.

On Monday I appeared on Fox News' On the Record with Greta van Susteren and called for mark-to-market to be suspended.

I also wrote this op-ed yesterday for forbes.com urging the same course of action.

I gave a speech at the National Press Club in which I discussed in depth the need to end this problem now. You can read the text and view it here.

Then, later that afternoon, the Securities and Exchange Commission took a smart first step by issuing a "clarification" giving companies more leeway in estimating the value of mortgage related investments. You can read more here. Securities and Exchange Commission Chairman Chris Cox deserves credit for recognizing how this accounting requirement is needlessly exacerbating our current financial difficulties.

The Bush Administration's Expensive Legacy

Taking these two steps - replacing Secretary Paulson and suspending the mark-to-market rule - are absolutely necessary right now to give Congress the breathing room to develop a plan to replace the Paulson Plan and to re-establish trust with the American people.

The Bush Administration has now provided three case studies that have badly damaged the cause of conservatism.

First there was former FEMA head Michael Brown during Hurricane Katrina, whose incompetence convinced Americans that Republicans can't be trusted with governing.

Then there was Ambassador Jerry Bremer in Baghdad, whose decisions as the head of the American occupation of Iraq convinced Americans that Republicans can't be trusted to manage foreign policy.

And now we have Secretary Paulson at the Treasury, whose intransigence during the worst financial crisis since the Great Depression has convinced Americans that Republicans can't be trusted with their money.

It's a tragic and very expensive legacy. No conservative and no Republican should doubt how much it has hurt our cause and our party.

Rebuilding Public Trust with a Work Out, Not a Bailout

As I told Greta Van Susteren Monday night on Fox News, the fundamental flaw in the Paulson Plan was that it was seen by the American people as a deal designed by and for Wall Street.

Congress needs to go back to the drawing board and develop, not just a financial markets rescue bill (which should be a work out, not a bailout) but also an economic growth bill.

This economic growth package should do two fundamental things:

First of all, it needs to provide relief for our financial markets that is based on lending troubled institutions the capital to restore our credit markets, rather than buying their bad assets. The taxpayers should be asked to extend these institutions a line of credit until they can get back on their feet, rather than blindly acquire these institutions' toxic paper. This is the essential difference between a workout and a bailout.

Second, the plan should stop the flow of $700 billion each year out of our economy and into the coffers of foreign dictators by achieving energy independence. Not only would our national security be improved, but this much new energy income would cause our economy to boom and government revenues to grow.

A Final Warning: Don't Allow the House Democrats to Move the Plan Left

A lot of people are scratching their heads over what would cause House Speaker Nancy Pelosi to deliver such a bitterly partisan speech minutes before the House voted down the Paulson Plan - a plan she purported to support.

I think it's likely that Speaker Pelosi deliberately delivered her highly partisan speech at the last minute to get precisely the result that she got - the defeat of the Paulson Plan. The danger now is that she and the liberal Democrats in the House will spend the next couple days re-loading the bill with all the leftwing pork projects that Senator McCain and the House Republicans were able to remove from it.

This danger makes it imperative that Republicans unify behind Minority Leader John Boehner in resisting moving any rescue plan to the left. The stakes are too high for the American people to allow liberal Democrats to use the current crisis to line the coffers of their special interest allies.

Sponsored and Cosponsored Legislation

This representative has not been identified as sponsoring or cosponsoring significant legislation related to this title.

Mitt Romney

Summary

While Governor Romney has stated that he generally opposes bailouts, he did support the Emergency Economic Relief Act that created TARP. In the 2009 CPAC speech, Governor Romney stated that while everyone did not agree on TARP, it was necessary to prevent a cascade of bank collapses. Governor Romney's support for TARP continued into 2010 when he stated that had TARP not been pushed through a free fall may have occurred that would have caused not just the collapse of a few banks on wall street, but banks all across the country, killing not only a few jobs but jobs all across the country.

2009 CPAC Speech

In February of 2009 Governor Romney spoke at the Conservative Political Action Committee. He stated that although many people did not like it, TARP was necessary.

... This economic crisis has proven that government has an urgent obligation to address some awful abuses we’ve seen in the financial sector, particularly in housing finance. Free markets, properly regulated and allowed to work as they should, have propelled America to be the largest economy in the world. For years, Washington politicians did nothing to prevent the abuses at Fannie and Freddie, and in some cases they encouraged those abuses for political gain. Let’s be clear on this point: conservatives favor clear, streamlined and up-to-date regulations and laws that let the economy work, but we will vigorously oppose those politicians who are poised to use their own failures as an excuse to undermine the free enterprise system.

I know we didn’t all agree on TARP. I believe that it was necessary to prevent a cascade of bank collapses. For free markets to work, there has to be a currency and a functioning financial system. But we can agree on this: TARP should not have been used to bail out GM, Chrysler and the UAW. And this is personal for me, I want the U. S. auto industry to succeed. But as some of us pointed out last November, that can only happen if its excessive costs and burdens are restructured. And concessions are going to be few and far between if bondholders and unions already have your money when the negotiating begins. The right answer for Detroit is this: Fix it first.

All of these measures are meant to confront the current economic peril. Properly guided, Washington could in fact speed the recovery. So far, some of the actions it has taken will help, and some will hurt. But we can be certain that the American economy will recover. The invisible hand of the market is more powerful than the lumbering machinery of government. In the final analysis, we know that the private sector — entrepreneurs and businesses large and small — will create the millions of jobs our country needs. ...

Fox News Appearance

On January 28, 2010 Governor Romney appeared on Neil Cavuto's show to discuss the reappointment of Ben Bernanke, TARP, the Stimulus, and other items. 

Neil Cavuto: You know, he (Ben Bernanke) will forever be remembered, fairly or not Governor, for that rescue in the fall of 2008 and judged historically on what he did then. And he argued, as did Tim Geithner yesterday in a grilling yesterday on capital hill ... talking about the Treasury Secretary Tim Geithner ... and most of that grilling as you know coming from fellow Democrats who said that "you know, we wasted a lot of money back then, and the proof is that they all paid the money back in short order." Tim Geithner's argument is that if we didn't do that then, we would have been in a free fall meltdown. Do you agree with that?

Governor Romney: Well, first of all if the money is being paid back, which it is, we didn't waste a lot of money back then. That was an investment made to try and keep a collapse of our entire financial system from occurring. I think that that's the case. I think that had President Bush, and Secretary Paulson, and Ben Bernanke not pushed for a TARP type program, we would have been in a free fall that would have caused not just the collapse of a few banks on wall street, but banks all across the country, killing not only a few jobs but all the jobs in this country.

That's what we were facing, and the TARP program kept that from occurring, and fortunately the money is now being repaid and that's the right thing to happen.

But the big loss ... and this is of course what a lot of folks are doing is diverting attention from the real failure of this last year, this lost year, where President Obama and Congress spent $787 billion dollars and got nothing to show for it.  They said that they would hold unemployment to 8%, it rose to 10%. That was the number that was supposed to happen without that plan. Look, that was the failure here. TARP got paid back and it kept the financial system from collapsing.

Neil Cavuto: So you feel that it was well worth it?

Governor Romney: Well, it was the right thing to do. You know, I remember talking to Senator McCain when he was in the middle of a Presidential campaign when it came up. He said "Look, it is very bad politics to be for TARP, on the other hand it's the right thing for the country."  That's why he voted for it, and that's why a lot of Republicans voted for it. They knew that it was bad politics, but they also realized that if we saw a cascade of bank failures, one after the other, after the other that the entire free economy would grind to a halt in this country and probably other parts of the world. We were on a precipice which now we can sit back and say "Aw, it wasn't that scary." Well frankly it was a very scary time for a lot of people.  

And that's something which is resolved. But the bigger issue, which was not resolved, is how come this economy is not up and growing again and did the $787 billion dollar stimulus plan actually stimulate anything. Or, did it create a bigger debt burden that we're gonna have to pay for for many years to come.

Rick Perry

Summary

On September 1, 2008 Governor Perry co-wrote a letter to leaders of Congress urging them to act. The letter provided no specifics on the action to be taken. However, that TARP legislation had recently failed to pass Congress and was the only legislation being considered in Congress. The legislation that created the TARP program passed Congress on the day that the letter was written. A year later, Governor Perry stated that this letter was an attempt to spur action other than the TARP legislation.

When more bailouts were discussed after the TARP program, Governor Perry co-wrote another letter in opposition to all bailouts. He stated that the federal government was not only burying future generations under mountains of debt, but also taking our country in a very dangerous direction.

Letters to Congress

On September 1, 2008 Governor was the President of the Republicans Governors Associations. Acting in that capacity, Governor Perry wrote a letter to the leaders of Congress (Speaker Pelosi, Majority Leader Reid, etc) asking them to act now on the economy. The letter is co-authored by Democratic Governor's Association Governor Joe Manchin is denotes the cooperation of the two opposing leaders as a signal of the need to put aside politics and act on behalf of the nation.

Governor Perry would later note that the letter was a call to action and not a direct call to pass the legislation containing TARP. However, the timing of the letter does not support this claim. The letter was sent on September 1, 2008. It followed a failed attempt to pass a bailout package and was sent on the very day the Economic Recovery Act of 2008 was passed through the House.

As leaders of our respective organizations, we don't always see eye to eye on policy, but we come together today with one clear purpose. We strongly urge Congress to leave partisanship at the door and pass an economic recovery package. We both believe that it’s time to stand together for our country.

There is a time for partisanship and there is a time for getting things done. No one likes the hand they've been dealt, and now is not the time to assign blame. It is time for Washington, D.C. to step up, be responsible and do what's in the best interest of American taxpayers and our economy.

This economic crisis is not just impacting Wall Street; it is also making life harder for everyday Americans. Americans across the country and in every demographic are feeling the pinch. If Congress does not act soon, the situation will grow appreciably worse. It's time for leadership. Congress needs to act now.

Roughly a year later, on October 13, 2009 Governor Perry was interviewed on the Dan Patrick Show on KSEV 700 AM. He framed the letter as if it called for action outside of the TARP legislation and stated that he preferred tax cuts and spending cuts.

As a matter of fact, I signed a letter with the Governor of West Virginia, whos a Democrat, when September/October a year ago, when they were talking about, Oh my goodness, the economy is tanking. Weve got to do something. We signed a letter that basically said you know dont get all frozen up in fear, act. I didnt know we needed to write it out for them and say stop spending all of the money and cut the taxes. Thats the blueprint that worked. And still we got people that voted for this bailout that was in hindsight now just an absolute giveaway, didnt help the economy at all.

Governors Against State Bailouts

On December 2, 2008 Governor Perry co-wrote a letter with Governor Sanford of South Carolina denouncing state bailouts and proposals to bailout General Motors.

Governors Against State Bailouts

Hard to believe, but not everyone in politics wants a free lunch.
By RICK PERRY and MARK SANFORD

As governors and citizens, we've grown increasingly concerned over the past weeks as Washington has thrown bailout after bailout at the national economy with little to show for it.

In the process, the federal government is not only burying future generations under mountains of debt. It is also taking our country in a very dangerous direction --

toward a "bailout mentality" where we look to government rather than ourselves for solutions. We're asking other governors from both sides of the political aisle to join with us in opposing further federal bailout intervention for three reasons.

First, we're crossing the Rubicon with regard to debt.

One fact that's been continually glossed over in the bailout debate is that Washington doesn't have money in hand for any of these proposals. Every penny would be borrowed. Estimates for what the government is willing to spend on bailouts and stimulus efforts for this year reach as much as $7.7 trillion according to Bloomberg.com -- a full half of the United States' yearly economic output.

With all the zeroes in the numbers, it's no wonder Washington politicians have lost track.

That trillion-dollar figure is the tip of the iceberg when it comes to checks written by the federal government that it can't cash. Former U.S. Comptroller General David Walker puts our nation's total debt and unpaid promises, like Social Security, at roughly $52 trillion -- an invisible mortgage of $450,000 on every American household. Borrowing money to "solve" a problem created by too much debt seems odd. And as fiscally conservative Republicans, we take no pleasure in pointing out that many in our own party have been just as complicit in running up the tab as those on the political left.

Second, the bailout mentality threatens Americans' sense of personal responsibility.

In a free-market system, competition and one's own personal stake motivate people to do their best. In this process, the winners create wealth, jobs and new investment, while others go back to the drawing board better prepared to try again.

To an unprecedented degree, government is currently picking winners and losers in the private marketplace, and throwing good money after bad. A prudent investor takes money from low-yield investments and puts them in those that yield better returns. Recent government intervention is doing the opposite -- taking capital generated from productive activities and throwing it at enterprises that in many cases need to reorganize their business model.

Take for example the proposed Big Three auto-maker bailout. We think it's very telling that each of the three CEO's flew on their own private jets to Washington to ask for a taxpayer handout. No amount of taxpayer largess could fix a business culture so fundamentally flawed.

Third, we'd ask the federal government to stop believing it has all the answers.

Our Founding Fathers were clear and deliberate in setting up a system whereby the federal government would only step in for that which states cannot do themselves. An expansionist federal government of the last century has moved us light-years away from that model, but it doesn't mean that Congress can't learn from states that are coming up with solutions that work.

In Texas and South Carolina, we've focused on improving "soil conditions" for businesses by cutting taxes, reforming our legal system and our workers' compensation system. We'd humbly suggest that Congress take a page from those playbooks by focusing on targeted tax relief paid for by cutting spending, not by borrowing.

In the rush to do "something" to help, federal leaders would be wise to take a line from the Hippocratic Oath, and pledge to do no (more) harm to our country's finances. We can weather this storm if we commit to fiscal prudence and hold true to the values of individual freedom and responsibility that made our nation great.

The Western Debate

In October of 2011, Governor Perry participated in the Western Debate in Las Vegas. Governor Perry states that the letter he sent to Congress to support "the plan" was not intended to support TARP.

COOPER: Senator Santorum, Nevada has the highest rate of foreclosure. SANTORUM: Yeah, I mean, it's -- it's a situation right now where obviously the market's in -- has been decimated. And so now you're looking at, how do you repair it? The problem is -- in the first place, is that several people up here, the, quote, "businesspeople," supported the TARP, supported the bailout. Governors Perry, Romney...

PERRY: Wrong.

SANTORUM: No, you wrote a letter on the day of the vote -- you wrote a letter on the day of the vote, Governor, saying to vote for the plan. That's what you -- I mean, that -- the letter's been...

PERRY: No, I didn't.

Jon Huntsman

Summary

Governor Huntsman supported the Troubled Asset Relief Program, otherwise known as TARP. When asked about a possible bailout in October of 2008, Governor Huntsman stated that it was necessary for Congress to step in and do something. He stated that he supported the proposed plan.

Gubernatorial Debate

In October of 2008, Governor Huntsman was asked about his views on a possible bailout in the Gubernatorial debate on KUED. He explains the need for a bailout and is then asked if he supports the current plan and states that he does.

HUNTSMAN: "In order to get the system working again, Congress is going to have to step in and do something. Now, we all have questions about the mechanics of how that $700 billion bailout package would work, if, in fact, we would recoup anything from that, since you're buying distressed and undervalued securities and derivatives and mortgages. You know, that's a big question mark for a lot of people. But where we go, I don't know. But I'll tell you this, the American economy is very resilient. I'd never bet against the American economy. We've been down before, we were down October of '87, we were down right after 9/11, we've been down many times in the past. We figure out how to solve the problem, we get back on our feet and we move forward."

QUESTION: "So on balance you support the bailout plan right now?"

HUNTSMAN: "I do."

Michigan Economic Debate

On November 10, 2011 Governor Huntsman participated in the Michigan economic debate. He pledged to never again bail out banks.

HUNTSMAN: Let me just say that I want to be the president of the 99 percent. I also want to be the president of the 1 percent. This nation is divided, and it's painful, and it is unnatural for the most optimistic, blue-sky people this world has ever known. We are problem-solvers.

When I hear out the people who are part of the Wall Street protests, I say, thank goodness we have the ability to speak out. I might not agree with everything they say. I don't like the anti- capitalism messages.

But I do agree that this country is never again going to bail out corporations. I do agree...

(APPLAUSE)

Thank you. I do agree that we have blown through trillions and trillions of dollars with nothing to show on the balance sheet but debt, and no uplift in our ability to compete, and no addressing our level of unemployment.

HUNTSMAN: And I do agree that we have institutions, banks that are too big to fail in this country. And until we address that problem -- we can fix taxes. We can fix the regulatory environment. We can move toward energy independence. So long as we have instant banks (ph) that are too big to fail, we are setting ourselves up for long-term disaster and failure.

HARWOOD: So, Governor, you agree with Governor Romney that the bailout that Governor Snyder supports in Michigan was a mistake?

HUNTSMAN: The bailout here in the auto sector, $68 billion worth, we are going to end up footing a bill -- Governor Snyder knows that -- of probably $15 billion when all is said and done. I don't think that's a good use of taxpayer money.

Instead, there ought to be some way of taking the auto sector through some sort of reorganization, get them back on their feet. The people in this country are sick and tired of seeing taxpayer dollars go toward bailouts, and we're not going to have it anymore in this country.

...

HARWOOD: Governor Huntsman, I want to go back to the issue that you raised before about too big to fail. If anything, that problem has gotten worse since the financial crisis than before. The 10 biggest bank holding companies in this country now hold nearly 90 percent of all the assets in the banking system, up from 75 percent in 2006.

So, what would you do? Would you break up the banks to remove the risk, or diminish the risk for American taxpayers?

HUNTSMAN: Let me just say, on the housing discussion here, lost in all of this debate is the fact that there are people tuning in tonight who are upside down in terms of the financing of their homes. They are feeling real pain. People who probably heard today that they lost a job.

These issues are very real. They are complicated. For us to say that there is an easy solution to housing, that's just not right, and that's not fair. The economy does have to recover in order for the housing market to pick up its slack and for us to get on to housing starts, which ought to be 15 percent of our nation's GDP, and today it's two percent.

With respect to the banks that are too big to fail, you know today we've got, as I mentioned earlier, six institutions that are equal to 60, 65 percent of our GDP, $9.4 trillion. They have an implied guarantee by the taxpayers that they will be protected. That's not fair, that's not right for the taxpayers.

HARWOOD: So you break them up?

HUNTSMAN: I say we need to right-size them. I say, in the 1990s, you had Goldman Sachs, for example. That was $200 billion in size. By 2008, it had grown to $1.1 trillion in size. Was that good for the people of this country, or --

HARWOOD: Well, how would you accomplish that? How would you right-size that?

(CROSSTALK)

HUNTSMAN: I think we ought to set up some sort of fund. I think we ought to charge some sort of fee from the banks that mitigates the risk that otherwise the taxpayers are carrying. There has got to be something that takes the risk from the taxpayers off the table so that these institutions don't go forward with this implied assumption that we're going to bail them out at the end of the day. That's not right, and it's not fair for the taxpayers of this country.

No data available for this representative.