Michele Bachmann - TARP

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.

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