THIS is what Nancy Pelosi is proud of?

Speaker Pelosi is striding around Capitol Hill as though she is responsible for a marvelous piece of proposed legislation: Emergency Economic Stabilization Act of 2008 (Adobe PDF).

"We sent a message to Wall Street: The party is over," Pelosi told reporters at the U.S. Capitol early Sunday evening. Standing with other senior House and Senate Democrats, Pelosi said the bill legislation posted on her office's Web site reflected the final legislation, which she hopes the House will take up tomorrow. Senate Majority Leader Harry Reid, R-Nev., said the Senate would move promptly after the House had acted. [source]

Believe me, Speaker Pelosi, "Wall Street" knew the party was over long before the House you lead got around to doing anything about the situation, and long before your counterpart and pal Senate Majority Leader Reid chimed in. And the problems facing the financial markets are real. The question is, is this legislation you are so proudly touting anything more than a skimpy expensive band-aid?

This is the summary released by Speaker Pelosi's office, with annotations by me.

SUMMARY OF THE "EMERGENCY ECONOMIC STABILIZATION ACT OF 2008"

I. Stabilizing the Economy

The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets. [So, the Speaker  is proud of giving (up to) $700 BILLION of taxpayper money to Treasury Secretary Paulson so that he can use the money to protect BANKS AND OTHER INSTITUTIONS THAT HOLD MORTGAGES, a move that may or may not trickle down to "working families" and others mentioned. Considering how wonderfully it has turned out for the working families/small business owners when these institutions were flush, one wonders whether propping up those same institutions with billions of tax dollars paid by families/small businesses is not rather an ironic circle.]

II. Homeownership Preservation

EESA requires the Treasury to modify troubled loans - many the result of predatory lending practices - wherever possible  to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes. [After the banks and mortgage lenders get up to $700 billion dollars the Treasury Department will provide direct assistance to American homeowners, who may or may not have been preyed upon, "wherever possible"? Say what? "Wherever possible"? Where will Secretary Paulson consider such help possible? Where will his successor, who could easily be another Republican appointee, consider such help possible?]

III. Taxpayer Protection

Taxpayers should not be expected to pay for Wall Street's mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions. [Need to read the full text of the relevant provisions to assess this as the summary gets very vague here.]

IV. No Windfalls for Executives

Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits "golden parachutes" and requires that unearned bonuses be returned. [The LEAST that should be and could have been done.]

V. Strong Oversight

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse. [Under Speaker Pelosi, the House has passed bill after bill favored by the current President. Why should we think that a House led by her will not give the President everything he wants any time he wants it? Remember, this is a Democratic Speaker who took office saying "Impeachment is off the table" in reference to a President that many of us believe has been responsible for war crimes.]

Ok, so much for my thoughts about the summary and whether Speaker Pelosi should be crowing about this proposed legislation. After all, I am on record as somebody who is not a fan of her judgment and conduct.

Senator Obama, on the other hand, presumably thinks more highly of Speaker Pelosi's political judgment than I do, since she played a key role in wangling his spot on the Democratic ticket. His reaction to EESA:

In an interview Sunday morning on CBS' "Face the Nation," Obama said he had not reviewed the language of the latest proposal, but said if the core principles he put forth were incorporated into it, his "inclination" would be to vote for it; but he added "I'm not happy about it. We should have never gotten into this place in the first place." [source]

Well, Senator Obama, Speaker Pelosi has been in the House getting us into this place for over 20 years, the last seven or so as Speaker. Are you happy she's helped you get into your place today?

Update: Today's Wall Street Journal has a particularly interesting article that includes information about Congress's role in creating the current mess.

Comments

[glennmcgahee]

I think with the 700 billion, most likely 1 trillion dollar bailout, that Pelosi's offering will actually cause the party to begin.
Just imagine if you had failed at just about everything and along comes a white knight throwing dollars everywhere. Champagne all around for everyone in Washington, courtesy of Wall Street.

[jennifer broder-jones]

I am appalled at Speaker Pelosi's remarks. She and Congressman Frank( who definitely was asleep at the wheel) have some nerve,.....Wake up. you couldn't even get enough votes to the table to pass the bill on your own side so quit blaming the republicans. I wish for the days of our for fathers that had the guts to stand up for what they believed in. Shame on you all. If it were up to me I would fire you all and start over. You bring shame on this great nation and on the men that started this country. Get over yourselves and do what is right and learn to put politics aside. You are an embarrassment to your position.

[Harley Schlanger]

Neither Pelosi nor Barney Frank were "asleep at the wheel." They were acting on behalf of the financial predator's wing of the Democratic Party, headed by mega-speculator (and leading sugar daddy to Obama) George Soros, and Felix Rohatyn, formerly an advisor to Lehman Bros. This is the anti-FDR wing of the Democratic Party, which could not tolerate the thought of Sen. Clinton in the White House.

[ainnj]

Interesting how four of the Democratic Illinois representatives, including jesse jackson, jr. voted against the bailout. isn't jackson part of obama's campaign "team"? What a complete and disgusting joke our leaders have become on both sides of the aisle.

[twandx]

Those Dems are outdoing themselves in rising TO the gutter once more. Pelosi and Obama - only hope for future is that they go down to defeat.

[Minty]

You folks are not getting the seriousness of the problem. Everyone of these yahoos are responsible in their own way. Each one cried to regulate the others pet project and that includes Alan Greenspan. Greenspan called for the reigning in of Fannie and Freddie while unregulated credit swap derivatives were untouchable. Credit swap derivatives is a form of insurance fraud. You buy an insurance policy against your losses in the market. The person that sold you this "policy" collects your fees but is not required to back amount of the "policy" with any "assets". Thus the hedge funds at banks went belly up when they had no assets to pay out plus added the stress of bad mortgages. They are still out there unregulated and not backed by any assets. We can also bring in personal credit card debt.(look where Biden gets his bread buttered) Americans hold more personal credit card debt than the combined debt of the 50 poorest countries.
Forget about the stock market right now unless you are nearing retirement. Read this:
http://www.reuters.com/article/marketsNews/idUSPEK16693720080925
Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

[SalG]

We need to get stability in our financial system. I'm afraid if Congress does not do it then the Bush administration will find a new "executive power" to use.

[Tessa Gordon]

thanks heidi foir that necessary analysis.
As my economist cousin and ex wall street correspondent in London wrote:
"..noticed that Nancy P cocked up again, thus contributing to the crash."