Schauer calls for Bank of America's $45 billion in repaid bailout funds to pay down deficit All Am
The Wall Street bailout should have been about getting capital out on Main Street and job creation and not about helping banks improve their balance sheets,” said Schauer. “Far too many businesses in Michigan still can’t get a loan to invest in capital or hire more workers, while taxpayers have been stuck with the $700 billion bill. To get our economy back on track we need to focus on creating jobs and reigning in the deficit, and using these funds to repay taxpayers is a great way to do both.”
Earlier this year, in one of his first major votes in Congress, Rep. Schauer voted to reject the release of the second $350 billion under the Emergency Economic Stabilization Act of 2008, also known as the Wall Street bailout.
Following last week’s announcement that Bank of America would repay its $45 billion loan, the Washington Post reported that the move would, “terminate the federal pay restrictions that have inhibited its search for a new chief executive… Repaying the government in full would allow Bank of America to pay its next chief executive however many millions the board sees fit.” [Washington Post, 12/3/09]
“It appears Bank of America is anxious to pay back these funds not because of its concern to American taxpayers, but because it wants to escape reasonable limits on executive compensation,” said Schauer. “Reckless bonuses and multi-million dollar compensation packages to run a failed bank that was only kept alive by American taxpayers does not represent the kind of reform we need on Wall Street.”
A copy of the letter to Secretary Geithner is available below:
The Honorable Timothy F. Geithner
United States Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner:
As you know, our country is facing enormous pressures on our deficit and we firmly believe that serious efforts must begin immediately to bring our nation back to fiscal sustainability. The Emergency Economic Stabilization Act of 2008 authorized Treasury to spend $700 billion to rescue our financial system from collapse.
The vast majority of those funds have, unfortunately, been directed to Wall Street firms that were directly, indisputably responsible for the economic crisis that has seen trillions of dollars evaporate from our economy and pushed unemployment levels to unbearable heights.
While hedge fund managers and investment brokers have been able to keep their jobs, reap financial bonuses, and enjoy all the benefits of this welfare for the wealthy, middle class and working class families are being pushed out of their homes, facing spiraling debt, and struggling to make ends meet.
In the meantime, our unsustainable debt leaves us held hostage to the goodwill of foreign countries whose economic interests are often at odds with our own. All across the country, families are rightly concerned about the long-term risks of heightened inflation, which acts as a regressive tax, diminishing the value of workers' hard-earned dollars.
Recent news reports indicate that Bank of America will repay its $45 billion loan from American taxpayers. This is welcome news, but the Department of Treasury must prevent these returned dollars from acting a slush fund for Wall Street bankers. Therefore, we are calling on you to immediately return this money to taxpayers by fully committing the returned $45 billion to paying down our deficit.
We look forward to your immediate response on this issue, which is so important to the American people.
Member of Congress
Source: Congressman Mark Schauer
Tuesday, December 8, 2009
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