Archives for May 2010

May 10th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned Federal Reserve Chairman Ben Bernanke for “lying about the Fed participating in a bailout of Europe in response to the rapidly escalating sovereign debt crisis,” and called for a Congressional investigation into the Fed, including the passage of a complete audit of the central bank.

“Fed Chairman Ben Bernanke assured the Congress that the Fed had no plans to bail out Greece and other European countries,” Wilson said, “and now here we are, and the Fed and the ECB are basically printing money to purchase worthless junk bonds from nations that are so bankrupt that nobody will buy their debt anymore.”

In February, Congressman Ron Paul (R-TX), who proposed and had passed a House version of a Federal Reserve audit, questioned Fed Chairman Ben Bernanke about whether the central bank was planning to engage in a bailout of Greece.

At the time, Bernanke said, “we have no plans whatsoever to be involved in any foreign bailouts or anything of that sort.”

According to the Wall Street Journal, “the U.S. Federal Reserve said Sunday that it would revive an emergency lending program used during the financial crisis. The Fed will ship billions of dollars overseas through foreign central banks, including the ECB, so they can, in turn, lend the money out to banks in their home countries in need of dollar funding.”

Wilson said, “Now we know Bernanke lied when he said the Fed would not bail out Europe. Yesterday, the Federal Reserve agreed to send billions of dollars to European foreign central banks, including the European Central Bank. Clearly there were contingency plans in place that Bernanke did not disclose to Congress.”

The Fed program comes as the European Central Bank (ECB) announced a program to purchase European government bonds, and the European Union and International Monetary Fund announced a wider €750 billion bailout for the entire continent.

Wilson urged Congress to investigate the Fed Chairman “to find out when the bailout of Europe was planned” and to complete plans to audit the Federal Reserve. He also denounced Senator Bernie Sanders (I-VT) for weakening a plan to conduct a full audit of the Federal Reserve as an amendment to the Dodd financial takeover bill.

“Bernie Sanders is a sellout,” Wilson declared, “His weakened amendment will still shield from public oversight the Federal Reserve’s transactions with foreign central banks and governments, including yesterday’s announced Fed participation in the trillion-dollar European bailout.”

Under current law, the Government Accountability Office, according to 31 USCA §714(b), cannot audit and exempts from public oversight the following activities of the Federal Reserve:

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items.

The original Sanders amendment would have lifted these restrictions. “Under the weakened Sanders amendment the European bailout is a transaction that will be protected from any public oversight and accountability,” Wilson explained.

“The Fed is bailing out Europe, and the American people have a right to know everything about it. The Senate must adopt the original Sanders amendment to completely audit the Federal Reserve, and Congress as a whole must now investigate how widespread these foreign bailouts by the central bank really are. Now, more than ever, the Fed must be completely audited,” Wilson concluded.

Attachments:

Original Sanders Amendment to the Dodd Bill, SA 3738, sponsored by Senator Bernie Sanders, and cosponsored by Senators Russ Feingold, Jim DeMint, Patrick Leahy, John McCain, Ron Wyden, Chuck Grassley, Byron Dorgan, David Vitter, Barbara Boxer, Sam Brownback, James Risch, Roger Wicker, Lindsay Graham, Orrin Hatch, Mike Crapo, Robert Bennett, and Jim Bunning.

Interview Availability: Please contact Rebekah Rast at (703)383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 10th, 2010, Fairfax, VA—Bill Wilson, President of Americans for Limited Government (ALG), will be available to comment on the potential nomination of Solicitor General Elena Kagan to the U.S. Supreme Court.

“Elena Kagan is an unknown quantity with nothing in her record to recommend her to the highest court in the land. She’s never been a judge, and devoid of any examples, Senators will be hard-pressed to determine exactly what her judicial philosophy is,” Wilson said.

“President Bush’s nomination of Harriet Miers’ was withdrawn for the same exact reason, and rightly so,” Wilson added.

ALG has been a leading voice in opposition to the Appeals Court nomination of Goodwin Liu and other high profile radical nominees to the federal courts, and has become a trusted source for analysis from an independent, limited government perspective.

To schedule Bill Wilson for a radio or television interview, please contact Rebekah Rast at 703-383-0880, for print interviews, please contact Richard Manning at 703-383-0880.

###

Suddenly, The New York Times is exorcised and agitated about potential conflicts of interest within the Food and Drug Administration (FDA’s) committee structure. Some of the scientists serving in policy advisory positions could be unduly motivated to make recommendations on the basis of their own financial interests, a recent editorial warns. Stipulations are already in place to guard against conflicts that may open the way to decisions that are not in the public interest.

Ideally, there should no waivers but agency has made some recent progress, editorial points out. Whereas the FDA had been granting waivers to more than 15 percent of the members, it is now granting waivers to less than 5 percent. Although The Times articulates a legitimate concern, it appears to be feigned and not real.

Even as it huffs and puffs about potential conflicts, the editorial neglects to mention that the FDA has set up a panel on menthol with the aim of outlawing it in cigarettes. The panel is stacked with people who have a clear bias. In many instances they would stand to profit from the prohibition that is being entertained. This raises some questions.

If The Times has such faith in its editorial stance, why the sleight of hand? If there’s a bias at work here against certain products in deference to others, shouldn’t this find its way in the editorial? It would appear the outrage is highly selective and agenda driven.

“An important panel set up by the FDA has a near majority of its voting members getting paid by special interests who have billions of dollars riding on the outcome of the committee’s ultimate decision,” Bill Wilson, President of Americans for Limited Government, observed. “This is ludicrous.”

“The Obama administration continues its rhetoric about a balanced, objective approach to science – an approach that sets aside agendas and emphasizes science – but we keep finding that special interests trump scientific findings,” he continued. “On this advisory pane, the heavy influence of big pharmaceutical companies is overwhelming. Pharmaceutical companies stand to make huge profits if the committee takes certain actions like banning menthol.”

• Jack Henningfeld a voting member of the committee is a consultant to GlaxoSmithKline the maker of Nicorette gum who would stand to benefit financially from further restrictions on tobacco products

• Neil L. Benowitz was Pfizer consultant which makes the drug Chantix that aids people who want to quit smoking. Benowitz has also worked for GlaxoSmithKline and Nabi Pharmaceuticals

• Dorothy Hatsukami received grant support <http://phx.corporate-ir.net/phoenix.zhtml?c=100445&p=irol-newsArticle&ID=1048442&highlight> from Nabi Pharmaceuticals to study their nicotine vaccine

• The head TPSAC, Jonathan Samet, also received grants from GlaxoSmithKline and the organization he headed was funded by two different pharmaceutical companies.

“Remarkably, The Times could have inserted a few lines from its own reporting to provide readers with some perspective on the tobacco panel,” noted Kevin Mooney, the TimesCheck editor. “They are entitled to take whatever editorial stance they want. But when they go out of their way to avoid mentioning and highlighting conflicts that bedevil their policy goals, it gives good cause to wonder about what is omitted in the other reports.”

Attachments:

FDA Conflicts are Wrong Except Where they Advance New York Times’ Agenda, Kevin Mooney, May 7th, 2010:
http://timescheck.com/2010/05/07/fda-conflicts-are-wrong-except-where-they-advance-nyt-agenda/

Experts, Conflicts and the F.D.A., New York Times, May 4th, 2010: http://www.nytimes.com/2010/05/05/opinion/05wed3.html

F.D.A. to Examine Menthol Cigarettes, New York Times, March 29th, 2010: http://www.nytimes.com/2010/03/30/business/30tobacco.html

###

“The McCain amendment is the very definition of leadership,” Wilson declared. “It is an example of a mature adult examining a problem, and offering the only responsible solution. The McCain amendment simultaneously addresses many of the root causes of the crisis and takes taxpayers off the hook for the ongoing bailout of Fannie and Freddie, which has already cost $126 billion.”

Wilson appealed to Senators, “This is the line in the sand. If you are for the McCain amendment, you truly are standing with American taxpayers in addressing the root causes of the crisis and steadfastly against the unlimited bailout of the Fannie and Freddie. To be against it is, on the other hand, is to declare yourself a looter and unindicted co-conspirator in the theft of America.”

Wilson outlined the policies pursued by the GSE’s that he said contributed to the crisis, citing research by former Chief Credit Officer of Fannie Mae, Edward Pinto. Those include taking on some $1.835 trillion in higher-risk mortgages and mortgage-backed securities just before they were nationalized. This included high risk loans in whole loan form, most of which, $1.646 trillion, were GSE-issued mortgage-backed securities, and $189 billion of subprime and Alt-A private mortgage-backed securities.

According to Pinto, because of the implicit backing of taxpayers, Fannie and Freddie securities were automatically given AAA credit ratings. Because of that shielding from scrutiny, Fannie and Freddie were able to misrepresent the quality of mortgages that underlined those securities.

Wilson added, “Because of the implicit backing of taxpayers, Fannie and Freddie crafted a marketing plan that enabled them to sell some $4.7 trillion of mortgage-backed securities, $1.5 trillion of which were sold overseas to investors, as reported by the New York Times.”

“By promising a higher rate of return than treasuries, but with the same risk associated with a taxpayer guarantee, the sales flooded the GSE’s throughout the housing bubble. As more securities were sold, Fannie and Freddie bought more mortgages and bundled them into securities. As a direct result, Fannie and Freddie were able to acquire about half of all mortgages as of July 2008,” Wilson explained.

According to the Wall Street Journal, the McCain amendment “mandates that the current government conservatorship of Fan and Fred will end within 30 months. In the meantime, the companies will have to reduce their mortgage portfolios by 10% each year” and if the conservatorship failed the GSE’s “would then go into receivership and be liquidated.”

If the GSE’s can be rendered solvent and “can survive on their own, they would have three years before the expiration of their federal charters, during which time they would have new operating restrictions” including reducing “mortgage assets held on their books by nearly 50% within two years and raise their capital standards.”

The McCain amendment would also “repeal the affordable housing goals previously legislated for Fan and Fred and which contributed to their terrible mortgage bets,” reports the Journal. According to Pinto, from 1992 onward, the Department of Housing and Urban Development (HUD) loosened lending standards by imposing “affordable housing goals” on Fannie Mae and Freddie Mac, adopted “Fair Lending Best Practices” requiring low-income lending, and promulgated new Community Reinvestment Act “regulations applicable to all insured banks, in particular a change from a qualitative standard to a quantitative.”

Also, under the amendment, as reported by the Journal, the GSE’s would “have to start paying state and local sales taxes, lose their exemption from full registration at the Securities and Exchange Commission when they issue securities, and start paying fees to repay the taxpayer for the value of federal guarantees.”

The amendment would also reinstate the $400 billion limit of assistance from the government and “for as long as they are in federal conservatorship or receivership, they would have to be included in the federal budget.”

Wilson said that including the GSE’s on the federal budget was “essential to preserving creditworthiness of the United States.”

Wilson concluded, “The only responsible act for Congress is to rein in and unwind the government control over Fannie Mae and Freddie Mac, to restore honesty to the nation’s balance sheet, and require that taxpayers are paid back for the ongoing bailout of the GSE’s that has cost more than $126 billion since it began in 2008. Senator McCain’s amendment accomplishes these goals.”

Attachments:

SA 3839, McCain amendment to the Dodd bill, May 5th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 5th, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today blasted provisions of the Dodd financial takeover bill that “put the ‘preservation of financial stability’ ahead of an individual’s right to privacy.”

“This is basically the creation of a financial intelligence agency to monitor all economic activity in the country without regards to an individual’s reasonable expectation of privacy, and it must be stopped,” Wilson declared.

Wilson pointed to provisions establishing an Office of Financial Research (OFR) and those allowing a Consumer Financial Protection Bureau (CFPB) to monitor every bank account in the country as “going way too far into areas the government has no business, nor any constitutional authority to implement, giving the government the power to monitor every financial transaction in the country.”

ALG today released a backgrounder outlining these provisions in the bill.

According to the American Spectator, a Senate committee source stated, “As we read this legislation, the CFPB could mine for whatever data they want, bank card activities of a subset of American citizens, credit card debt and payment patterns, who is spending money on whatever… And if the business community isn’t already scared out of their minds, they should be.”

According to the bill, the OFR would be tasked with the power to “collect, validate, and maintain all data necessary” to maintain financial stability. The OFR would obtain information from “member agencies, commercial data providers, publicly available data sources, and financial entities.”

Wilson said “The OFR could monitor banks, large and small, and would possess an unlimited authority to monitor all financial activities, including deposits, withdrawals, account transfers, and trading by investors, large and small, through stock exchanges, securities exchanges, commodities exchanges, and the like.

“In short, under the Dodd bill, the OFR could monitor every economic activity in the country,” Wilson explained.

The OFR could “require the submission of periodic and other reports from any financial company for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States.”

The Director of the office would be given subpoena power to require “the production of the data requested” of an entity upon a written declaration by the Director of the OFR.

“All the Director of the OFR would need to do is cite that the information requested was necessary for the maintenance of financial stability,” Wilson explained.

According to the bill, the OFR would be tasked with “collecting data on behalf of the Council, and providing such data to the [Financial Stability] Council and member agencies… [and] making the results of the Office available to financial regulatory agencies.”

The technology and software developed for monitoring the financial system, and the data it produces, would be also shared with the Council and member agencies. The Office will be funded off-budget through assessments levied on the $50 billion and larger financial and non-financial companies supervised by the Federal Reserve.

Wilson said, “Therefore, the Office will have an unlimited budget to put together military-grade technology to monitor the financial system, and whatever activities it wants, including trades, transactions, deposits, and withdrawals.”

Wilson concluded, “None of the information the OFR will be gathering will ‘protect’ anyone; it will only be used to preserve the government’s maintenance of power over the financial system.  This is just way too much power to vest in government. Not even U.S. intelligence agencies have this much power upon U.S. citizens, and they’re tasked with preserving national security and protecting the homeland from actual physical assault.”

Attachments:

“Big Brother is Watching You: The Threat Posed by the Dodd Bill to Privacy,” May 5th, 2010.

“’Down a Rabbit Hole:’ The Threat Posed by the Dodd Bill to the Private Sector,” April 30th, 2010, Americans for Limited Government.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 4th, 2010, Fairfax, VA—Americans for Limited Government (ALG) called on the Inspectors General of both the U.S. Department of Justice and the U.S. Treasury Department to investigate an apparent criminal violation of the Internal Revenue Code by either members of the Florida IRS or U.S. Attorney’s offices.

The case revolves around April 20, 2010 Miami Herald reports claiming, “the IRS is also looking at the tax records of at least three former party credit card holders — former Florida House Speaker Marco Rubio, ex-state party chairman Jim Greer and ex-party executive director Delmar Johnson — to determine whether they misused their party credit cards for personal expenses, according to a source familiar with the preliminary inquiry.”

ALG President Bill Wilson warned, “the danger of the IRS becoming a public relations weapon against private citizens is real, and I thought we learned from the days when Richard Nixon was president that even the appearance of using them for political intimidation purposes would not be tolerated.”

The timing of the newspaper leak is particularly troubling due to its relationship to politics in the state of Florida. Governor Crist decision to drop his Republican primary campaign in favor of an Independent run for the U.S. Senate may have been influenced by this politically motivated leak.

ALG Counsel Nathan Mehrens notes, “Anyone who is a regular follower of law enforcement activity knows that the typical response from law enforcement agencies is to ‘neither confirm nor deny’ when asked about current investigatory activities.”

Mehrens continues, “In the context of tax information and investigations into tax issues federal law prohibits the release of many types of information.”

The Internal Revenue Code states that it is a felony punishable by a $5,000 fine and up to five years in prison to “willfully disclose to any person except as authorized in this title, any return or return information.”

Attachments:

Letter to DOJ Inspector General, Americans for Limited Government, April 27th, 2010.

Letter to IRS Inspector General, Americans for Limited Government, April 27th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 4th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today demanded that the U.S. Senate adopt an amendment by Senator Bernie Sanders (I-VT) that would audit the Federal Reserve Board of Governors and regional Reserve Banks, saying “the American people have a right to know, and Congress a duty to know how the nation’s central bank operates to ensure that the Federal Reserve has been a responsible steward of the nation’s monetary policy.”

“The shroud of secrecy at the Federal Reserve needs to come to an end,” Wilson declared.

“The lack of transparency at the Federal Reserve helped to contribute to the financial crisis. If markets had more reliable information regarding the nation’s monetary policy, including which firms are dependent on Federal Reserve subsidies, systemic risk within the system could be identified by markets, instead of kept under a shroud of secrecy as under the current system,” Wilson explained.

Wilsons said that the Federal Reserve was “one of the principal actors” that caused the financial crisis: “By keeping interest rates too low for too long, the Fed accommodated the inflation of the housing bubble throughout the 1990’s and 2000’s by pumping easy money into the system.”

Wilson cited research by Stanford economist John Taylor who in a recent Wall Street Journal column wrote, “the Fed’s target for the federal-funds interest rate was well below what the Taylor rule would call for in 2002-2005. By this measure the interest rate was too low for too long, reducing borrowing costs and accelerating the housing boom. The deviation from the Taylor rule, which had characterized good monetary policy during the previous two decades, was the largest since the turbulent 1970s.”

Wilson said the Sanders amendment, despite objections raised, was limited in terms of the impact it would have on the exercise of monetary policy. “The Dodd bill does nothing to rein in the Fed’s ability to manipulate markets, and neither would the Sanders amendment,” Wilson said.

Wilson clarified, “What it would do is give Congress and the American people a means to ascertain the full scope of the Fed’s role in market interventions prior to and throughout the crisis.”

Wilson said that as the capital the Fed provided through the banking system helped to create the housing bubble and “disproportionately contributed the rise of the nation’s money supply.” In 1990, outstanding mortgage debt held was $3.805 trillion. By the end of 2007, total mortgage holdings had risen to $14.568 trillion, a monumental 282 percent jump of $10.763 trillion in new mortgages. During that same period, according to the True Money Supply index from the Ludwig Von Mises Institute, the money supply rose from about $1.787 trillion at the end of 1990 to about $5.268 trillion by the end of 2007, an 195 percent increase of $3.481 trillion.

In addition, Wilson said the Federal Reserve’s role since the crisis began in 2007 is “very unclear.”

According to Bloomberg News, the Federal Reserve had committed over $7.76 trillion for the bailout. However, it is unclear who received loans from the Federal Reserve, or who will receive the remainder of the committed funds.

Wilson explained, “Nobody can account for about $2 trillion of loans made by the Fed. The reason is because the Fed has consistently stonewalled the press, Congress, and even courts of law. And because law exempts most of the institution from being audited by the GAO.”

Wilson cited that the Government Accounting Office, according to 31 USCA §714(b), cannot audit and exempts from public oversight the following activities of the Federal Reserve:

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items.

According to Bloomberg, “The Federal Reserve so far is refusing to disclose loan recipients or reveal the collateral they are taking in return.” The Fed has argued it is actually allowed to withhold “internal” memos as well as commercial and trade secrets information. Bloomberg, on the other hand, has actively filed a Freedom of Information Act (FOIA) request, demanding the information.

Thus far, the Fed’s Board of Governors has refused to comply with Bloomberg’s FOIA requests, despite a court ruling in Bloomberg’s favor. The Fed’s regional Reserve Banks have argued that they are private institutions beyond the reach of the Freedom of Information Act.

The Southern District Court of New York has ordered that the Federal Reserve Board of Governors comply with Bloomberg News’ Freedom of Information Act (FOIA) request to produce the details of some $2 trillion in emergency loans that were made. This includes who received the $2 trillion of loans, the terms under which they were received, and what collateral was taken by the Reserve branches in exchange for the loans.

The Federal Reserve is appealing this ruling, and has thus far refused to comply.

In answering questions from Congressman Alan Grayson (D-FL) last year, Fed Inspector General Elizabeth Coleman testified she could not account for “$1 trillion-plus that the Fed extended and put on its balance sheet since last September…”

An email to Bloomberg by Coleman’s office also revealed that “By law, we are the Office of Inspector General for the Board of Governors only… Consistent with our authority, we cannot conduct a direct audit of Reserve Bank operations.”

Wilson concluded, “The American people have a right to know just what has gone wrong with the nation’s monetary policy, how it contributed to the financial crisis, and what the true extent of the Fed’s relationship with financial institutions, foreign banks, and foreign central banks really is.”

Attachments:

Sanders Amendment to the Dodd Bill, SA 3738, sponsored by Senator Bernie Sanders, and cosponsored by Senators Russ Feingold, Jim DeMint, Patrick Leahy, John McCain, Ron Wyden, Chuck Grassley, Byron Dorgan, David Vitter, Barbara Boxer, Sam Brownback, James Risch, Roger Wicker, Lindsay Graham, Orrin Hatch, Mike Crapo, Robert Bennett, and Jim Bunning.

Interview Availability: Please contact Rebekah Rast at (703)383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###

May 3rd, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today dismissed an amendment offered by Senator Barbara Boxer (D-CA) to the financial takeover bill as “doing nothing to prevent future bailouts, and instead will guarantee that they occur.”

“Senate Democrats need to stop lying to the American people about what is in this legislation. The Boxer amendment will do nothing to prevent unlimited bailouts to creditors that will ultimately be paid for by the American people,” said Wilson.

“Senator’s Boxer’s amendment is being presented as if it removes the unlimited bailout authority from the Dodd bill, but it leaves in place the ability of the government to put a company into receivership, fully compensate its creditors and recapitalize it, all with the bailout fund, which the amendment will not remove from the bill,” Wilson explained.

“Then, the bailed-out company, under a new name, could be sold back to the creditors who were already bailed out from the fund in the first place,” Wilson added. “That’s a bailout.”

The Boxer amendment states that any company put into receivership by the Federal Deposit Insurance Corporation (FDIC) must be “liquidated,” but in an oped published this morning, Wilson wrote, “the ‘orderly liquidation fund’ is so broadly established that it even allows the FDIC to operate any company while in receivership, including all staffing decisions and the composition of the board of directors.”

The oped continues, “The FDIC could [also] reorganize the company as a ‘bridge financial company,’ whose board of directors is appointed by the FDIC, and the ownership of the company transferred to the new company by the FDIC. The new company, at the discretion of the FDIC, can then issue capital stock and securities.”

Wrote Wilson, “That is a lot more like a Chapter 11 reorganization of company than a Chapter 7 liquidation, except that it can be completely financed by the unlimited fund. That’s because it’s a bailout.”

The controversy over the Boxer amendment came amid reports that there would still be more amendments to remove the bailout provisions. According to the New York Times, “Mr. Dodd and Senator Richard Shelby of Alabama, the senior Republican on the banking panel, said they may introduce a joint amendment early this week that would ease Republican complaints that the measure would still allow government bailouts of economically endangered firms.”

Wilson asked, “If the Dodd bill does not contain bailouts, and if the Boxer amendment would ‘prevent’ bailouts, why are now Senators Shelby and Dodd working on another amendment to remove the bailout provisions?”

Wilson answered, “Because the Boxer amendment does not prevent bailouts inherently contained in the Dodd bill.”

The Boxer amendment contains a provision stating that “No taxpayer funds shall be used to prevent the liquidation of a financial company,” which Wilson called “meaningless.”

“Everybody knows that the unlimited bailout fund is financed by assessments on about sixty bank holding and insurance companies already. The fact is, as noted by a recent Congressional Budget Office Study, the American people are going to be the ones who pay for it, with higher costs on financial transactions, bank fees, and the like,” Wilson said.

According to the CBO study, “the ultimate cost of a tax or fee is not necessarily borne by the entity that writes the check to the government. The cost of the proposed fee would ultimately be borne to varying degrees by an institution’s customers, employees, and investors…”

The Senate is expected to vote on the Boxer amendment today.

Attachments:

“’Down a Rabbit Hole:’ The Threat Posed by the Dodd Bill to the Private Sector,” April 30th, 2010, Americans for Limited Government.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

###