“Senate Majority Leader Harry Reid is going to ram the bill through before support drops to the single digits. It’s a race,” Wilson said.

Rasmussen Reports released a poll yesterday showing only 37 percent of the American people supporting the legislation, with 43 percent now opposed. This follows an increasing wave of opposition to the bill, which passed the House last week with a price tag of $819 billion, or $1.2 trillion over a decade with interest.

“This trillion dollar spending spree by Congress to claim they ‘did something’ for the economy is a rotting carcass,” said Wilson.

“The public is growing wise to what their Congress is up to, and they know it stinks,” Wilson added.

Wilson noted that even if the legislation does pass the Senate today, it will not reach the President’s desk until next week the earliest.

“The House and Senate still would need to reconcile their two bills in a conference committee,” Wilson said. “And if past experience is any indication, the bill, which already contains plenty of wasteful provisions that will not stimulate sustainable economic growth, will only get worse.”

The bill contains provisions to balance state government budgets, expand Medicaid, boost education spending, food stamps and unemployment benefits, build federal buildings, provide more for public housing, construct climate change supercomputers, erect trade barriers overseas, create refundable tax credits, and other provisions that Wilson believes are “nothing more than special interest handouts.”

Yesterday, 18 free market and limited government leaders released a joint letter critical of provisions in the legislation already passed by the House of Representatives.

“They need to know that there is still time to tell their Senators to vote ‘no’, and that even if the bill passes today, there will still be yet more time to tell both the House and the Senate to vote ‘no’ on the conference report,” Wilson added.

Wilson believes that by that time, public opposition and protest against the legislation will reach a fever pitch.

“Time is not on Congress’ side right now. And there will undoubtedly be political consequences for anyone that votes for this trillion dollar turkey,” Wilson concluded.

# # #

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

The joint letter is critical of provisions in the legislation already passed by the House of Representatives, and leaders believe it will not boost the economy.

“The irresponsible expansion of the budget to bail out state governments from their own budget deficits, expand Medicaid, boost education spending, food stamps and unemployment benefits, build federal buildings, provide more for public housing, construct climate change supercomputers, erect trade barriers overseas, create refundable tax credits, and make special interest payouts will not stimulate sustainable economic growth,” according to the letter.

The letter calls for permanent tax relief for businesses and individuals. The leaders believe that “individuals and businesses only change their spending and investment habits significantly when they expect policy changes to be permanent.”

Specifically, the letter advocates “[p]reventing tax increases on individual income, capital gains and dividends, changing the tax code to allow full-cost, first-year expensing for business equipment rather than the arbitrary IRS depreciation schedule, and lowering the U.S. corporate tax rate, among the highest in the world, would yield much more bang for the buck in ensuring a rapid economic recovery than the current package of massive spending with a sliver of targeted tax cuts.

The letter portends that the U.S. “is running the serious risk that it will default on its financial obligations, as the nation’s creditors during the current economic downturn may be unable to continue sustaining the uncontrolled growth of spending, leaving the nation in financial ruin.”

The current national debt is $10.7 trillion. That includes $4.3 trillion owed for Social Security, Medicare, and other commitments, and $6.4 trillion held privately, $3 trillion of which is held overseas. 40 percent of the debt held privately comes due this year.

“The only way for the government to pay [the debt coming due] is to borrow yet more money,” the letter reads.

The organizations represented disagree with the idea that additional spending is not necessary to stimulate economic growth.

As an alternative the free market and limited government organizations call upon the Senate to deliver “a real plan for change, to finally set the nation’s fiscal house in order, to provide permanent tax relief to businesses and individuals, to free the American people from the boom-to-bust economic cycle, and to at last retire the national debt.”

Wilson believes that the legislation can be defeated in the Senate.

“The tide is clearly turning against the Obama trillion dollar debt stimulus plan,” said Wilson in a statement.

“It is now up to Senators who do not wish to engage in generational theft to stand up and make their voices heard, and vote ‘no’ on the ‘stimulus,’” Wilson concluded.

# # #

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

“Congress is only adding to the national debt, now totaling $10.7 trillion,” said Wilson. “And they do so knowing full well that the money to pay for their extravagant spending spree needs to be borrowed from elsewhere.”

The national debt of $10.7 trillion includes $4.3 trillion owed in the form of unfunded obligations to Social Security, Medicare, and other commitments, and $6.4 trillion held privately, $3 trillion of which is held overseas.

Forty percent of the debt held privately comes due this year, and most economists agree that the only way for the government to pay it is to borrow more money.

“The problems with the economy started in large part because of government excesses: too much credit, too much borrowing, too much spending, and too much debt,” Wilson said. “Only a madman would now suggest that borrowed money on this sort of scale—which needs to be paid back—would provide any long-term economic stimulus,” Wilson added.

“Instead, because of this $819 billion boondoggle, paying down the national debt will eat up an ever-larger share of the overall economy in the years to come, diverting capital from creating new jobs and enterprises,” Wilson explained.

“And, instead of fixing the problems government created, the House has now voted to make things worse by adding another $1.2 trillion to the debt when interest and other considerations are calculated,” Wilson noted.

The House voted 244 in favor, and 188 against.

Wilson believes that extraordinary government interventions to date have discouraged savings, investment, and capital creation. According to the Congressional Budget Office, even without the $819 billion spending bill, the federal deficit will rise to $1.2 trillion, or 8.3 percent of GDP, in 2009, an all-time high.

“Markets will not recover any time soon unless the government generates a real plan to pay off the debt and get rid of wasteful spending,” said Wilson.

“Instead, the House voted to increase the deficit, increase all of our children’s and grandchildren’s financial burden, increase future interest rates and taxes, and once again shackle the American taxpayer to a mountain of debt,” Wilson concluded.

# # #

“Congress is running the serious risk that the United States will default on the national debt, now nearly $10.7 trillion,” said Wilson. “Today’s bill will only add to it, and the nation’s creditors overseas may be unable to continue funding our unsustainable government spending.”

The national debt of $10.7 trillion includes $4.3 trillion owed in the form of unfunded obligations to Social Security, Medicare, and other commitments, and $6.4 trillion held privately, $3 trillion of which is held overseas.

40 percent of the debt held privately comes due this year, and the only way for the government to pay it is to borrow more money.

“The current economic downturn was caused in large part because of government policies: easy credit and loose dollar policy by the Fed, the government sponsored enterprises Fannie Mae and Freddie Mac pushed loans on those who could not afford them, and the trillions of dollars of bailouts to date have only made it worse,” Wilson said.

“Now, government returns to the scene once again, not to fix the problems it created, but to exacerbate them by adding another $1.2 trillion to the debt when interest and other considerations are calculated,” Wilson added.

Wilson believes that extraordinary government interventions to date have completely spooked markets and discouraged savings, investment, and capital creation.

“The United States will not be able to get off the road to serfdom until the government actually constructs a plan to retire the debt and put an end to big government programs that hinder economic growth,” said Wilson.

Wilson warns of hyperinflation should creditors stop lending to the United States and the nation therefore defaults on the national debt.

“This is a catastrophe waiting to happen,” Wilson warned.

“Right now, countries overseas are trading real goods for paper. But that trend will reverse should the U.S. default, because a run on the dollar will ensue rapidly. Those dollars will come back home, and the people here will want to turn those dollars into real goods, but there will be too many dollars chasing too few goods,” Wilson explained.

“That’s the perfect recipe for hyperinflation. Prices would soar, and the economy would be wrecked,” Wilson added. “America would no longer be an economic superpower.”

“This must not come to pass. Congress must stop the madness by voting ‘no’ on the so-called ‘stimulus,’” Wilson concluded.

# # #

“The Treasury and Federal Reserve have failed to accurately and satisfactorily account for the first $350 billion that has been disbursed. And Congress cannot with confidence now release the rest of the funds with no strings attached,” said Wilson.

A joint letter sent by 26 free market and limited government organizations today, which Wilson signed, also called upon Congress to pass a TARP disapproval resolution “to preserve some of the taxpayers’ assets and… spend the necessary time studying the underlying causes of the economic down-turn…”

The letter criticizes the Troubled Asset Relief Program’s execution by the Treasury. “The stated purpose of the TARP was to purchase toxic mortgage assets,” the letter reads. “Secretary Paulson abandoned this concept immediately after the signing ceremony. The TARP was also designed to reintroduce the flow of credit into the market and help stabilize Wall Street. To date, neither has been accomplished.”

Wilson believes that too easy credit and loose dollar policies, combined with too low interest rates and a desire by policymakers to give loans to those who could not afford to repay them caused the credit crisis originally.

“It was government that created the problems facing the economy today by creating asset bubbles that, once they popped, endangered the very survival of the financial system,” Wilson said.

Wilson also believes that government actions in response to the economic crisis have been based on flawed premises.

“Since the downturn began, more than $8 trillion has been pledged by government to prop up the economy, and yet, unemployment is rising and likely to rise well into this year, and government has done nothing to reform the policies that led to the crisis in the first place,” said Wilson.

“Instead, Fannie Mae and Freddie Mac were nationalized, as was AIG, the auto industry, the banks and other financial institutions, and the national debt has exploded to over $10 trillion, with no end in sight,” he added.

The letter from 26 conservative and limited government leaders criticizes Treasury Secretary Henry Paulson as having “invaded the free market, propping up some companies to the detriment of others and purchasing stock in banks without requiring accountability or transparency about the use of taxpayer funds.”

“It is up to the incoming Administration to, as the letter states, to provide ‘an accounting and detailed explanation on how the initial TARP funds have been used and the prospect of a taxpayer recovery of these funds,” said Wilson.

“Until then, if they cannot account for the last $350 billion, there is no way Congress should release the next $350 billion,” Wilson concluded.

# # #

“The House Democratic caucus has chosen to serve Nancy Pelosi over the people in their own districts by voting for rules changes that have but one intent: to gag the House Republican Minority and reduce it to the relative status of abject acquiescence no matter what shenanigans the Majority decides to pull,” said Wilson.

Included in the rules changes were the repeal of the “motion to recommit” that allowed the Minority to offer alternatives to controversial legislation and the elimination of the six-year term limit for committee chairs.

The vote was 242 in favor and 181 against.

The elimination of the “motion to recommit” was condemned by legislative watchdogs across the country as a defeat for the nation’s two-party system.

“Unfortunately for all Americans, Nancy Pelosi and House Democrats have decided to silence the House Minority from offering any alternative to the unpopular legislation that is certain to be thrust down everyone’s throat in the coming session: budget-busting national healthcare, cap-and-trade, draconian tax increases, and more bailouts for the Majority’s favored industries,” said Wilson.

“Without any legislative alternatives, the American people will not be presented with any choice but to continue down the road to serfdom,” Wilson added.

Wilson also condemned the repeal of committee chair term limits.

“In 1995, when Republicans came into power, they enacted term limits for committee chairs to put an end to an era when chairs were serving for decades,” said Wilson. “Now, it is clear that Congressional Democrats wish to simply solidify their holds on power and merely serve themselves.”

Wilson called on residents in districts across the country to express their displeasure to their representatives’ office.

“Nancy Pelosi and the House Democrats deserves nothing but scorn for deliberately undermining the spirit and the letter of the two-party system that has served our democracy so well,” he said, adding, “They obviously only think we need one party. And that’s a bitter recipe for totalitarian rule.”

# # #

Wilson’s call came in a letter to the Secretary hand delivered on Tuesday, December 30th. In the letter, the ALG executive warned that the announced union/environmentalist action directly violates Employment Retirement Income Security Act (ERISA) provisions by draining working pension funds to wage a political war on global warming. The letter specifically cites the Investor Network on Climate Risk (INCR) as culpable in what he terms an “elaborate shell game.”

The INCR’s global warming Action Plan has 49 signers, including leaders of pension funds, union officials, state treasurers, state and city comptrollers, financial service firms, asset managers, and foundations. Included among the signatories are Andrew Stern, President of Service Employees International Union, and Bruce Raynor, President of UNITE HERE, together representing over 2 million workers and retirees nationwide.

“Union officials are putting the retirement security of workers at grave risk to pursue a dubious political agenda. This is more than irresponsible, it may in fact be a crime in violation of ERISA,” said Wilson.

ERISA explicitly limits the investment of worker pension funds to the “exclusive purpose of providing benefits to participants and their beneficiaries; defraying reasonable expenses of administering the plan.” Dating back to December of 2007, the Department of Labor has repeatedly informed union officials that it rejects “a construction of ERISA which would rend the Act’s tight limits on the use of plan assets illusory, and which would permit plan fiduciaries to tap into ERISA trusts to promote myriad public policy preferences ….”

Wilson’s letter to Secretary Chao calls upon the Department of Labor to ensure that the union/environmentalist coalition properly acts in the best interests of participants and beneficiaries under the plan. It states, “We urge you to take the actions necessary to ensure the fiduciaries within your jurisdiction are complying with ERISA… and are investing solely for the benefit of the participants and beneficiaries of their plans.”

Wilson noted that that the success of the investment strategy, by its own admission, is actually necessarily tied to restrictions in carbon emissions that the federal and state governments have yet to enact, thus posing greater uncertainty and risk to investors.

“The INCR with its Big Labor and state participants create the very financial risks to investors its own action plan portends to reduce,” said Wilson in a statement. “In the process, it is putting the retirement savings and investments of thousands of investors, workers, and retirees in jeopardy by tying financial returns to projected government actions that have not yet taken place, and to a disputed science that may not be factual.”

The union/environmentalist plan ostensibly seeks to “reduce climate risks” in investor portfolios by requiring investments to consider climate risk, investing capital in “developing and deploying clean technologies”, reducing by 20 percent energy use in real estate portfolios, and to support policy actions to enact a “mandatory national policy to contain and reduce national greenhouse gas emissions economy-wide, making sizable, sensible, long-term cuts in accordance with the 60-90% reductions below 1990 levels by 2050 that scientists and climate models suggest are urgently needed to avoid the worst and most costly impacts from climate change.”

Wilson contends that “reducing climate risk” is not the real intention of the investment plan, nor should it be allowed even if it were. “This amounts to an elaborate shell game to reduce carbon emissions by endangering retirements,” he said.

“All of which has nothing to do with protecting the savings of investors from risk to their portfolios,” Wilson added.

Wilson warned that left unchecked, “[t]his green-union pension raid will not only endanger workers’ retirement benefits, but the greater economy. The American people have yet to seriously question the cost of going green.”

# # #

There is a growing consensus in the Republican caucus against the bill. Top Capitol Hill sources suggest that the votes simply are not there to get the $15 billion in emergency loans to Ford, Chrysler and GM passed before year’s end.

“It’s about time that the Senate stood against the bailout madness that has permeated Washington this year,” said Wilson in a statement. “These Senators are heroes for fighting against this bill.”

“The American taxpayer cannot and must not be forced to perpetuate the mismanagement of the Big Three by financing failure. There is no excuse for putting taxpayers on the hook for keeping failed companies afloat that could much better be reorganized under normal Chapter 11 bankruptcy,” Wilson added.

Under Chapter 11 bankruptcy protection, companies have the ability to broadly restructure the scope of operations, redo labor contracts, and otherwise scale back in order to emerge from bankruptcy with a profitable business model.

“Everything that Congress says it is attempting to do, to create a deal to reorganize these companies, to return them to profitability, is precisely the purpose of Chapter 11 bankruptcy protection. The $15 billion bailout is just a reason not to go into Chapter 11. In fact, the real intention is to perpetuate bad management and Big Labor excesses at taxpayer expense,” said Wilson.

Wilson also suggested that a “structured” bankruptcy deal that has been floated in the media is just another excuse not to reopen labor contracts, “The Senators shilling for this bailout will stop at nothing to prevent normal Chapter 11 proceedings from occurring, because then the labor contracts would have to be reopened, management might be fired, etc.”

“Anything else that is being put forth by the companies or by Congress is just spin to mask this truth,” added Wilson.

The automakers have suggested that American consumers will not want to buy cars from companies undergoing bankruptcy proceedings. “That is just false,” responded Wilson. “The people are not buying the cars now, which is why they’re in this mess.”

Wilson believes that without bankruptcy, the companies are doomed to failure. “The real question everyone should be asking is, ‘Who is going to want to invest in a company that has to beg the government for loans that cannot be paid back every few months just to keep up its excessive operations?’”

“If these companies really are in that much trouble, then bankruptcy is their only option,” said Wilson.

“The American people owe a debt of gratitude to Senators Ensign, Coburn, DeMint, Vitter and Shelby for their courageous, principled stand. Any Senator who votes for this bailout will have to answer to their constituents and history for their destructive action,” Wilson added.

###

The letter, with 18 signatories from the heads of movement conservative, limited government, and free market organizations to every member of Congress, called upon members to reject the automakers’ request for new government loans to stay afloat. It, instead, urged members to encourage the automakers’ to file for Chapter 11 bankruptcy protection if they cannot remain solvent.

“The $34 billion taxpayer bailout for which the Big Three are now asking is an unfair imposition upon the American people who are in no way responsible for, and should not face the consequences of, the profligate behavior of Big Three corporate and UAW union management,” read the letter.

Wilson believes that bankruptcy is the only option for the Big Three. “The nation’s bankruptcy laws were written with companies like GM, Ford, and Chrysler in mind,” said Wilson in a statement. “These companies have built-in, so-called legacy costs—pensions, health and other benefits—whose out-of-control growth have rendered the companies’ unprofitable.”

“The companies blame the current economic downturn, and not their own incompetence, for the current malaise they face,” Wilson added. “The fact is, any company that cannot withstand an economic downturn through the normal scaling back of operations that one would expect to occur may not be properly structured.”

“Things are so bad for these companies that Chapter 11 is the only way they can with confidence work out new contracts with labor, slow down production, close operations at their multiple dealerships, and otherwise readjust their business models to be able to adapt to economic conditions,” said Wilson. “Without going through bankruptcy, the Big Three will probably be hopelessly tied down by the contracts they have with Big Labor.”

According to the letter, the average unionized worker working for the Big Three makes on average $75 per hour in wages and benefits, nearly triple what other workers on average make in the private sector, has a JOBS Bank Program that entitles them to nearly a full salary not to work, and offers a generous 30-and-out pension program.

Wilson believes these costs have become “unsustainable.” In his statement, he said, “The current problems faced by the Big Three are the same crisis many holders of pensions will be facing in the coming years. Clearly, the taxpayer cannot afford to bail out every pension in the country, and for that reason, Congress must not create a new entitlement of guaranteeing every retirement plan in the country.”

“If Congress cannot draw a line in the sand here, there is no telling when and where the bailouts might ever stop,” added Wilson.

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