Wyden Issues Statement on Administration Proposal to Address Financial Crisis
Washington, DC— U.S. Senator Ron Wyden (D-Ore.) issued the following statement today on Congressional action to address the nation's financial crisis:
"The serious threat to the nation's financial system requires Congress to act as wisely and as quickly as is practical. But that doesn't mean Congress should act recklessly.
Unless we address the underlying faults in the system that brought us to this financial abyss in the first place, we may simply be building the world's largest bridge to nowhere.
We have to make certain that at the end of this bridge is a functioning financial marketplace, where the profits of the few no longer endanger the long-term economic welfare of the many. We also have to be sure that there is independent oversight and accountability. There is way too much taxpayer money at stake to give one person total, unreviewable authority over how the money is spent.
The Bush Administration is asking taxpayers for an extraordinary amount of money. Congress must be certain that the Administration's proposal is the best approach possible at the lowest cost to the taxpayers. I'm not convinced that the Bush proposal meets that standard. I agree with a number of my colleagues that we need a comprehensive solution that addresses the underlying cause of the financial crisis - the foreclosures on main streets and side streets -- as well as the need to calm worldwide financial markets.
I also think that when taxpayers are asked to pay hundreds of billions of dollars for bail outs, they should get a fair return on their investment. All of the benefits shouldn't go to bankers, brokers and billionaires. But under the Bush Administration's proposal, the financial institutions not only get quick cash to shore up their finances, they also get all the upside return on the taxpayers' money. Meanwhile, the taxpayers get all the risk along with a pile of bad debt that may or may not get paid sometime in the future.
Essentially, the Bush Administration's proposal socializes the costs and risk of the bailout and privatizes the return. I don't think that's the best deal we can get for the taxpayers, especially when compared to the AIG bailout just last week. In exchange for bailing out AIG, the Federal government and the taxpayers got 80 percent of the stock in return. So if AIG returns to profitability, taxpayers will get a fair share of the profits. I will be looking at the AIG solution and other approaches to ensure that taxpayers get benefits and not just bills from any bailouts."
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