For Immediate Release
Nathan White (202)225-5871
We Had Alternatives
In God We Trust, Wall Street Gets Cash
"The public is being led to believe that Congress has reconsidered its position because we have before us a better bill than we had a few days ago. It is the same bill plus hundreds of new pages for hundreds of millions of tax breaks. What does this have to do with the troubles of Wall Street?
"Driven by fear we are moving quickly to pass a bill, which may produce a temporary uptick for the market, but nothing for millions of homeowners whose misfortunes are at the center of our economic woes. People do not have money to pay their mortgages. After this passes, they will still not have money to pay their mortgages. People will still lose their homes while Wall Street is bailed out.
"The central flaw of this bill is that there are NO stronger protections for homeowners and NO changes in the language to ensure that the secretary has the authority to compel mortgage servicers to modify the terms of mortgages. And there are NO stronger regulatory changes to fix the circumstances that allowed this to happen.
"We should have created a mechanism for our government to take a controlling interest in mortgage-backed securities and use our power to work out a new deal for the homeowners. We could have done this. We should have done this. But we didn't.
"Now millions of Americans will face the threat of foreclosure without any help. And the numbers will soon rise for a number of reasons. Not only because of the Alt-A, jumbo mortgages which will soon be reset at higher interest rates, but because the London Interbank Offered Rate (LIBOR) is pushing up rates on adjustable mortgages and more than half of the US adjustable mortgage rates are tied to LIBOR. Homeowner defaults will grow in significant numbers. Let's see if Congress will be as quick to help homeowners on Main Street as they were to help speculators on Wall Street.
"Now the government will have to borrow $700 billion from banks, with interest, to give banks a $700 billion bailout, and in return the taxpayers get $700 billion in toxic debt. The Senate "improved" the bailout by giving tax breaks to people in foreclosure. People in foreclosure need help paying their mortgage, they do not seek tax breaks.
"Across our Nation, foreclosures continue to devastate our communities, people are losing their jobs, and the prices of necessities are skyrocketing. This legislation, just like the one we defeated last week, will do nothing to solve the problems plaguing American families or help them to get out from underneath the oppressive debt they have been forced to take on.
"Unfortunately, there has been no discussion of the underlying debt-based economy and the role of our monetary system in facilitating the redistribution of wealth upwards.
"It is not as though we had no choice but to pass the bill before us. We could have done this differently. We could have demanded language in the legislation that would have empowered the Treasury to compel mortgage servicers to rework the terms of mortgage loans so homeowners could avoid foreclosure. We could have put regulatory structures in place to protect investors. We could have stopped the speculators.
"This bill represents an utter failure of the Democratic process. It represents the triumph of special interest over the triumph of the public interest. It represents the inability of government to defend the public interest in the face of great pressure from financial interests. We could have recognized the power of government to prime the pump of the economy to get money flowing through out society by creating jobs, health care, and major investments in green energy. What a lost opportunity! What a moment of transition away from democracy and towards domination of America by global economic interests.
"Years ago, in a Cleveland neighborhood, I saw a hand-scrawled sign above a cash register in a delicatessen. The sign said: "In God We Trust, All Others Pay Cash." The sign above the Speaker's rostrum reads "In God We Trust," but we are paying the cash to Wall Street.
"It is not as if we had no other choice but to pass this bill."