The bill failed. 205 Yea, 228 Nay. The bill failed mainly because the Republican leadership failed to deliver the votes of their members. The Democratic leadership delivered well beyond a majority of their caucus for a bill that no one was happy with yet most thought was necessary to act swiftly.
This failure in the Republican leadership not withstanding, I am happy this bill failed. What? Yes, I am happy it failed. Because I read the actual text of the bill.
Overall, it's not a bad bill. But there's a poison pill. Oversight. Look at the oversight section:
MEMBERSHIP.—The Financial Stability Oversight Board shall be comprised of—Excuse me? Are these people high? We want to turn over "oversight" of the actions of the Secretary of Treasury to a board on which the Secretary himself sits? We want to give the oversight of this $700 billion in taxpayer cash to people who were all in office during the whole time the bad loans were being given out and bad mortgages were being securitized and did absolutely nothing to prevent it? We want 5 people, all of whom are appointed by the same President - the same President under whose watch this happened - to "oversee" the use of $700 billion of our money? We were about to turnover the oversight of this humongous amount of money to people who in their core believe in deregulation, the root cause of this problem? I got a better idea. Why don't we just start holding Alcoholics Anonymous meetings at local liquor stores already?
(1) the Chairman of the Board of Governors of the Federal Reserve System;
(2) the Secretary [of Treasury];
(3) the Director of the Federal Housing Finance Agency;
(4) the Chairman of the Securities Exchange Commission; and
(5) the Secretary of Housing and Urban Development.
No way. It needs to improve much, much more. If I had my way, the oversight provisions would be structured something similar to this:
- includes at least 11 members (odd numbered)
- none of the members may be an otherwise appointed position within the federal government, or in the past decade, at the helm or the Board of any bank with a current credit rating of less than AAA.
- 6 members to be appointed by the Speaker and the House Financial Services committee, ratified by the whole House. 4 Members appointed by the Senate Banking Committee, and ratified by the whole Senate. 1 member appointed by the President and ratified by BOTH the House and the Senate.
- the oversight board can review any decision by the Sec of Treasury, and MUST ratify all decisions by the secretary that would spend more than $1 billion.
- a three person panel within the Board, not the Secretary, will have the power to hire staff for this bailout, although they'd consult with the secretary.
- A repeal of Bush's tax cuts for people making over $250K immediately to pay for this package.
- Include $100 billion, making each of the next $100 billion steps contingent upon the performance of the Secretary and impossible without Congressional action.
- Write in a mandate that would let bankruptcy courts restructure first mortgages for ALL banks, whether they accept federal help or not.
- If you accept federal help, you must give taxpayers preferred stock, the compensation for your CEO may not exceed the salary of the President, and the compensation of 4 other top executives may not exceed the salary of the Speaker of the House. "Compensation" is to include cash salary, stock options, travel expenditure, and 'forgiven' loans.
- If you want your troubled assets purchased, we must make sure you are actually in dire situation, not just trying get away with dumping bad assets on the cheap. That means that you must open your books to independent SEC and Congressional staff, or have filed for bankruptcy and the Treasury has taken over your operations.