How a $700 billion bailout became a $800 billion "rescue plan"
You know how, when the bailout package was first proposed by Henry Paulson and Ben Bernanke, Congress and the public were generally outraged that the Fed Chairman and the Secretary of the Treasury would ask for so much money to bailout large corporations and Wall Street? Seriously, Congress was all "OMGWTF, $700 billion!?!?!? That's, like, nearly a trillion dollars! FAIL."
Joe Public probably thought that Congressional outrage was along the same lines of the outrage felt by most tax-payers. Something like "Shucks, that's a heckuva lot of money."
Turns out what Congressional leaders meant was: that wasn't nearly enough. That's why the Senate and the House both passed a bail-out bill that now includes 100 billion dollars in pork, for a grand total of $800 billion.
How on earth did Congress manage to pack so many earmarks into such a bill. Here are some of the tax benefit recipients, as listed by the San Francisco Chronicle:
- $2 million tax benefit for makers of wooden arrows for children
- $100 million tax break to benefit auto racetrack owners
- $192 million in rebates on excise taxes for the Puerto Rican and Virgin Islands rum industry
- $148 million in tax relief for U.S. wool fabric producers
- $49 million tax benefit for fishermen and other plaintiffs who sued over the 1989 tanker Exxon Valdez spill
How ridiculous are these (with the exception of the rum benefit, of course) tax benefits?
But wait, there's more - for instance, Washington residents (as well as residents of Texas, Nevada, Florida, and Wyoming) can continue deducting their sales tax from the their federal taxes, something I've never taken advantage of because I am too lazy to save my receipts.
The bill passed the house by a vote of 263-171, meaning that 58 more Representatives voted for the bill today than on Monday, when the bill was defeated by a few dozen votes just before Congress all pretended to be Jewish so they could take Rosh Hashana off and go drink some of that subsidized rum and shoot wooden arrows at each other.
I'm not one who thinks that earmarks are all bad, not by a long shot. But I find it interesting the lawmakers who were completely obsessed with government waste and disturbed by government intervention and special interests were happy to pass along over $100 billion in pork.
Anyone else bothered? Does this seem hypocritical? Especially considering that there are no actual revisions or reforms to the laws that govern the mortgage industry to begin with?
Other fun things to consider:
- The money being used to finance the bailout doesn't technically exist. Yet.
- The result of creating the funds necessary to fund the bailout can crush the American dollar in a landslide of inflation.
- Some former members of Congress would like to further deregulate industry accounting practices by repealing part of the Sarbanes-Oxley Act of 2002. You know, the part that dictated that companies "must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately".