Commudems Getting Queasy Over $141 Billion Spending Bill

Let's see, $50 Billion more for teacher,police and firemen union pension bailouts, $141 Billion to extend unemployment (this would be about extension number 4) and first time home buyers tax credit, extension 2. This after $852 Billion in failed Stimulus I. Does anyone remember how much the TARP bailout cost? The reference article below says as of April 2010, $89 Billion, because the banks are paying back their loans. The revolving TARP credit line is $700 Billion. Before we get too giddy over this tidbit, the Wall Street Journal in a recent report stated 3 out of 4 residential restructured mortgages under the Obama plan were back in default mode. (As there has been much Oil Patch talk of late,file this under throwing good money down a dry hole. At some point you've got to admit to yourself there isn't a pool of oil waiting down below and quit drilling).

We've got to spend our way out of a recession.... famous last words.

Many of us,at the time even with our limited right wing brain capacities, understood the idiotic fallacy of the concept that spending more, will get you out of debt faster. I'll repeat my comment from April '09:

"Will somebody please show me how this works, my credit card companies would be very interested".

Have you ever had someone convince you to take the wrong freeway exit, even when you know with all of your heart, it's the wrong direction? Have you ever after following said directions, run out of gas, far from help? Have you ever watched now scared-of-the-neighborhood, Mr. Wrongway, hail a taxi, and leave you far behind, all by your lonesome?

No? ...... Yes, from someone in the back.... anybody else????

Well for the rest of you, get ready, the Senate is about to show you how it feels.

Steve

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From Wikipedia:

"TARP"
This article is about the Treasury fund. For the legislative bill and subsequent law, see Public Law 110-343. For the legislative history and the events leading to the law, see Emergency Economic Stabilization Act of 2008.
The Troubled Asset Relief Program, commonly referred to as TARP or RCP, is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector. It is the largest component of the government's measures in 2008 to address the subprime mortgage crisis.

Originally expected to cost the U.S. Government $356 billion, the most recent estimates of the cost, as of April 12, 2010, is down to $89 billion, which is 42% less than the taxpayers' cost of the Savings and loan crisis of the late 1980s.[1] The cost of that crisis amounted to 3.2% of GDP during the Reagan/Bush era, while the GDP percentage of the current crisis' cost is estimated at less than 1%.[2] While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury's stake and emerge from TARP within a year.[3] Of the $245 billion invested in U.S. banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010. AIG is considered "on track" to pay back $51 billion from divestitures of two units and another $32 billion in securities.[4] In March 2010, GM repaid more than $2 billion to the U.S. and Canadian governments and on April 21 GM announced the entire loan portion of the U.S. and Canadian governments' investments had been paid back in full, with interest, for a total of $8.1 billion. [5] This was however subject to contention because it was argued that the automaker simply shuffled federal bailout funds to pay back taxpayers. [6]

Purpose
TARP allows the United States Department of the Treasury to purchase or insure up to $700 Billion of "troubled assets", defined as "(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress."[7]
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June 16,2010
USA Today

Some Democrats Balk at $141 billion Bill; Scale-back in the WorksSenate Democrats are on a collision course in the chamber over a bill that would extend numerous tax incentives and unemployment insurance benefits, and it is likely, according to a number of senior Senate Democratic leadership aides, that the $141 billion package will have to be scaled back, as concerns over the rising deficit have rattled some members of the majority.

As it stands, the current bill would increase the deficit by nearly $80 billion, which is causing some heartburn among more fiscally conservative Democrats, (if that isn't an oxymoron, I don't know what one is) like Sens. Ben Nelson, D-NE, and Evan Bayh, D-IN. See how you, the taxpayer, will be affected by this, which does not take into account tax hikes on the oil and gas industry, as well as the investment industry that will be used to offset some of these costs.


Those same senior aides said outside groups, exerting an inordinate about of pressure on members, and some more liberal Democrats need to see a couple of test votes in order to know that Majority Leader Harry Reid, D-NV, does not have the 60 votes he needs to shut down debate (called "invoking cloture" in Senate-speak) and get to final passage. One Democratic aide told Fox, "They have to see we tried, then we can move to something smaller."

That same aide said Democrats particularly like a proposal by Sen. Jon Tester, D-MT, that would trim off about $6 billion from the price tag by slimming down the unemployment benefits in the bill. Tester would shrink weekly checks to recipients by $25, an increase that started in the stimulus bill earlier this year and has continued since.

Sen. Debbie Stabenow, D-MI, on Tuesday told reporters, "I think everything, a lot of things, will be on the table, if we don't get cloture," naming the Medicare doctor fix as a likely candidate. There is a 19-month patch to the current formula, stopping a whopping 21% cut in the doctors' federal reimbursement. Stabenow praised the Tester proposal as presenting a possible way forward to final passage for the bill.

The senator criticized Republicans for voting for a larger bill in March that added more to the deficit than the bill currently on the floor, but a spokesman for Senate GOP Leader Mitch McConnell, R-KY, said the dynamics surrounding the debate have changed, most notably the nation has hit the $13 trillion debt mark.

Stabenow saw a different cause. "Politics. It's all politics. They think this is what voters want this fall, so that's what they're after," the senator accused.

One senior Senate Democratic aide said an alternative bill is already waiting in the wings, saying only the $24 billion Medicaid money for the states is likely to remain unscathed, with the Medicare doctors seeing only a 12-month fix to the current reimbursement formula.

Once Democrats dispense with the cloture vote on Wednesday, and possibly an amendment by Sen. John Thune, R-SD, as well, that would fully offset (and even decrease the deficit) a package of tax incentives and unemployment benefits, the leader would then move quickly to the alternate package.

One Democratic senator who asked not to be named discussing strategy and who has seen the alternate bill, tells Fox that more of the bill will be offset, less will go to increasing the deficit, though the senator would not say from where the revenue would come.

But in an unlikely turn, Stabenow would not rule out unallocated stimulus funds being used to pay for some items in the bill, a move that is becoming increasingly popular in the House though has been seen as anathema in the Senate. "People are looking at everything at this point. From my point, this is about getting jobs to people as fast as possible," Stabenow said.