Call it the real bailout plan: the one by the 500 or more members of the US Congress for their election campaigns for the November polls.
Forget the Paulson plan to try and ease the financial squeeze, to keep banks alive and credit flowing, the US economy out of recession and hundreds of thousands of Americans employed. None of that matters.
Buried by the flood of bad financial news and the wobbly fate of the $US700 billion bailout, America’s Congressional politicians, especially Democrat and Republian leaders of the lower house, the House of Representatives, are close to pulling off a swifty of epic proportions.
In fact, if they can get this deal up, it will represent a rort the equal of anything pulled by the now hated Wall Street. They are in the process of crafting a final spending bill for this Congress totalling of $US630 billion to help their election campaigns and bailout donors, like the car companies and others, but they can’t agree on a plan that would send an enormous message to the country and the rest of the world.
Republicans in particular have wailed about “socialism” and the Government aid, but have no shame in putting their hands into the public purse to get their pork barrels filled by this huge piece of legislation which has been devised on the quiet by Democratic and Republicans leaders in the House.
Republicans are pushing for a “private bailout” fund, something that Senator John McCain, the party’s increasingly desperate Presidential candidate, has supported, despite the absence of any private support for Lehman brothers, Bear Stearns (except with the Fed paying $US30 billion to support), AIG and this morning, Washington Mutual.
The opposition will force the Democrats to withdraw support for the Paulson bailout because they suspect the Republicans are playing politics and looking to attack Democrats in the congressional and presidential campaigns for bailing out Wall Street. But both are just as culpable, the Republicans more so because they are the party in power.
While all this was going on, Congress is in the process of passing a massive $US600 billion spending bill to complete the budget and pay the Pentagon and of course fund billions of dollars in pork barrel projects.
The Pentagon budget would rise to a new record while American carmakers would get $US25 billion in loans victims of hurricanes and floods would receive billions of dollars in a $US630 billion-plus “omnibus spending bill rushing toward the House floor Wednesday. It may get stalled in the Senate because of some contentious issues. Here’s a report from CNN which neatly captures the porkiness of the bill:
It will lift the 25 year ban on drilling for oil off the Atlantic and Pacific coasts and has been cobbled together by House Democrats and Republicans while the $US700 billion bailout bill was occupying the headlines.
It’s a major change in policy for the Democrats.
Many members of the House of Representatives and in the Senate want the bill to pass to provide fund for projects in their states and districts to help them campaign for the November poll.
The bill is actually needed is fueled by a need to keep the US government running past the October 1 start of the 2009 budget year.
This huge bill, with its hundreds of billions of dollars of spending, its more than 1,000 pages in length: 357 actual pages of spending measures, but with a further 752 pages of accompanying explanations and tables.
The pork is called “earmarks”, bits of spending requested by individual Congress members of both houses. It’s the biggest single single rort in Congress and one Obama and McCain have promised to control, next year!