10/4/08

This is how we do it

Four days after the House rejected the Emergency Economic Stabilization Act of 2008 the Senate passed a similar proposal ($700 billion for the Treasury to purchase, insure, hold and sell a variety of financial instruments), having folded plenty of tax provisions into the mix (estimated value: $152 billion).

Call it pork or a $152 billion spoonful-of-sugar-to-help-the-medicine-go-down; either way, the tax breaks for energy companies, rum-runners, racetracks, etc. appears to have prompted 33 Dems and 25 Republicans to change their nays to yeas. (View the roll call to see how your Rep voted.)

I'm not sure why this bailout/rescue plan is better than the earlier one. While there's a chance that some of the $700 billion will be recovered as acquired assets are sold, there's very little chance of making-up the revenue lost by those tax cuts. Beyond the bottom line, I'm concerned by how quickly this came together. Timing isn't really the issue, it's care. How many Reps do you think read the bill before voting on it?

Maybe I'm naive. Besides the scale of the bill and speed at which it came together, there may have been nothing unusal about the process we've witnessed over the last week or so. I recognize that no one likes to see how sausage gets made, but there's a point when a convoluted process--tying unrelated measures together--stops being politically expedient and begins being reckless. If you trace the origins of the legislation that either enabled the flawed financial practices to fester or shielded those practices from regulation, I suspect those policies were obscured within other bills, underwent little scrutiny or were barely understood by the reps who approved the measures.

Unrelated to the bailout, I came across this stat that provides a sense of scale to the crisis. Between 1948 and 1951 the U.S. spent $12.7 billion on the Marshall Plan, an effort to re-build Europe after WWII. In today's dollars, that amount would be about $100 billion.

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If you're trying to reconcile the 9/28 and 10/3 votes, it's worth noting that one Democrat changed his vote from Yes to No, and one Republican who didn't vote intitally came down in favor of the bill on 10/3.

The letter to the Senate from the Congressional Budget Office, a nonpartisan advisory agency, approximates the impact of the various aspects of this plan on the federal budget and deficit.
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I can't help it. This song keeps running through my head. It's distrubing as a soundtrack to politics-as-usual, but you have to admit, on it's own, it's catchy.

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