That quote may be one of the more prophetic statements made by a member of congress in a long time. Why, you may ask? Well, this week the Democrat congress announced that they will not pass a budget this year. By so doing, they rob the Republicans of a chance to cut government spending and absolve themselves of doing the same.
While they're not doing one of their main jobs, it didn't stop congress from reaching further into the pockets of America via their passage of S 3217, Chris Dodds "Restoring American Financial Stability Act of 2010." Like most Orwellian legislative titles, it sounds good but doesn't really live up to the name. Here are some of the lowlights:
- The politically appointed (NOT elected) Secretary of the Treasury will have the authority to seize any 'financial entity' - bank or non-bank - if, in his sole opinion, the entity is 'too big to fail' and is in danger of insolvency. This is unprecedented power placed in the hands of someone appointed by the president. The left would have been SCREAMING if this kind of power had been given to George W Bush. The potential for abuse of this power is immense. It could be used to silence opposition, coerce campaign contributions or exact political retribution. Since our economy hinges so heavily on leverage, any company could be vulnerable - and what CEO would speak out against Obama's policies, would lobby against draconian legislation, with this threat hanging over their head?
- Any business that lends credit must get approval to do so from the new Consumer Protection Agency, creating a huge backlog of red tape that will bring consumer lending to a standstill. Want that 12 month no interest line of credit from Home Depot? Not until it's approved. Want that 36 month no payment, no interest for furniture from Macy's? No so fast, bub, the CPA has to bless it first.
- Oh yeah, this bill creates a new agency (well, at least one new one) called the Consumer Protection Agency. So once again, we're watching the size (and cost) of government increase while Democrats are in control.
- While the auspices of this bill are to 'restore financial stability' it does no such thing. The housing crisis stemmed from shoddy lending practices pushed by Fannie Mae and Freddie Mac. Granted, there were numerous other factors, but Fannie and Freddie were at the heart of it. John McCain introduced an amendment to the bill that would have pushed the government away from the table, ending the taxpayer support for Fannie and Freddie...but the amendment was defeated by Democrat majority. So, the government has no problem seizing and breaking up private corporations, but will not do the same thing to Government Sponsored Entities. Oh, and by the way, this week Fannie Mae asked for another taxpayer funded bailout of $8.4 billion and Freddie Mac asked for another $10.6 billion.
- While Fannie and Freddie get a pass (and more money they didn't earn), this bill once again attacks the credit card companies who had nothing to do with the financial meltdown, and we will pay the price for this in the end. By way of historical precedent, recall that government intervention 'saved' credit card holders by passing legislation that says that they cannot raise your interest rates simply because your finances are blowing up. So the natural reaction by the credit card companies was to raise ALL interest rates (mine went 13.49% to 19.99%, I've never missed a payment and my credit score is 830!) before the law went into effect. Now, working hard, making the right moves and establishing a solid credit score does nothing for you. You get the same interest rate as someone who made all the WRONG moves and trashed their credit. Thanks, government, for helping out on that one! Well, this bill goes even farther. Mastercard and Visa get a percentage of every transaction a merchant makes using their cards, and this bill limits what that percentage can be. Rather than let the merchants decide how much they're willing to pay, the government is seeking to make that decision for them. My prediction is that by cutting the rates per transaction, the government is going to force the credit card companies to take two actions; first, they'll charge a monthly or annual service fee to merchants for the rights to use their cards in addition to the lower per-transaction fee. This will compensate for their per transaction losses, but at the same time will force smaller companies to go to a cash only basis for their businesses (or they'll have to offer their own lines of credit, forcing them to play with the new CPA above). Second, because it's clear that they don't know what revenue streams the government will take away in the future, say good-bye to your no annual fee credit cards. Thanks again, government.
The passage of this bill and the key votes that passed it highlight once again why we have to get the right people into office. We can see the tide is turning. This week another round of primaries ushered out a host of incumbents and put some good people on the November ballots. After Bob Bennett was tossed off of the Utah ballot two weeks ago, Arlen Specter was shown the door this week and Blanche Lincoln staggered to a run off against the Arkansas Lt. Governor with over 50% of the Democrats voting against her. In Kentucky, Rand Paul won the GOP primary, Pat Toomey won his contest in Pennsylvania and John Boozman is on the ticket in Arkansas.
It's not enough to get oust incumbents and get the right people on the tickets in November. We have to mobilize the masses and get them out to vote. We missed an opportunity in Pennsylvania's 12 Congressional district (once held by John Murtha) because the Republican turnout was 20% lower than that of the Democrats. Mid-term elections routinely have light turnout, but we can count on Obama and the Democrats to shake every tree and every bush to get their base out to vote. If we want to take back congress, de-fund the health care initiatives, repeal the financial bill's intrusion into the free market (such as it is these days), we need to ensure that everyone will REMEMBER IN NOVEMBER!!