Paul Wellstone Mental Health and Addiction Equity Act of 2008
Floor Speech
PAUL WELLSTONE MENTAL HEALTH AND ADDICTION EQUITY ACT OF 2008 -- (Senate - October 01, 2008)
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Mr. SANDERS. Madam President, let me be very frank. While the bailout package we are dealing with tonight is far better than the absurd proposal that was originally presented to us by the Bush administration--which, if you can believe it, would have given the Secretary of the Treasury a blank check to spend $700 billion in any way he wanted, without any transparency, without any oversight, and without any judicial review--this bill, far better than that, is still short of where we should be. And I want to thank Senator Dodd and others for their very hard work in improving this legislation. But in my view, this bill is still not good enough. It should be rejected by the Senate, unless an amendment I am about to offer is passed.
This country faces many serious problems in the financial market, in the stock market, and in our economy. We must act, but we must act in a way that improves the situation. We can do better than the legislation we are dealing with tonight.
This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets.
This bill does not effectively address the issue of oversight, because the oversight board members were hand picked from the Bush administration.
This bill does not effectively deal with the issue of foreclosures, and addressing that very serious issue which is impacting millions of low- and moderate-income Americans in the aggressive, effective kind of way we should be.
This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.
This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulation fervor which created trillions of dollars in complicated and unregulated financial instruments, such as credit default swaps and hedge funds.
This bill does not address the issue that has taken us to where we are today, the concept of ``too big to fail,'' the need for taxpayers to bail out institutions which are so large that they will cause systemic damage to our entire economy if they go bankrupt. In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions such as the Bank of America swallow other gigantic financial institutions such as Countrywide and Merrill Lynch.
Who is going to bail out the Bank of America if it begins to totter? Not one word about the issue of too big to fail in this legislation, at a time when that problem is, in fact, becoming even more serious. This bill does not deal with the absurdity of having the fox guarding the henhouse. Maybe I am the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the Secretary of the Treasury, who is the former CEO of Goldman Sachs, which, along with other financial institutions, actually got us into this problem. Maybe I am the only person in America who thinks that is a little bit weird, but that is what I think.
This bill does not address the major economic crises we face--growing unemployment, low wages, and the need to create decent-paying jobs, rebuilding our infrastructure, and moving us to energy efficiency and sustainable energy.
On top of all that, there is one issue that is even more profound and more basic than everything else that I have mentioned, and that is, if a bailout is needed, if taxpayer money must be placed at risk, whose money should it be? In other words, who should be paying for this bailout which has been caused by the greed and recklessness of Wall Street operatives who have made billions in recent years? That is what my amendment is all about. It is an issue that we have to bring to the floor of the Senate because that is what the American people want to hear discussed.
The American people are bitter, they are angry, and they are confused. Over the last 7 years since George W. Bush has been President, 6 million Americans have slipped out of the middle class and are in poverty. Today, working families are lining up at emergency food shelves in order to get the food they need to feed their families. Since President Bush has been in office, median family income for working-age families has declined by over $2,000; 7 million Americans have lost their health insurance; 4 million have lost their pensions; consumer debt has more than doubled; and foreclosures are the highest on record.
Meanwhile, the cost of energy, food, health care, college, and other basic necessities has soared. While the middle class has declined under President Bush's reckless economic policies, the people on top have never had it so good. For the first 7 years of Bush's tenure, the wealthiest 400 individuals in our country saw a $670 billion increase in their wealth. At the end of 2007 they owned over $1.5 trillion in wealth. That is just 400 families--$670 billion increase in wealth since Bush has been in office.
In our country today we have the most unequal distribution of income and wealth of any major country on Earth, with the top 1 percent earning more income than the bottom 50 percent, and the top 1 percent owning more wealth than the bottom 90 percent. We are living at a time when we have seen a massive transfer of wealth from the middle class to the very wealthiest people in this country; when, among others, CEO's of Wall Street firms receive unbelievable amounts in bonuses, including $39 billion in bonuses in the year 2007 alone for just the five major investment houses.
We have seen the incredible greed of the financial service industry manifested in the hundreds of millions of dollars they have spent on campaign contributions and lobbyists in order to deregulate their industry so hedge funds and other unregulated financial institutions could flourish. We have seen them play with trillions and trillions of dollars in esoteric financial instruments in unregulated industries which no more than a handful of people even understand.
We have seen the financial services industry charge 30 percent interest rates on credit card loans and tack on outrageous late fees and other costs to unsuspecting customers. We have seen them engaged in despicable predatory lending practices, taking advantage of the vulnerable and the uneducated. We have seen them send out billions of deceptive solicitations to almost every mailbox in America.
I used to think that my home was the only one that was receiving them. It turns out that billions of other solicitations went out to probably every home in America. What they hoped to do was to gain new customers for credit card companies and then, through the very small print on the back of the solicitation, have the opportunity, have the ability to monkey around with interest rates so when people thought they were getting zero interest or 2 percent, it turns out that a few months later they were paying very high interest rates.
Most important, of course, we have seen the financial services industry lure people into mortgages they could not afford to pay, which is one of the basic reasons we are tonight in the midst of all of this. We have a bailout package today which says to the middle class that you are being asked to place at risk $700 billion, which is $2,200 for every man, woman, and child in this country. You are being asked to do that in order to undo the damage caused by this excessive Wall Street greed. In other words, the ``Masters of the Universe,'' those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse, and now, as the American and world financial systems teeter on the edge of a meltdown, these multimillionaires are demanding that the middle class, which has already suffered under Bush's disastrous economic policies, pick up the pieces they broke.
That is wrong and that is something I will not support. The major point I want to make this evening is, if we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from Bush's tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation--those people are the people who should pick up the tab and not ordinary working people.
I have introduced an amendment which gives the Senate a very clear choice. We can pay for this bailout of Wall Street by asking people all across this country, small businesses on Main Street, homeowners on Maple Street, elderly couples on Oak Street, college students on Campus Avenue, working families on Sunrise Lane--we can ask them to pay for this bailout. That is one way we can go or we can ask the people who have gained the most from the spasm of greed, the people whose incomes have been soaring under President Bush, to pick up the tab. They threw the party, they became drunk on greed, and now I believe they should foot the bill. What my amendment proposes is quite simple. It proposes to raise the tax rate on any individual earning $500,000 a year or more, or any family earning $1 million a year or more, by 10 percent. That 10-percent increase in the tax rate from 35 percent to 45 percent will raise over $300 billion in the next 5 years; $300 billion is almost half the cost of the bailout.
If what all the supporters of this legislation are saying is correct, that the Government will get back some of its money when the market calms down and the Government sells some of the assets it has purchased, this amount of $300 billion should be sufficient to make sure 99.7 percent of taxpayers do not have to pay one nickel for this bailout.
Most of my constituents did not earn a $38 million bonus in 2005 or make over $100 million in total compensation in 3 years, as did Mr. Henry Paulson, current Secretary of the Treasury and former CEO of Goldman Sachs. Most of my constituents did not make $354 million in total compensation over the past 5 years as did Richard Fuld, the CEO of Lehman Brothers.
Most of my constituents did not cash out $650 million in stock after a $29 billion bailout for Bear Stearns, after that failing company was bought out by JPMorgan Chase. Most of my constituents did not get a $161 million severance package as E. Stanley O'Neil, former CEO of Merrill Lynch, did.
Last week, I placed on my Web site, sanders.senate.gov, a letter to Secretary Paulson in support of the content of my amendment--which was pretty simple. It said that it should be those people best able to pay for this bailout, those people who have made out like bandits in recent years--they should be asked to pay for this bailout. It should not be the middle class.
To my amazement, and I am a Senator from a small State--to my amazement some 48,000 people--and here they are, these are their names, and I will not read them all off, 48,000 people have already cosigned this petition, and the names keep coming in and the message is very simple: We had nothing to do with causing this bailout. We are already under economic duress. Go to those people who have made out like bandits. Go to those people who have caused this crisis and ask them to pay for the bailout.
The time has come to assure our constituents in Vermont and all over this country that we are listening and understand their anger and their frustration. The time has come to say that we have the courage to stand up to all of the powerful financial institution lobbyists who are running amok, all over this building--from the Chamber of Commerce to the American Bankers Association to the Business Roundtable--all of these groups who make huge campaign contributions, spend all kinds of money on lobbyists--they are here, loudly and clearly. They don't want to pay for this bailout. They want Middle America to pay for it.
So this is a moment of truth. I hope very much that this Senate will support the amendment I have offered.
Madam President, I reserve the remainder of my time.
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