Urbana Daily Citizen - Jordan Blasts Bailout Plan In Its Current Form
Urbana Daily Citizen - Jordan Blasts Bailout Plan In Its Current Form
U.S. Rep. Jim Jordan (R-Urbana) took a half hour Friday to speak with media representatives in a conference call about his thoughts on the financial crisis and proposed plans for a federal bailout of failing Wall Street firms.
"In particular, you look at the front page of the Wall Street Journal today and you see that (Washington Mutual) is the largest bank failure ever, and it's serious. We understand that," Jordan said.
Jordan called Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke "sharp people" but said he and other Republican Congress members oppose the terms of the plan presented by the Bush administration.
"We need to address concerns in a free market-oriented manner, and the proposal wasn't," he said. "The taxpayers should not be responsible. Folks on Main Street who have done things the right way should benefit, and they can if we cut the capital gains tax to put more capital into the market. We're talking about three-quarters of a trillion taxpayer dollars at risk. The situation is fluid here."
Jordan said even though Congress members were originally supposed to go home for recess on Friday, he expects them to work through the weekend to achieve some sort of compromise to stabilize the economy. He said he hopes partisan politics can be put aside "to do what's best for the country and work together to make that happen."
Jordan said his Washington office has logged between 500 and 1,000 calls from constituents in Ohio, especially business owners, in the past few days. Of them, some 90 percent were opposed to the Paulson plan, he said.
"The solution is not to take people who have been hurt by Wall Street and make them pay," Jordan said. "The solution is to restructure the tax code."
Jordan said there are two "competing models" for the terms of the bailout.
"One is a market approach and one is a socialist approach," he said. "Spending one quarter of the federal budget in one week is not the way to go. It makes some sense to not rush through and take some time so we do it the right way."
Jordan said while some of the callers to his office have expressed concern about the safety of their deposits and retirement accounts, a higher number were opposed to spending and tax increases.
"More of the concern is, 'don't take my money and bail out politicians and players on Wall Street that caused the problem in the first place,' and I can understand that," he said. "We're still the strongest economy in history. We understand there are lots of families facing tough times, but the free market works."
While the Washington Mutual failure was attributed to a number of factors, including shaky subprime mortgage lending and a classic "run on the bank," the selling of WaMu's assets to J.P. Morgan Chase helped prevent the Federal Deposit Insurance Corporation's funds from being depleted, as it has in the past two years when other banks failed.
According to the Poynter Institute, no banks failed in 2005 or 2006, but seven went under in 2007 and 12 have failed so far this year, not counting Washington Mutual. The failures have cost the FDIC some $42 billion to date.
Meanwhile, deposits in credit unions are backed by a completely separate federal entity, said Douglas A. Fecher, president and CEO of Wright-Patt Credit Union.
"Members' funds in federally insured credit unions are just as safe as those that are insured by the FDIC," Fecher said. "Members' funds at the nation's 7,972 federally insured credit unions are guaranteed under the National Credit Union Share Insurance Fund, NCUSIF, to the same levels and safety as FDIC-insured accounts. It is important that (credit union) members understand that their deposits are federally insured, and safe, and that America's credit union industry is alive, well and thriving despite these troubled times."
FDIC and NCUSIF both insure deposits up to $100,000. For more information, visit http://myfdicinsurance.gov/ and www.ncua.gov.
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