Lummis: Time To Stop The Bailouts

Press Release

U.S. Representative Cynthia Lummis, R-Wyo., has voted against the "Wall Street Reform and Consumer Protection Act," a bill that Lummis and other fiscal conservatives have dubbed "Barney Frank's bailout nation." Lummis says the time is now to end the federal government's bailout appetite.

"People in Wyoming are tired of the endless taxpayer-funded bailouts that put them on the hook for Wall Street's bad decisions," Lummis said. "Unfortunately, Democratic leaders don't share our disdain for the bailout culture. Their so-called "Wall Street reform' plan for financial regulatory reform makes the federal government bailout system permanent, leading to further deficits the American people cannot afford.

"If the Democrats were serious about ending the bailout culture, they would have supported Republican efforts to end TARP and use all unspent and returned funds to pay down the national debt. TARP was created as a loan program, and promises were made to the American taxpayer that those loans would be paid back. Treasury Secretary Geithner's decision to extend this program, instead of allowing it to expire at the end of the year, creates nothing more than a slush fund for additional spending at a time of record deficits.

"Their plan will restrict credit and lead to further job losses, adding to the more than 7 million Americans who have lost their jobs since the beginning of the recession. It is unthinkable to me that Congress will continue to penalize hard-working families who have played by the rules and lived within their means for the wrong decisions made in Washington and on Wall Street."

H.R. 4173 will vastly expand the federal government through the creation of a new federal agency, the Consumer Financial Protection Agency (CFPA). The CFPA, headed by a new "credit czar" would have unlimited authority to dictate which financial products can and cannot be available to American consumers.

Any business which provides loans, credit, or repayment plans would be regulated, including: doctors and hospitals, student loans, defined-benefit pension plans, merchants and retailers, realtors, consumer credit reporting agencies, telephone service providers, advertising agencies, publishers, and cable and satellite TV companies.

"I believe Republicans have a better plan for financial regulatory reform. We are calling for an end to taxpayer funded bailouts and the ability of the government to pick winners and losers. It is time to put personal responsibility back into our free markets. The American people want accountability and responsibility on Wall Street -- not more federal bureaucracy and government control."

The Republican plan also includes Rep. Ron Paul's bill to audit the Federal Reserve, co-sponsored by Lummis, and adds new congressional oversight for its use of emergency authorities in the future. The ability to bail out specific institutions, picking winners and losers in the market, would no longer be an option. However, this plan was rejected by the Majority.

Additional Concerns with H.R. 4173

Harm to Small Businesses -- The legislation will exacerbate the credit crunch for small businesses, which will have more difficulty accessing necessary credit because they would be required to pay fees to the government to bailout their competitors.

Wage Controls -- H.R. 4173 allows regulators to determine compensation of all employees (not just executives) at financial institutions.

Permanent Bailout Fund -- The legislation creates a pre-funded $150 billion bailout fund which is paid for by all financial institutions with assets over $50 billion and hedge funds over $10 billion.

Does Not Include Needed Reforms of Fannie Mae and Freddie Mac -- The legislation does not make needed reforms of the GSEs (such as contained in the Republican plan).

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