Oklahoma City_Press Release_State Sen. Andrew Rice, Democratic nominee for U.S. Senate, said today that Congress should continue working to strengthen the financial bailout plan to ensure that Wall Street faces consequences for reckless investments and taxpayers reap rewards for bailing them out.
Rice said that, as U.S. Senator, he would only support a plan that includes: Meaningful oversight; a Stake for Taxpayers; and Hard Limits on Executive Compensation. Unfortunately, the final version of the bill that was released to the public Sunday does little to limit executive compensation for firms accepting a taxpayer bailout. In fact, the primary effect may be merely to decrease the amount such companies can deduct from their taxes for executive pay from $1 million to $500,000. Furthermore, the bill does nothing to fix the broken system that allowed abusive and reckless loans, an explosion of risky investments and poorly understood financial instruments, and other excesses.
"This bill gives too much away to the people who created these problems without guaranteeing that it won't happen again," Rice said. "Any bill would need to require much tougher consequences for Wall Street in order to earn my support."
Rice believes that if the Bush Administration and Congress are going to ask American taxpayers to foot a $700 billion bill to bail out financial institutions and the privileged few, the least our leaders in Washington can do is ensure executives are not rewarded for their failures.
"Taxpayer dollars should not be used to line the pockets of the corporate executives who helped create these problems," Rice said. "A message must be sent to Wall Street that reckless speculation and greed will no longer be rewarded."
According to Bloomberg News, the top five firms on Wall Street paid out more than $3 billion to top executives in the past five years. All of those executives worked at firms that were involved in selling the mortgage-backed securities at the heart of the current crisis.
Much of this economic crisis is the result of policies supported by Jim Inhofe during his 22 years in Washington. Inhofe repeatedly blocked legislation and measures that would have provided oversight of our financial markets and stopped predatory lenders and institutions from recklessly gambling Oklahoma's economic future.
An example of one such policy that has been particularly devastating was a 1999 bill, which Jim Inhofe supported, called the Financial Modernization Act. The act repealed the New Deal era law that kept commercial and investment banks separate.