Sen. Baucus Calls Bailout Bill "Improved"
Tax Quote of the Week
"A sales tax is a tax on the freedom of purchase."
- Felix Frankfurter
Sen. Baucus Calls Bailout Bill "Improved"
Senate Finance Committee Chairman Max Baucus (D-MT) was modestly positive about H.R. 1424, the bailout bill designed to save the American banking industry.
He noted, "There are really only two good things to say about the passage of this legislation - first, that Congress has at least done its job in taking action to keep the current financial crisis from hitting folks at home even harder and second, that we insisted on improvements to protect and provide tax relief to America's working families in this time of economic hurt. It is still outrageous that Wall Street greed was allowed to run rampant and force the need for this rescue plan in the first place."
Sen. Baucus noted approvingly that the "Emergency Economic Stabilization Act of 2008" did include alternative minimum tax (AMT) relief, incentives that will create jobs, encouragement of solar, wind, geothermal and other alternative energy and business tax cuts that will assist in job formation. However, he suggested that no one in Congress should feel "satisfied" with the bailout bill.
As a result of demands by Sen. Baucus and other members of Congress, the bailout bill includes several specific protections. A Special Inspector General with authority to audit the Troubled Asset Recovery Program (TARP) will have complete independence and the budget to protect the taxpayers.
There are also specific limits on executive compensation and "golden parachute" packages for executives. Finally, community banks that invested in Fannie Mae and Freddie Mac will be permitted to deduct ordinary income losses on those investments. This will reduce the risk that small community banks would become insolvent due to these losses.
Editor's Note: Sen. Baucus is clearly very upset over the bailout. He was particularly incensed when it was disclosed that immediately after receiving billions of dollars in loans from Treasury, executives of financial services company AIG had frolicked on a $400,000 holiday at a western resort. Sen. Baucus sent a letter to Treasury Secretary Paulson and asked whether or not the executives could be fired. He exclaimed, "I want to know who we can fire and how we can get this misspent money back, and I want both of those things to happen pronto."
Sen. Grassley - Bailout a "No-Brainer"
Sen. Charles Grassley (R-IA) is the Ranking Republican on the Senate Finance Committee. He supported the bailout and noted, "This legislation was a no-brainer."
In view of Sen. Grassley, the AMT relief and tax extenders such as the teacher expense deduction, sales tax deduction and college tuition deduction will help "millions of taxpaying families."
In addition, the act will provide business "job-creating incentives" and send "a clear signal" to the nation on the importance of alternative energy. Finally, he was very pleased with the provisions to assist in the Midwest disaster recovery.
Editor's Note: As the senior senator from Iowa, Sen. Grassley was closely involved in the development of a $4.6 billion disaster relief package for Iowa and nine other Midwestern states who faced major damages from spring flooding and tornadoes. The bailout bill was temporarily held up by senators from Texas and other states because the initial funding was allocated only to the Midwest and would not cover damages from hurricanes in the Southeast. However, the final bill was passed after $3.5 billion was allocated to other disasters nationwide.
