Troubling financial system plan introduced to Congress
Published 9:05 pm Monday, March 30, 2009
By By Jo Bonner
Treasury Secretary Timothy Geithner unveiled a sweeping overhaul of the regulatory framework of the nation’s financial system last week.
The plan would call on Congress to grant the Treasury Department unprecedented regulatory powers to take over major non-bank financial institutions - such as large insurers, investment firms, hedge funds, private equity firms and venture capital firms - as well as the private derivatives market.
Under the proposal, the Treasury secretary would be given the authority to wind down major non-bank financial institutions that are failing.
The Treasury secretary and the Federal Deposit Insurance Corp. (FDIC) would determine whether to provide financial assistance or put the financial institution into conservatorship or receivership.
The Department of Treasury’s authority to seize troubled banks has been expanded during the current economic crisis.
Now, Secretary Geithner seeks to make that expanded authority permanent. This, in my view, is another overreaching action of the new administration. While we surely need to reexamine the way our financial markets are regulated, we must strongly avoid overregulation. We must preserve the free market tenets that made our economy the world’s most powerful.
Empowering the executive branch to manage private sector business is government intrusion into the free market. While I recognize reform must occur, I have little confidence in the path this administration has taken thus far.
I look forward to working with House Republicans to temper the administration’s initiative.
Irresponsible budget approved
Both the House and Senate Budget Committees last week approved the president’s budget, a budget that spends too much, taxes too much and borrows too much.
Earlier this month, the nonpartisan Congressional Budget Office (CBO) released a report that the $3.6 trillion budget proposal will run a deficit of $9.3 trillion – $2.3 trillion more than initially claimed by the White House.
This would lead to unprecedented borrowing, with debt held by the public increasing from 41 percent of GDP in 2008 to 82 percent of GDP in 2019.
In fact, the president’s budget will create more gross debt in 10 years than that created by every other president from George Washington to George W. Bush - combined.
According to “The Washington Post,” Congressional Democrats are resorting to “gimmickry” in an attempt to make the budget “look better on paper.”
Last week, Republicans introduced a plan outlining our principles for curbing spending, creating jobs, lowering taxes and controlling debt.
My colleagues and I have submitted an alternative, “Republican Road to Recovery,” a recovery plan that addresses our most pressing national challenges - providing universal access to affordable health care, protecting the long-term stability of our entitlement programs and ensuring affordable energy for all Americans.
Now more than ever, we need to return to the basic principles of limited government and personal responsibility that made our nation great and will make it great once again.
High school leaders workshop
With over 220 students in attendance, my annual Workshop for High School Leaders, held at Weaver Auditorium on the campus of the University of Mobile, was a tremendous success.
For a quarter century, this workshop has been a fixture in the First Congressional District, providing high school government and journalism students the opportunity to question representatives from all levels of state and federal government, as well as members of the Gulf Coast broadcast and print media.
Team Focus co-founder, Mike Gottfried gave the keynote address. As the CEO of the Mobile-based community outreach program that provides a positive role model to young men without a father at home, Coach Gottfried talked with the students about leadership.
WALA Fox 10’s Bob Grip moderated a legislative panel with Alabama Representatives Randy Davis, Chad Fincher, Jamie Ison, and Harry Shiver.
WALA Fox 10’s Lenise Ligon, WKRG TV-5’s Tiffany Craig, and the Press-Register’s Frances Coleman led the students in a discussion of the importance and impact of news organizations on today’s society.
Our guests certainly helped make this year’s workshop one of the best, and plans are already underway for next year’s workshop.
My staff and I work for you. If we can ever be of service, do not hesitate to call my office toll free at 1-800-288-8721 or visit my website at http://bonner.house.gov.
Jo Bonner is a U.S. congressman. His column appears weekly.