- The Washington Times - Monday, September 22, 2008


Congressional leaders were locked behind closed doors all weekend listening to Treasury Secretary Henry Paulson convince them that taxpayers will need to open their wallets to save the finance industry. President Bush asked taxpayers on Friday and on Saturday during his radio address to face the burden and help save banks and their investment executives that sold and bought risky futures-based investment packages backed by loose credit and handshakes. The estimated cost of the rescue plan - between $500 billion and $1 trillion - would be the costliest in American history. By comparison, the bailout of the Great Depression was more than $500 billion (in today’s dollars), the S&L rescue cost $150 billion. So, there is no doubt that the emergency plan Congress is now deliberating will be the most intrusive. Moreover, it could add $700 billion to the deficit.

While Democrats and Republicans continue to finger-point, Americans demand solutions to this complex problem. The principles of fiscal conservatism must not be tossed to the wind. On the other hand, Bush administration and congressional leaders should look toward the Commodity Futures Modernization Act of 2000, which was introduced by Republican Sens. Richard Lugar of Indiana, Peter Fitzgerald of Illinois, Phil Gramm of Texas and Chuck Hagel of Nebraska, as well as Democratic Sens. Tom Harkin of Iowa and Tim Johnson of South Dakota. Lawmakers slipped the 200-plus-page legislation into an omnibus package on Dec. 15, 2000, in the midst of the maelstrom of the Al Gore vs. George W. Bush election and Florida recount. The bill allowed banks to offer mortgage-backed securities, credit default swaps, insurance policies against default on risky investments, debentures, etc. without the burden of being regulated as futures contracts. Eight years later, leaders on both sides of the aisle want hardworking Americans to bail them out and overlook their lack of oversight.

We stand as steadfast as always on the side of free markets and the least amount of regulation regarding commerce. But the Commodity Futures Modernization Act has seemingly removed some necessary regulation.

Sen. Richard Shelby had it right Friday when he said: “Up to now, I believe the Fed chairman, in all due respect to him and the Treasury secretary, have been jumping from crisis to crisis like putting out a brush fire rather than have some comprehensive plan.”

The problem is complex; the solution is simple: Congress needs to stay in Washington and deliberate until legislation has been crafted, voted on and delivered to 1600 Pennsylvania Avenue.

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