WASHINGTON – Major progressive, labor and consumer rights leaders joined forces today to demand important corrections to the Bush administration’s financial rescue proposal despite warnings from the administration’s top economists who got us into this mess.
The groups, representing more than 20 million Americans, sent a letter to members of Congress today urging them to require basic conditions before agreeing to any financial bailout request. The groups also announced that hundreds of events will be held across the country on Thursday to demand conditions on the bailout.
With a groundswell of opposition forming around the Bush administration’s $700 billion bailout request, Campaign for America’s Future co-director Robert Borosage said Congress must not write President Bush a blank check for $700 billion without conditions.
“The financial crisis won’t go away on its own and doing nothing is not an option. Neither is writing a blank check for $700 billion to the same folks who got us into this mess, especially without a clear system of oversight and accountability.” said Borosage. “This is common sense. If American taxpayers are asked to bail out the financial industry, at the very least, we deserve to know how our hard-earned money will be spent.”
Representatives from top progressive and labor groups– including the Campaign for America’s Future, AFL-CIO, SEIU, AFSCME, AFT, NEA, ACORN, Alliance for Justice, Center for American Progress and Center for Community Change — met at an emergency closed-door meeting yesterday to develop a statement of principles for bailing the American economy out of its financial woes.
The statement urges Congress to insist on public oversight and transparency, taxpayer protections and equity, regulations to ensure this doesn’t happen again, major public investments to support the economy, increased accountability for executives and directors and aid for homeowners who were misled by predatory lenders.
More than 35 leaders signed the statement, including Borosage, AFL-CIO president John Sweeney, SEIU president Andy Stern, AFSCME president Gerald McEntee, United Steelworkers president Leo Gerard, ACORN president Maude Hurd, Center for American Progress president John Podesta, Center for Community Change president Deepak Bhargava and USAction president William McNary.
TEXT OF LETTER
DEMANDING BAILOUT CONDITIONS
A Call for Common Sense
Every man, woman, and child in America is now being told to ante up $2,000 – an estimated $700 billion in all – to bail out Wall Street’s recklessness, or the very people who created this crisis are telling us that they will bring down our entire economy.
The Treasury Department’s proposal that the Secretary be given essentially unlimited authority to spend $700 billion to bail out any financial institution across the world is irresponsible and unacceptable.
We urge the Congress to insist on some basic conditions for any bailout.
- Public Oversight. This kind of power can never be centralized in a single individual – much less one who did not even stand for election. Any funds must be controlled by an independent entity, with consumers and workers given seats on its board. Congress should be empowered to name independent monitors and to approve all board members.
- Protect the Taxpayer. The Treasury bill would have taxpayers buying paper that nobody else wants at prices far above its current value. If a firm wants to auction off its toxic paper to the US Government, taxpayers should get equity in that firm equal to any amount paid in excess of the paper’s value. This will deter profitable firms from using the government as a dumpster for their toxic paper. And it will insure that if the bailout works and the firms become profitable, taxpayers, not simply bankers, benefit from the upside.
- Curb the casino. This crisis was caused because sensible regulations of the banking system that worked for dozens of years were dismantled or went unenforced. No bailout can go forward without requiring the necessary regulation to insure this does not happen again. Any institution, which receives assistance, should agree to come under a microscope going forward in terms of disclosure requirements, and it should have stringent capital requirement imposed upon it.
- Invest in the real economy. Ending the bankers strike is not sufficient enough to avoid the recession into which we have been driven. Major public investment in new energy and conservation, rebuilding schools and infrastructure, extending unemployment and food stamps, helping states avoid crippling cuts in police and health services – is vital to get the real economy moving and put people back to work. No bailout should proceed without being linked to support for a major public investment plan to get the economy going.
- Hold CEOs and Boards of Directors Accountable. Wall Street CEOs shouldn’t be pocketing millions while taxpayers are forced to bail them out. Any firm that applies for relief must agree to cancel all stock option programs and CEOs should have stringent limits placed on their compensation until the Company has repaid all taxpayer assistance.
- Aid the victims, not just the predators. Both bankers and home owners made foolish bets that home prices would keep rising. Many homeowners, however, were misled by predatory lenders into taking mortgages that they didn’t understand and couldn’t afford. It would be simply obscene to help the predators and not those that they preyed upon. No bail out of the banks should take place without measures to help people in trouble stay in their homes. Explicit provisions should ensure use of the full array of financial and legal tools available to the government to stop foreclosures and restructure home mortgage loans for ordinary Americans, including amending the bankruptcy code to allow judges to modify mortgages. Where workouts are not feasible, people should be allowed to stay in their homes as renters.
—Robert Borosage, co-director, Campaign for America’s Future
—John Sweeney, president, AFL-CIO
—Andy Stern, president, Service Employees International Union (SEIU)
—Gerald McEntee, president, Am. Fed. of State, County and Municipal Employees (AFSCME)
—Randi Weingarten, president, American Federation of Teachers (AFT)
—Larry Cohen, president, Communications Workers of America (CWA)
—Dennis Van Roekel, president, National Education Association (NEA)
—Leo Gerard, president, United Steelworkers (USW)
—Maude Hurd, national president, ACORN
—Nan Aron, president, Alliance for Justice
—Amy Issacs, national director, Americans for Democratic Action
—Kevin Zeese, executive director, Campaign for Fresh Air & Clean Politics
—John Podesta, president, Center for American Progress Action Fund
—Deepak Bhargava, president, Center for Community Change
—Deborah Weinstein, executive director, Coalition for Human Needs
—Donald Mathis, president, Community Action Partnership
—Jane Hamsher, firedoglake.com
—James D. Weill, president, Food Research & Action Center (FRAC)
—Brent Blackwelder, president, Friends of the Earth
—John Cavanagh, director, Institute for Policy Studies
—Sarita Gupta, executive director, Jobs with Justice
—Wade Henderson, president, Leadership Conference on Civil Rights
—Carissa Picard, esq., president, Military Spouses for Change
—Sally Greenberg, executive director, National Consumers League
—Christine L. Owens, executive director, National Employment Law Project
—Gary Bass, executive director, OMB Watch
—Adam Lioz, program director, Progressive Future
—Joanne Carter, executive director, RESULTS
—William McNary, president, USAction
—Paula Brantner, executive director, Workplace Fairness
—Dan Cantor, executive director, Working Families Party
—Mark Lotwis, executive director, 21st Century Democrats