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Dec 23, 2008 8:05 pm US/Eastern
Lawmakers Uneasy As Banks Push For More Help
MIAMI (CBS4) ―
"Bah-humbug." That sums up the growing sentiment of many Americans and their lawmakers regarding the $700 billion bailout of Wall Street and the banking industry.
We caught up with Miami Republican congresswoman Ileana Ros-Lehtinen Friday for her take on how money has been spent so far. "It is amazingly obscene," she said, "what Wall Street and the banking industry have done with the bailout money."
A harsh judgment to be sure, especially coming from someone who first voted "no", then was convinced to vote "yes" on the emergency bailout package a few months ago. Now Ros-Lehtinen, like many Americans, fumes when she sees headlines like the one in USA TODAY. It read: "Banks Won't Say How They Spend Federal Bailout Funds." Ros-Lehtinen remarked, "For those of us who voted for the bailout—the $700 billion dollar bailout—I have nothing but regret, disappointment and anger over the way the money has been treated."
In short, a great many people are asking about accountability for how the money has been spent, or hoarded, depending on your point of view. Many others are asking why Congress did not demand much tougher guidelines before doling out money to the nation's big banks. Suffice it to say, lawmakers are now feeling the heat from constituents who say they still can't get a home loan, auto loan, or college loan for the kids.
Case in point:
CBS4's Michael Williams talked with a young colleague who exemplifies the upside-down nature of the bailout. She and her husband are both gainfully employed, hard-working, up and coming professionals. They're expecting their first child and would like to buy a home. Fat chance of that right now they tell me. Bank loans aren't to be found because credit markets are still frozen for many. Those are the same credit markets the bailout money was supposed to thaw.
Remember, though, that only half of the $700 billion in bailout money has been spent so far. The other half--$350 billion worth—will require a new vote in Congress before it can be spent. That will be a tough sell to Ros-Lehtinen and more than a few of her Democratic Party colleagues. As it stands now she says, "It is highly doubtful I would vote for it."
That skepticism, in turn, may at least temporarily slow President-elect Barack Obama's plans to spend anywhere from $600 billion to $1 trillion dollars on a new, separate economic stimulus package. Ros-Lehtinen scoffs that "the plan is not a plan…it's a price tag." Burned by a bailout backlash, that sentiment is bound to grow.
Such talk will worry many communities looking for a badly needed jobs boost. For instance, a $1 billion dollar tunnel project at the Port of Miami has been scuttled by state officials. There is hope it could be revived with federal stimulus money, which would offer the prospect of jobs in the short-term and more business growth over the long haul. Miami commissioner Marc Sarnoff says, "The tunnel project, as a result of the state pulling out, the federal government could step in and we could be breaking ground in nine months on the project." Sarnoff is one of a growing legion of lawmakers—local, state and federal—who argue now is the precisely the time to use an Obama-led stimulus package to rebuild crumbling infrastructure.
That is a debate worth having. It is also one that will be tougher to have now. The reason is simple: Lawmakers from Capitol Hill to the Treasury Department and the White House were not tough enough. They were not insistent enough about demands and expectations before your tax money started flowing to a financial community quick to line up for a handout, but far less inclined to put the money back into the hands of ailing Americans.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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