Bailout Companies Pull A Geithner
Mar 20, 2009 Political
At least thirteen firms receiving bailout money from the US taxpayer have not paid their taxes following the stellar example set by Treasury Secretary Timothy Geithner.
At least 13 firms receiving billions of dollars in bailout money owe a total of more than $220 million in unpaid federal taxes, a key lawmaker said Thursday.
Rep. John Lewis, chairman of a House subcommittee overseeing the federal bailout, said two firms owe more than $100 million apiece.
“This is shameful. It is a disgrace,” said Lewis, D-Ga. “We are going to get to the bottom of what is going on here.”
The House Ways and Means subcommittee on oversight discovered the delinquent taxes in a review of tax records from 23 of the firms receiving the most money, Lewis said as he opened a hearing on the issue.
“If we looked at all 470 recipients, how much would they owe?” Lewis asked. AP
These companies were required to sign paperwork indicating they had no unpaid taxes but their tax records were never requested by the government. Now we are learning that they owe hundreds of millions of dollars in taxes.
I have no sympathy for those who fail to pay their taxes and neither does the government, unless of course the entity not paying them is a Democrat or “the smartest person in the room.”
I am perturbed however, that the Congress gins up anger over this issue when the target is a company in the US. I certainly believe the anger is warranted but where was all the anger when Tim Geithner was being confirmed. This guy deliberately did not pay his taxes and only ponied up the money (no interest or penalties) when he was selected to serve in the Obama administration.
Where is the indignation from the ethics committee investigating Charlie Rangel’s failure to pay taxes? Where was the indignation over Daschle not paying his taxes?
It seems to me that the government is selective in its anger over those who fail to pay taxes. There should be one standard for everyone. If these companies have not paid their taxes then they need to be held accountable and the taxes should be collected.
The same is also true for any entity that did not pay taxes. All these Democrats are running around pointing fingers but they don’t seem to be too interested in looking in a mirror.
How ironic is it that the government agency that Geithner is in charge of will be going after these unpaid taxes?
The bad thing is these companies will probably pay their taxes with the bailout money. They will use our taxes to pay theirs.
This is what happens when the government gets involved in private business.
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Obama And Dodd Are To Blame For AIG Mess
Mar 18, 2009 Political
There is a big uproar about the retention bonuses that were paid to AIG employees after the company received over 170 billion dollars of bailout money. There are a lot of players involved but Barack Obama and Christopher Dodd are the primary culprits in this mess. More on that later.
The idea of bailing out AIG or any other company did not appeal to me and I was against it from the start. There are many people who felt that we had to bail the companies out to keep the economic foundation from collapsing. To you folks who wanted this, you got what you deserved.
The government, that is the taxpayer, should not be bailing out companies. They make it on their own or they fail and someone else takes over. By allowing government intervention we have opened a Pandora’s Box. All that happens as a result of the government sticking its nose where it does not belong is that things get even more screwed up. Very few of the people in Congress have any experience actually running a business so this, coupled with the speed with which the first bailout was passed, was a recipe for disaster and a disaster it was. The people in Congress (along with the Bush administration) who wrote the bailout bill failed to provide oversight and they failed to ensure that there were strict guidelines as to how the money could be spent.
The Obama administration took over and he asked for more money to be released. He also, with reckless abandon, pushed a bill through that he dubbed a stimulus plan. That plan was absolutely needed and if it was not passed the world would come to an end, or at least this is how Obama presented it.
This is where Obama and Dodd assumed the liability for the mess. AIG employees were not paid bonuses because the issue was not addressed. They were paid bonuses because it was addressed and Dodd made sure they could get paid. Dodd added an amendment to the stimulus bill that specifically allowed the bonuses to be paid. The members of Congress were well aware of the bonuses that were due and they were aware last year when all this was being worked on. They ignored that issue until Dodd put these words in the bill:
Crack down on bonuses, retention awards and incentive compensation:
Bonuses can only be paid in the form of long-term restricted stock, equal to no greater than 1/3 of total annual compensation, and will vest only when taxpayer funds are repaid. There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.For institutions that received assistance totaling less than $25 million, the bonus restriction applies to the highest compensated employee; $25 million to $250 million, applies to the top five employees; $250 million to $500 million, applies to the senior executive officers and the next top 10 employees; and more than $500 million applies to the senior executive officers and the next top 20 employees (or such higher number as the Secretary determines is in the public interest). Fox Business (includes graphs showing who AIG donated money to. Now you know why Dodd added the amendment) [emphasis mine]
Dodd’s amendment allowed the bonuses to be paid. Let me write that again; Dodd added an amendment that allowed the bonuses to be paid.
Certainly the amendment had to be voted on so there is no excuse for people not to know that the bonuses were going to be paid. Obama pushed this bill through at light worker speed. The bill was over a thousand pages long and no one had time to read it before it was voted upon. Obama did not read it before he signed it. So what we have is a trail of incompetence.
Senator Dodd is now trying to get the money back. He suggested heavily taxing the money and that moron Chuck Schumer stated today that the new CEO of AIG had better convince the employees to return the bonuses or Congress was going to tax nearly 100% of it to ensure it got back to where it belongs “in the hands of the taxpayer.”
First of all, it will never get to our hands. Congress will spend it on something else. Second of all, why all this phony concern for taxpayers now? They had no concern for us when they passed the trillion dollar, pork laden, spending bill and they had no concern for us when they passed the omnibus and its 9000 items of pork. Why the righteous indignation now? And who does Dodd think he is to vocally oppose this when he added the amendment that allowed it to happen?
Obama and Dodd as well as all the other screamers (like Barney Frank and Chuck Schumer) are trying to cover up the fact that they screwed this up royally. They are now using the power of Congress to punish people who only got that to which they were entitled by virtue of a contract and a bill signed into law by Obama.
I don’t like the idea that AIG got the money and I don’t like the idea that these issues were not addressed when the original bailout was written and that they were not addressed correctly when the pork filled stimulus was crafted. But, the fact is, under the law, the people who received bonuses are entitled to them.
Another fact is that Obama, Dodd and the others are trying to put this on AIG when these morons knew this was going to happen. When the news broke and people started complaining these so called leaders all of the sudden acted like this was a shock to them. They acted like it was irresponsible and an affront to taxpayers when they all knew about it and they codified it; Dodd with the amendment, members for voting on it, and Obama for signing it.
Another thing to address is whether Congress can make a law that specifically taxes specific employees in one particular company. Does Congress have the authority to write a law that says that a certain group of people in a certain company must pay 90 or 100% tax on a specific bonus? I would imagine that this would be an issue for the Supreme Court to decide under the issue of equal protection.
If Congress can do this then what would stop them from deciding that that a certain job class or certain workers in other companies made too much money and then pass laws taking as much of that income as they wanted? This is a very important issue and it gets at the heart of just how much power Congress actually has.
If they screw these workers out of their bonuses (sorry folks but no matter how you feel about it, they are entitled to them) then they could be asking for trouble. Congress sunk 170 billion dollars in AIG because if AIG fails then the economy will follow it, at least according to those who pushed the bailout. What would stop AIG from saying screw it and closing its doors. What would stop them from just shutting down and causing turmoil? The government owns about 80% of the company now but the government can’t run it.
Speaking of owning 80% of the company, the entire issue shows just how wrong it was to bail them out in the first place. Government said they were buying up shares in companies in order to help them get back on their feet. We were told they had no interest in nationalizing these companies (at least no more than short term) and that government had no interest in controlling them.
Today Barney Frank said that we [the government] own 80% of the company and that it was time to exercise ownership and stop the bonuses from happening. This is nothing more than a push closer to socialism. Government tells you how much you can make and how much you have to give back. Government takes control of companies and decides what employees can or cannot do regardless of contractual obligations. Government erodes the freedoms that people enjoy and soon instead of building wealth government ensures that all of us are equally poor.
Those who voted for Obama, this is what you voted for. Those who wanted the bailouts, this is what you asked for. You have no right to complain and you have no right to be upset about what is taking place because you wanted this to happen.
As for those of you that are threatening the lives of AIG workers and directing your anger at them; you are wrong. Your anger should be directed at Obama and Dodd and everyone else who voted for the stumulus package. Dodd added the wording and Obama signed it into law. THEY KNEW ALL ABOUT IT FOR QUITE SOME TIME AND THEY ALLOWED IT TO HAPPEN.
Direct your anger at Congress and at Obama. They deserve your wrath.
As an aside, this is the second time not reading a bill has caused embarrassment. Obama issued an EO allowing federal funding of embryonic stem cell research and then signed the omnibus which specifically forbade using federal money to pay for it. He also signed the stimulus allowing the AIG employees to receive their bonuses.
One final point. If there are other companies with employees who had contracts for bonuses then they will be entitled as well. Dodd’s amendment was not specific to any company.
This is what happens when inexperienced, incompetent, self serving people run things. They gave us the financial meltdown and now this.
We need a do over. Let’s get rid of everyone in Congress and the Administration and replace them with competent folks.
**The Obama administration is claiming that it only found out about the bonuses a month ago despite media claims to the contrary. The bonus issue was known for quite some time by members of COngress and probably Geithner. Dodd certainly knew. He would have to know so he could take care of those who have contributed so much money to his campaign.
***Obama received 100 thousand dollars in donations from AIG
Also:
NewsMax
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Tags: aig, bailout, barney frank, contract, dodd, law, Obama, schumer, taxes
What Is The Big Deal About AIG Bonuses?
Mar 16, 2009 Political
Today the world is in turmoil because AIG is paying out 165 million dollars in bonuses that it is contractually obligated to pay. People are being whipped into a frenzy about this because AIG received about 170 BILLION dollars in taxpayer money as part of the bailout. The problem is, the government placed no restrictions on the money and now wants to dictate terms over existing contracts. If the government had provided proper oversight instead of handing out money like candy at Halloween then there would be room for this indignation but since it did not, oh well.
To be fair, the deal was made by the Bush administration and Obama inherited it but it was crafted by a Democratically controlled Congress. Many of the members of Congress (from both parties) who worked on this are still there and this is on them.
Barney Frank is claiming that the bonuses amount to rewarding incompetence. I think Frank’s pay is a reward for incompetence because he was instrumental in giving us this mess. In fact, nearly all of Congress gets rewarded for incompetence because people keep reelecting them.
The New York Attorney General, Andrew Cuomo, wants the names of all people getting bonuses. Cuomo is going to investigate whether any of the recipients had anything to do with the decline of the company. What does it matter? They had contracts and contracts are legally binding.
Barack Obama said this can’t be justified. It can if you go by the rule of law and see that Congress and the Bush administration allowed Hank Paulson to write the rules and gave him blank checks to hand out. These are the same people that forced solvent banks to take the money so that the ones who needed it would not be singled out as failing thus causing more problems. Wells Fargo paid lower dividends and owes a fortune in interest because money they did not need was forced upon them.
Regardless of all this I want to know what the big deal really is. My understanding is that the companies have to pay back the bailout money. If that is the case what does it matter how they spend it especially if there were no rules?
Additionally, I have heard a number of members of Congress defend the earmarks they added (to the stimulus and the omnibus) by stating that they are a small percentage of the overall sum. Commenters at this site have made the same claim in justifying the spending. If that is the case, the money AIG spent on bonuses is only a small percentage of what it received in bailout money and it is even a smaller percentage of the overall amount spent to bailout all banks.
If the Congress can justify 9000 earmarks by claiming they are a small amount of the total package why can’t AIG do the same with regard to the bonuses?
The bottom line is, both expenditures involve taxpayer money. There is no reason AIG should not be able to live by the same rules that Congress sets for itself.
The other reality is that Congress did a poor job of overseeing this. For all their whining about oversight and checks and balances, they certainly dropped the ball on this one.
Of course, they dropped the ball in the first place and that allowed the collapse to happen. Thank the indignant banking queen Barney Frank and his partner in crime Chris Dodd for that. The subprime problem and Freddie and Fannie toppled the financial world. The other problems were collateral damage.
Suck it up Obama, Frank (maybe that is not the right phrase to use with Frank) and the rest of you whiners. I did not like the idea of the bailouts to begin with and your lack of oversight in the process makes it even worse.
But, those folks had contracts and since you did not address them then it is unlikely you will be able to address them now.
A contract is a contract and all the bluster from Obama, Frank, and Cuomo can’t change that. They can say it amounts to rewarding incompetence but who allowed it to happen? Not providing proper oversight is the definition if incompetence.
As an aside, the government has given AIG the bailout money in about four installments. Do they expect us to believe that they could not have set some kind of rules on any one of those occasions?
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Tags: aig, bailout, barney frank, bonuses, cuome, incompetence, Obama
Will Homeowners Who Default Need To Have A Plan?
Feb 19, 2009 Political
Or for that matter, will Congress?
The big three auto makers went to Capitol Hill last year and begged for money. They were excoriated for using corporate jets to get to the meeting by people in Congress who use military jets to get around the world on the taxpayer dime. Nancy Pelosi is in Europe this week and she went there in an Air Force plane. She also took her family with her. I wonder who paid for that?
Congress spread a little money around and told the automakers that they needed to come back with a detailed plan that clearly laid out how they were going to conduct business. Congress wanted to ensure the companies had a methodology that would make them profitable and enable them to pay back the money. We can’t have these big shot executives spending money when they are going bankrupt. We can’t have them using hard earned tax dollars on half baked schemes. No, they need detailed plans that Congress can scrutinize.
It is an interesting concept and one worth exploring. Before I start, I was not and am not in favor of a bailout for the auto industry (or any other industry). I think that the market should sort it out and if a business goes under than another will come along to take its place. It is survival of the fittest. For a group of people who believes in evolution, this concept seems to escape their grasp.
Why is it that Congress is not placed on a plan? How is it they are able to spend over a TRILLION dollars in a spending bill that they did not read on things that will not stimulate? How is it that we are 10 TRILLION dollars in debt and they can still spend a TRILLION more as if it were nothing? Congress should have to submit a plan to the American people that clearly outlines how they intend to cut back. They should have to show how they are going to become responsible with our money just like the auto makers. I know Obama said he would go through the budget line by line but that was a lie in the ranks of “Its only a cold sore.”
He has not gone through the budget line by line. He has not looked at different government agencies to see which can be closed or downsized. He did not even go through the bill he signed line by line. He could not have considering all the other things he was doing while it sat on his desk (figuratively speaking).
Today though, Obama was in campaign mode once again. He prefers that because he is pretty good at it. We have seen him try the leadership thing over the past 4 weeks and he sucked at that. He got his head handed to him until he started campaigning again. He could not lead a group of people out of a burning building.
Unless you include his followers who blindly follow him like rats behind the Pied Piper.
In his campaign stop today Obama introduced his plan to reward irresponsible people. Obama unveiled his $275 BILLION dollar plan to assist people with their home loans. Obama will increase funding to Fannie Mae and Freddie Mac so they can lend money. That is what got us into this mess. At least some of his friends can get rich working there. Fannie and Freddie went from nearly $70 a share to 70 cents a share and their reckless actions helped fuel the collapse.
In addition, Obama will use the money of responsible taxpayers, the ones who pay their bills, and work to get the mortgages reduced in both principle and interest rate. Yes, Obama wants to readjust the principle people paid for their homes (lower the cost) and he wants to have banks refinance them at a much lower rate. It seems to me that the loan taken out on homes is a contract and both parties are obligated to live up to the agreement. That means if a person agreed to buy a house for a certain price then he is obligated to pay that price. The government does not belong involved.
If people bought homes that they could not afford then they need to suffer the consequences. If the government steps in and helps them out then the bad behavior is reinforced. You get more of what you subsidize and if the government starts reworking bad loans there will be even more of them. People will not learn and they will continue to do the same stupid things. What about those of us who pay our bills on time? What about those of us who did not buy more house than we could afford? We will have to pay the amount we agreed to pay and at the interest rate that was also agreed upon, as well we should. Everyone should have to pay what they agreed or they should sell their houses or have foreclosure take place. Too bad, so sad, sucks to be you. Why should the rest of us pay for YOUR mistakes?
What I want to know is what kind of plan do homeowners have to come up with? I mean, the auto makers had to make a plan to show they would be responsible and do better financially before they can get federal money. What do people who are helped with taxpayer money for their home mortgages have to do that is equal to what car makers have to do?
I think they should have to present a plan that details how they will ensure they will not get behind again and how they will not overspend or enter into foolish contracts again. The plan should include giving up cell phones, cable TV, FIOS, or Satellite. They should be forbidden from eating out at any restaurant including fast food joints. They should have to give up tobacco and alcohol and submit to random urine tests for nicotine and alcohol as well as any other drugs. Anything found should lead to serious consequences.
These people should also have to sell anything that is a luxury. If they have more than one TV or computer then the extra ones need to go. No iPods, no cell phones, and no PDAs. They should also have to sell any vehicle that is elaborate and get a small, low cost, fuel efficient model. It should also be required that they buy US savings bonds or some other investment vehicle so they can save for their future. Bonds are ideal because the money goes to the government and because they must be held for a certain amount of time and they have long maturity dates.
I am not trying to be a hard ass or anything but if I am going to be footing part of this bill then I am becoming a part owner in their homes so I get a say in how they live (as do all other taxpayers). They can take their own decisions when they pay their own bills.
This deal should also require recipients to give up any other government benefit with regard to taxes. They should lose the Earned Income Credit and any other similar deduction. They will be getting enough help from taxpayers so they should get no more.
There can be many more conditions to receive this mortgage assistance and I encourage people to list their ideas in the comments section.
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Governor Jindal Might Just Say No To Stimulus Bucks
Feb 19, 2009 Political
Louisiana Governor Bobby Jindal has indicated that his state might not take the $4 Billion that it is slated to get under Obama’s Generational Debt Plan. Jindal stated that he would have to review the money and see where it is to go and what strings are attached to accepting it. I imagine he would be more willing to take it if it were designated for infrastructure and not so much if it were designated for welfare.
This is a wise move since the federal government might tie all kinds of conditions to the money or state exactly where it has to be spent. This country was set up with a centralized federal government and (eventually) 50 separate and distinct state governments. The states are supposed to be responsible for a lot of the spending that goes on within their borders. If the feds start handing out money like candy then the states become wards of the federal government which can then attempt to dictate how certain things are done.
It is irresponsible for states to make up their budget deficits off the backs of the taxpayers from other states. People in 49 other states had nothing to do with the failed policies that led to the collapse of California. That state needs to fix its own problems. Forcing us to pay for their problems (or the problems of any other state) does nothing more than enslave taxpayers. A portion of our earnings, the fruits of our labor, is being confiscated from us and given to states that cannot manage a budget.
Bailout money to the states keeps them from being forced to take the tough decisions that need to be made in order to become fiscally sound. Instead of making appropriate cuts in spending and workforce, the states will sit back and give residents more of the same stuff that caused the problem in the first place. Governor O’Malley of Maryland and his Democratic legislature are sitting around salivating at the chance to sink their teeth into the bailout money so they can spend, spend, spend. It is shameful and demonstrates a complete lack of leadership.
While Jindal has indicated that he might not accept the federal money the welfare king Ray Nagin said he will take all the money the state does not want. I guess the hundreds of millions of dollars that were forcefully extracted from taxpayers from other states and sent New Orleans did not quite meet the needs of of Nagin and his cronies. Now he wants 4 billion more to waste on his poverty torn hell hole. It was wrong to send taxpayer money to NO in the first place and it would be a travesty for him to get anything else. However, I would not oppose taking the 4 billion and spending it on construction crews to use bulldozers to fill in NO.
I hope Jindal sticks to his guns and works out his state’s problems without taking the money. It would be refreshing to see a responsible politician for a change, I mean in addition to Sarah Palin.
Palin? That woman that makes the left cringe. The one who they think is dumb? The one who was savagely attacked by the media?
Yep, that is she. Her state of Alaska has enough money squirreled away to weather the economic problems even if they extend for a few years.
There is an interesting thing to see. The governor that the left is so afraid of that they engaged in character assassination has run her state so well that it is in better shape than states run by their wonderful Democrats or the RINO in California. In addition, her state is doing better than New York, Maryland, Kansas, and a number of others who are standing around waiting to put their hands in our pockets.
To be sure, Palin said that her state would take the approximately 1 billion dollars in stimulus money if it were designated for the right things like infrastructure and transportation. She is wary of accepting it for social programs that the state will have to pay for once the money is gone. It is going to be tougher for Palin because the price of oil is down but since the state saved some of the money it made when oil prices were up it is in better shape to ride out the economic storm.
The state currently has $6.6 billion in its constitutional budget reserve fund that it could tap into. A few billion dollars more also is available from other pockets, said Juneau economist Gregg Erickson, a longtime Alaska budget watcher.
Given Alaska’s robust reserves, the state is well-prepared to weather the next two years, Erickson said. As to how long reserves will last after that, there are too many factors involved to say for sure. AP
We will see how well she does in the tough times but she is smarter than liberals give her credit for. She is at least smarter than all the governors who are running in the red.
As an aside, why does California not just spend a bunch of money? It has about 45 billion dollars in debt so it should spend 2 or 3 hundred billion more to get back on sound footing.
After all, that is what Obama is doing to fix the problems in the rest of the country.
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Tags: bailout, irresponsible, jindal, Obama, oil prices, palin, stimulus