In particular, the federation challenges many of the elements of Treasury Secretary Henry Paulson\'s $700 billion plan, including its undemocratic provisions and lack of accountability for the financiers who caused the current financial mess.
"For most working families, the economy has been in a meltdown for quite some time: they have seen their jobs outsourced, their wages decline, their benefits disappear, their homes foreclosed and the American Dream becoming more remote," the Change to Win Leadership Council said in a statement released Tuesday.
"Now, the Bush administration wants us to pick up the tab to bail out Wall Street, with no strings attached. Congress should not give the administration a blank check. It needs to structure a bailout plan that will actually work to stabilize the financial sector without leaving taxpayers holding the bag. And it needs to provide relief to the real victims of this crisis – the working families whose homes are now at risk of foreclosure."
Calling Connecticut Senator Christopher Dodd\'s proposal "a good starting point," the federation outlined these principles:
• Taxpayer money; taxpayer accountability. No plan should give the Treasury Secretary unfettered discretion or unduly insulate Treasury\'s implementation from accountability to the courts and Congress. Lawmakers should create an independent oversight board that includes nongovernmental representatives, with the authority to review and approve the Treasury Secretary\'s decisions and to create rules that will prohibit gaming of the bailout. Some details should be written into the law; for example, the mechanism by which troubled assets purchased by Treasury will be priced should be specified, and regulations should be required to be issued by a date certain, with fast track rules for consideration by the Congress.
• Taxpayers share in the upside. If a firm wants the benefit of being able to unload bad debt onto the federal treasury, then taxpayers should gain a proportional equity interest in that firm. This will ensure that if the bailout works and the firms become profitable, taxpayers, not simply bankers, benefit from the upside, and the treasury can recoup some of its losses.
• Prevent this from happening again. No bailout should go forward without a comprehensive, regulatory overhaul of the entire financial system, including revised capital requirements, leverage limits, increased transparency, and limits on compensation schemes. Hedge funds and private equity firms should not be eligible to participate in the bailout and should be subject to meaningful regulation.
• Curb excessive CEO pay. Wall Street executives − especially those who brought us this mess − shouldn\'t be pocketing millions while asking taxpayers to bail them out. Any firm that applies for relief must agree to limit the total compensation of all executives.
• Aid the victims, not just the predators. No bailout of the banks can take place without a freeze on foreclosures and changes to allow bankruptcy courts to require banks to renegotiate the terms of bad mortgages so that people can stay in their homes.
• Protect pension plans. Pension plans have significant assets invested in the financial sector, and may have incurred large losses as a result of the meltdown. Funding rules should be modified to give plans adequate time to make up funding shortfalls tied to the mortgage meltdown. In addition, Congress should ensure the Pension Benefit Guaranty Corporation (PBGC) has sufficient funds to meet any increased obligations.
• Invest in the real economy. This bailout should not be used as yet another excuse not to make critical investments in our future. A major public investment − in developing new energy and conservation, rebuilding schools and infrastructure, extending unemployment and food stamps, and helping states avoid crippling cuts in police and health services − is vital to get the real economy moving and put people back to work. There should be no bailout without an agreement to pass a stimulus package before adjournment.
Change to Win is a six-million member partnership of seven unions founded in 2005 to represent workers in the industries and occupations of the 21st century economy. The seven affiliated unions are: Service Employees International Union, UNITE HERE, United Food and Commercial Workers International Union, International Brotherhood of Teamsters, Laborers\' International Union of North America, United Brotherhood of Carpenters and Joiners of America and United Farm Workers of America.
For more information
Visit www.changetowin.org
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In particular, the federation challenges many of the elements of Treasury Secretary Henry Paulson\’s $700 billion plan, including its undemocratic provisions and lack of accountability for the financiers who caused the current financial mess.
"For most working families, the economy has been in a meltdown for quite some time: they have seen their jobs outsourced, their wages decline, their benefits disappear, their homes foreclosed and the American Dream becoming more remote," the Change to Win Leadership Council said in a statement released Tuesday.
"Now, the Bush administration wants us to pick up the tab to bail out Wall Street, with no strings attached. Congress should not give the administration a blank check. It needs to structure a bailout plan that will actually work to stabilize the financial sector without leaving taxpayers holding the bag. And it needs to provide relief to the real victims of this crisis – the working families whose homes are now at risk of foreclosure."
Calling Connecticut Senator Christopher Dodd\’s proposal "a good starting point," the federation outlined these principles:
• Taxpayer money; taxpayer accountability. No plan should give the Treasury Secretary unfettered discretion or unduly insulate Treasury\’s implementation from accountability to the courts and Congress. Lawmakers should create an independent oversight board that includes nongovernmental representatives, with the authority to review and approve the Treasury Secretary\’s decisions and to create rules that will prohibit gaming of the bailout. Some details should be written into the law; for example, the mechanism by which troubled assets purchased by Treasury will be priced should be specified, and regulations should be required to be issued by a date certain, with fast track rules for consideration by the Congress.
• Taxpayers share in the upside. If a firm wants the benefit of being able to unload bad debt onto the federal treasury, then taxpayers should gain a proportional equity interest in that firm. This will ensure that if the bailout works and the firms become profitable, taxpayers, not simply bankers, benefit from the upside, and the treasury can recoup some of its losses.
• Prevent this from happening again. No bailout should go forward without a comprehensive, regulatory overhaul of the entire financial system, including revised capital requirements, leverage limits, increased transparency, and limits on compensation schemes. Hedge funds and private equity firms should not be eligible to participate in the bailout and should be subject to meaningful regulation.
• Curb excessive CEO pay. Wall Street executives − especially those who brought us this mess − shouldn\’t be pocketing millions while asking taxpayers to bail them out. Any firm that applies for relief must agree to limit the total compensation of all executives.
• Aid the victims, not just the predators. No bailout of the banks can take place without a freeze on foreclosures and changes to allow bankruptcy courts to require banks to renegotiate the terms of bad mortgages so that people can stay in their homes.
• Protect pension plans. Pension plans have significant assets invested in the financial sector, and may have incurred large losses as a result of the meltdown. Funding rules should be modified to give plans adequate time to make up funding shortfalls tied to the mortgage meltdown. In addition, Congress should ensure the Pension Benefit Guaranty Corporation (PBGC) has sufficient funds to meet any increased obligations.
• Invest in the real economy. This bailout should not be used as yet another excuse not to make critical investments in our future. A major public investment − in developing new energy and conservation, rebuilding schools and infrastructure, extending unemployment and food stamps, and helping states avoid crippling cuts in police and health services − is vital to get the real economy moving and put people back to work. There should be no bailout without an agreement to pass a stimulus package before adjournment.
Change to Win is a six-million member partnership of seven unions founded in 2005 to represent workers in the industries and occupations of the 21st century economy. The seven affiliated unions are: Service Employees International Union, UNITE HERE, United Food and Commercial Workers International Union, International Brotherhood of Teamsters, Laborers\’ International Union of North America, United Brotherhood of Carpenters and Joiners of America and United Farm Workers of America.
For more information
Visit www.changetowin.org