McHenry County Blog

The Democrats’ arrogance about dishing out bailout money continues full throttle.

They recently gave large credit unions $ 30 billion of guarantees.
There’s more.

“Friday’s moves include the seizure of three wholesale credit unions, plus an unusual plan by government officials to manage $50 billion of troubled assets inherited from failed institutions.”

By the time an Obama bureaucrat calls something a “troubled asset,” you can bet it’s a toxic debt.

Congratulations taxpayers! You now own another $50 billion of near worthless paper. The Democrats’ “financial reforms” didn’t fix any of this.

They only had two years and 15 months after the recession officially ended.

So, how diverse is federal representation of McHenry County?

Here are two replies to a constitution comment in opposition to the Democrats’ Federal Bailout bill:

First, 16th District Congressman Don Manzullo’s answer:

Thank you for contacting me in opposition to the American Recovery and Reinvestment Act of 2009 (H.R. 1). It is good to hear from you.

I agree with you 100 percent. I am deeply disturbed that this so-called “stimulus” bill focuses more on spending taxpayer dollars than on returning Americans to work.

According to the non-partisan Congressional Budget Office, H.R. 1 will spend $1.1 trillion of taxpayer dollars and does little to stabilize our economy, spur significant job creation, or provide taxpayers an economic result that is worthy of their investment.

H.R. 1 is simply chocked full of hundreds of billions of dollars for programs that generally receive funding through the regular annual budget process (where programs are evaluated with regard to the money that is budgeted), and should not have been incorporated into an emergency stimulus bill, whose costs go directly to the deficit.

For these reasons, I opposed H.R. 1 when it passed the House floor by a 246 to 183 vote on February 13, 2009.

Instead, I voted for a pro-growth economic alternative package authored by Representatives David Camp and Eric Cantor that would provide relief to those who need it most: middle-class families, job seekers, small businesses owners, the self-employed, and homebuyers.

At a fraction of the cost, this alternative would create 6.2 million new jobs by the end of 2010, which is twice the goal sought by President Obama. Unfortunately, the Camp/Cantor substitute amendment to H.R. 1 failed by a vote of 170 to 266.

On February 17, 2009, President Obama signed H.R. 1 into law (Public Law 111-5).

Thank you again for contacting me about this issue. Your input is important to my work here in Washington.

Now, compare that with the response from Illinois’ leading Democrat in Congress, U.S. Senator Dick Durbin:

Thank you for writing to me about the Congressional response to the crisis in our nation’s financial markets. I understand your concerns and appreciate hearing from you.

The seeds of the financial crisis were sown when the mortgage industry began offering large numbers of subprime mortgages that were very profitable in the short run but unsustainable in the long run. The failure of the Bush Administration to properly regulate the mortgage markets allowed these subprime mortgages to flourish. When the house of cards began to fall, the devastation was swift and far-reaching and it has extended far beyond the subprime market.

As major financial firms began to totter, the head of the Federal Reserve and the then-Secretary of the Treasury told the leadership of the House and Senate that if we did not act quickly, the American economy could melt down and the global economy as well. It was sobering news.

Congress has made substantial changes to President Bush’s initial proposal to increase accountability and the transparency with which the funds are used.

I supported the stabilization package because the alternative – doing nothing – would have been an abdication of responsibility in the face of our nation’s worst economic crisis since the Great Depression. Without action, the credit markets would tighten further, devastating many families and businesses. The problem is not just the declining value of people’s retirement savings, although that genuine concern is already affecting people’s retirement decisions. The deeper problem is that without adequate access to credit, small businesses are unable to make payroll and must begin laying off workers; students cannot obtain needed student loans; auto loans and mortgages dry up; and businesses begin to fail because they can no longer finance day-to-day operations.

Congress has held hearings to investigate the practices that led to the demise of companies such as AIG, Fannie Mae, and Freddie Mac, and to identify further reforms to restore the integrity of our financial markets. Our financial system requires a fundamental overhaul, so that the needs of American families stand above the interests of Wall Street. We must do more to address the needs of the homeowners who were caught up in the tricks and traps of the subprime mortgages Wall Street companies peddled so profitably. I continue to work for further reforms to reduce the foreclosure rate.

I plan to reintroduce legislation this year that would create a Consumer Credit Safety Commission, a single government agency charged with ensuring that the offering of financial credit to consumers is responsible, accountable, and transparent. This new agency would look out for consumers first, acting quickly to protect consumers from predatory practices and holding companies accountable when they abuse, deceive, or take advantage of the consumers they claim to be helping.

I will keep your views in mind as Congress considers legislation to make our financial system more transparent, safe, and accountable.

= = = = =
Please click on the link about the seeds of the mortgage crisis above.

With the campaign successfully completed, 16th district GOP Congressman Don Manzullo points to “free-market strategies” to restore America’s economic health. The congressman voted against the $700 billion bailout, which U.S. Treasury Secretary Henry Paulson can’t seem to figure out what to do with.
Manzullo’s press release follows:

Manzullo Proposes New Free-Market Strategies to Strengthen America’s Struggling Economy

[WASHINGTON] Congressman Don Manzullo (R-IL) today proposed several new strategies Congress can pursue to ease America’s credit crunch, strengthen our economy and create jobs without sticking taxpayers with the bill. Manzullo offered his suggestions during a Financial Services Committee hearing called to discuss the state of the U.S. economy.

Manzullo, who opposed the $700 billion taxpayer bailout of Wall Street in favor of several proven free-market alternatives, said one strategy — accelerating the domestic manufacturing tax deduction — would give our companies a cash infusion they could use to sustain and create new jobs in America.

The American Jobs Creation and Economic Stimulus Act of 2008 (HR 5101), which Manzullo authored with Rep. Dan Lipinski (D-IL) earlier this year, would speed up the domestic manufacturing tax deduction to give manufacturers a larger tax break on the goods they produce in the United States.

The tax deduction – which Manzullo helped create in 2004 – currently provides a 6 percent tax rate reduction for manufacturers on the goods and services they produce in the United States. The tax rate reduction is scheduled to increase to 9 percent by 2010, but the bill would accelerate the phase-in to 9 percent retroactively to Jan. 1, 2008.

“This legislation gives our manufacturers an extra 3 percent cut in their tax rate immediately that they can use to sustain and create jobs in America,” Manzullo said. “It also provides a greater incentive for our manufacturers to keep jobs in the United States and actually bring some jobs back from overseas because they would pay a 9 percent tax premium on any work they send offshore.”

Manzullo supports several other free-market strategies to strengthen our economy, including:

• Allowing companies to repatriate their overseas profits back to the United States tax free for one year if the money is used to pay off distressed debt or support business expansion or job creation.
• Suspending the capital gains and recapture taxes for two years to encourage Americans to invest in America and encourage corporations to sell unwanted assets and acquire the capital they need to sustain and create jobs.
• Allowing companies to carry back losses an additional two years, generating a tax refund and immediate capital.
• Directing the Securities and Exchange Commission to suspend the mark-to-market regulatory rules until the agency can issue new guidelines that will allow firms to mark these assets to their true economic value.
• Reducing the corporate tax rate from 35 to 15 percent.

= = = = =
Shown during a Rockford TV debate is Don Manzullo on the right and Democratic Party challenger Robert Abboud to his right. With only his left arm in the screen is Green Party candidate Scott Summers.

With the campaign successfully completed, 16th district GOP Congressman Don Manzullo points to “free-market strategies” to restore America’s economic health. The congressman voted against the $700 billion bailout, which U.S. Treasury Secretary Henry Paulson can’t seem to figure out what to do with.
Manzullo’s press release follows:

Manzullo Proposes New Free-Market Strategies to Strengthen America’s Struggling Economy

[WASHINGTON] Congressman Don Manzullo (R-IL) today proposed several new strategies Congress can pursue to ease America’s credit crunch, strengthen our economy and create jobs without sticking taxpayers with the bill. Manzullo offered his suggestions during a Financial Services Committee hearing called to discuss the state of the U.S. economy.

Manzullo, who opposed the $700 billion taxpayer bailout of Wall Street in favor of several proven free-market alternatives, said one strategy — accelerating the domestic manufacturing tax deduction — would give our companies a cash infusion they could use to sustain and create new jobs in America.

The American Jobs Creation and Economic Stimulus Act of 2008 (HR 5101), which Manzullo authored with Rep. Dan Lipinski (D-IL) earlier this year, would speed up the domestic manufacturing tax deduction to give manufacturers a larger tax break on the goods they produce in the United States.

The tax deduction – which Manzullo helped create in 2004 – currently provides a 6 percent tax rate reduction for manufacturers on the goods and services they produce in the United States. The tax rate reduction is scheduled to increase to 9 percent by 2010, but the bill would accelerate the phase-in to 9 percent retroactively to Jan. 1, 2008.

“This legislation gives our manufacturers an extra 3 percent cut in their tax rate immediately that they can use to sustain and create jobs in America,” Manzullo said. “It also provides a greater incentive for our manufacturers to keep jobs in the United States and actually bring some jobs back from overseas because they would pay a 9 percent tax premium on any work they send offshore.”

Manzullo supports several other free-market strategies to strengthen our economy, including:

• Allowing companies to repatriate their overseas profits back to the United States tax free for one year if the money is used to pay off distressed debt or support business expansion or job creation.
• Suspending the capital gains and recapture taxes for two years to encourage Americans to invest in America and encourage corporations to sell unwanted assets and acquire the capital they need to sustain and create jobs.
• Allowing companies to carry back losses an additional two years, generating a tax refund and immediate capital.
• Directing the Securities and Exchange Commission to suspend the mark-to-market regulatory rules until the agency can issue new guidelines that will allow firms to mark these assets to their true economic value.
• Reducing the corporate tax rate from 35 to 15 percent.

= = = = =
Shown during a Rockford TV debate is Don Manzullo on the right and Democratic Party challenger Robert Abboud to his right. With only his left arm in the screen is Green Party candidate Scott Summers.

Republican congressional challenger Steve Greenberg is continuing his string of press releases criticizing 8th District Congresswoman Melissa Bean.

Here is his latest press release:

Bean Provides No Excuses for Her Relationship with Fannie, Freddie
Continues to Duck Questions About Her Role in Economic Crisis

LAKE ZURICH, IL 10/29/08 – Melissa Bean continues to lie about her role in the economic crisis and about her relationship with Fannie Mae and Freddie Mac. Under fire from Congressional Candidate Steve Greenberg for her “Bean-Neugebauer” amendment, which undermined attempts at strengthening GSE regulation in 2007,¹ she has not offered a legitimate answer to the accusations.

First, Bean attempted to distort the facts through her spokesman, claiming that the amendment “strengthened oversight of Fannie Mae and Freddie Mac,”² despite a press release by Fannie Mae praising her for weakening the potential regulation,³ and the GSE Report pointing out the obvious benefits the amendment provided the mortgage giants.⁴

Realizing the facts did not back up her claims, Bean then attempted to change the subject. Her spokesman called the attacks “baseless” and said that Greenberg “should stop talking”, but refused to answer questions on the allegations.⁵

1. http://www.steveforus.com/newsDetail.aspx?newsID=5216, http://www.steveforus.com/newsDetail.aspx?newsID=5217

2. http://www.dailyherald.com/story/?id=245019&src=3

3. http://www.fanniemae.com/media/statements/2007/052207.jhtml?p=Media&s=Statements

4. http://www.gsereport.com/2007/April%2030-May%2014.pdf

5. http://www.dailyherald.com/story/?id=245765

Republican congressional challenger Steve Greenberg is continuing his string of press releases criticizing 8th District Congresswoman Melissa Bean.

Here is his latest press release:

Bean Provides No Excuses for Her Relationship with Fannie, Freddie
Continues to Duck Questions About Her Role in Economic Crisis

LAKE ZURICH, IL 10/29/08 – Melissa Bean continues to lie about her role in the economic crisis and about her relationship with Fannie Mae and Freddie Mac. Under fire from Congressional Candidate Steve Greenberg for her “Bean-Neugebauer” amendment, which undermined attempts at strengthening GSE regulation in 2007,¹ she has not offered a legitimate answer to the accusations.

First, Bean attempted to distort the facts through her spokesman, claiming that the amendment “strengthened oversight of Fannie Mae and Freddie Mac,”² despite a press release by Fannie Mae praising her for weakening the potential regulation,³ and the GSE Report pointing out the obvious benefits the amendment provided the mortgage giants.⁴

Realizing the facts did not back up her claims, Bean then attempted to change the subject. Her spokesman called the attacks “baseless” and said that Greenberg “should stop talking”, but refused to answer questions on the allegations.⁵

1. http://www.steveforus.com/newsDetail.aspx?newsID=5216, http://www.steveforus.com/newsDetail.aspx?newsID=5217

2. http://www.dailyherald.com/story/?id=245019&src=3

3. http://www.fanniemae.com/media/statements/2007/052207.jhtml?p=Media&s=Statements

4. http://www.gsereport.com/2007/April%2030-May%2014.pdf

5. http://www.dailyherald.com/story/?id=245765

With the election 8 days away, at least one candidate Democratic Party aspirant for the 16th congressional district seat that Republican Don Manzullo now holds seems to be ready to send out one press release a day.

Here is Monday’s:

WITH FINANCIAL SITUATION DETERORIATING, MANZULLO PROPOSAL WILL WORSEN ECONOMIC, FINANCIAL CRISIS
Abboud: We Can No Longer Afford this Type of Inexperienced, Ideologically Drive Representation

ROCKFORD – Democratic challenger and small business owner Bob Abboud called his opponents recent proposed financial legislation ‘the kind of knee jerk, ideological allegiance that created our current crisis.’ Abboud hammered his opponent after learning about the broad strokes of HR 7223, of which Don Manzullo is a co-sponsor.

“At a time when Americans are looking for common sense solutions to our most serious problems, all Don Manzullo can offer is the same, failed, ideological irresponsible policies that sent our economy in the tank and our financial system into chaos,” Abboud said. “We can no longer afford to suffer through my opponent’s inability to accurately asses and address real challenges. We’ve waited for 16 years and that is long enough.”

The bill would suspend the capital gains tax, a schedule for the sponsored government enterprises for privatization and suspend mark-to-market accounting requirements. Abboud said these three proposals are a sure recipe for disaster if the government intends on solving our financial crisis and ensuring that taxpayers get a return on the investment they made in the form of the $750 billion rescue.

“Eliminating the capital gains tax will only encourage major investors to get out of a volatile stock market,” Abboud said. “The whole idea of the cap gains tax, an idea created by Richard Nixon, was to encourage long term investment in the stock market. Removing this tax won’t help working families; it will only give an easy out clause to big dollar investors and create even more instability in the marketplace.”

Abboud continued to explain that removing the mark-to-market accounting requirements was the real tragedy of this legislation. These requirements ensure that assets, like homes, are assessed for their real value. In other words, what the asset is actually worth at the time of the assessment. Removing these requirements would allow financial institutions to artificially inflate the value of these assets, giving the bank the leeway to lend out more money than it is really holding. This is the very same problem that caused this financial collapse.

“This is the same kind of ridiculous accounting principles that sent Ken Lay to jail, bankrupt Enron and cost too many regular people their pensions and life savings,” Abboud said. “Essentially what Manzullo is proposing is that we make up the value of these assets in hope that the market catches up, allowing banks to loan out more money than they actually have. As usual, Manzullo’s do nothing policies only seek to push serious problems onto others because he lacks the ability to address this challenge head on.”

The final problem with the legislation as Abboud sees it is the creation of a timetable for the re-privatization of government acquired assets. Abboud says that creating an end date to release these assets back to the free market will only encourage the market to drive down the price and then purchase them at significantly reduced value.

“This will guarantee American taxpayers will not get their money back,” Abboud said. “It’s like telling the opposing team where and when you’re gonna pass the football and then being surprised when they intercept it. This is one more mistake in the long list of mistakes that brought this crisis upon us. The question is, do we want to continue going down the same road, or is it time to change course.”

With the election 8 days away, at least one candidate Democratic Party aspirant for the 16th congressional district seat that Republican Don Manzullo now holds seems to be ready to send out one press release a day.

Here is Monday’s:

WITH FINANCIAL SITUATION DETERORIATING, MANZULLO PROPOSAL WILL WORSEN ECONOMIC, FINANCIAL CRISIS
Abboud: We Can No Longer Afford this Type of Inexperienced, Ideologically Drive Representation

ROCKFORD – Democratic challenger and small business owner Bob Abboud called his opponents recent proposed financial legislation ‘the kind of knee jerk, ideological allegiance that created our current crisis.’ Abboud hammered his opponent after learning about the broad strokes of HR 7223, of which Don Manzullo is a co-sponsor.

“At a time when Americans are looking for common sense solutions to our most serious problems, all Don Manzullo can offer is the same, failed, ideological irresponsible policies that sent our economy in the tank and our financial system into chaos,” Abboud said. “We can no longer afford to suffer through my opponent’s inability to accurately asses and address real challenges. We’ve waited for 16 years and that is long enough.”

The bill would suspend the capital gains tax, a schedule for the sponsored government enterprises for privatization and suspend mark-to-market accounting requirements. Abboud said these three proposals are a sure recipe for disaster if the government intends on solving our financial crisis and ensuring that taxpayers get a return on the investment they made in the form of the $750 billion rescue.

“Eliminating the capital gains tax will only encourage major investors to get out of a volatile stock market,” Abboud said. “The whole idea of the cap gains tax, an idea created by Richard Nixon, was to encourage long term investment in the stock market. Removing this tax won’t help working families; it will only give an easy out clause to big dollar investors and create even more instability in the marketplace.”

Abboud continued to explain that removing the mark-to-market accounting requirements was the real tragedy of this legislation. These requirements ensure that assets, like homes, are assessed for their real value. In other words, what the asset is actually worth at the time of the assessment. Removing these requirements would allow financial institutions to artificially inflate the value of these assets, giving the bank the leeway to lend out more money than it is really holding. This is the very same problem that caused this financial collapse.

“This is the same kind of ridiculous accounting principles that sent Ken Lay to jail, bankrupt Enron and cost too many regular people their pensions and life savings,” Abboud said. “Essentially what Manzullo is proposing is that we make up the value of these assets in hope that the market catches up, allowing banks to loan out more money than they actually have. As usual, Manzullo’s do nothing policies only seek to push serious problems onto others because he lacks the ability to address this challenge head on.”

The final problem with the legislation as Abboud sees it is the creation of a timetable for the re-privatization of government acquired assets. Abboud says that creating an end date to release these assets back to the free market will only encourage the market to drive down the price and then purchase them at significantly reduced value.

“This will guarantee American taxpayers will not get their money back,” Abboud said. “It’s like telling the opposing team where and when you’re gonna pass the football and then being surprised when they intercept it. This is one more mistake in the long list of mistakes that brought this crisis upon us. The question is, do we want to continue going down the same road, or is it time to change course.”

Just two weeks until the election, and 16 District Congressman Don Manzullo is off to Washington to a hearing on how to prevent another financial meltdown.

Meanwhile Democratic Party opponent Robert Abboud is being given the opportunity to address all North Boone Middle School 7th and 8th graders at 1:30 on “public service, what brought them into politics and the importance and responsibility of voting,” according to one of his press releases. Then, it’s off to Galena for Abboud.

Manzullo’s press release follows:

Manzullo Returns to Washington for Tuesday Hearing to Discuss Proposals to Tighten Financial Regulations

[WASHINGTON] Congressman Don Manzullo (R-Egan), a member of the House Financial Services Committee, will return to our nation’s capital Tuesday to participate in a full committee hearing examining proposals to tighten regulations to stem the bleeding in our nation’s financial sector.

The hearing, entitled “The Future of Financial Services Regulation,” will begin at 10 a.m. Tuesday, Oct. 21, in Room 2128 of the Rayburn House Office Building in Washington, DC. The hearing will examine:

• Ways to measure and limit risk without stifling innovation while improving market liquidity and breadth.
• The implications of current governmental lending and support facilities for the regulatory structure.
• Proposals to improve the regulatory structure through a stronger system of regulation and oversight.
• The need for enhanced capital and reserve requirements for financial firms.

The adequacy of current powers and coverage of the existing regulatory structure.

Witnesses at the hearing will include
two former vice chairs of the Board of Governors at the Fed, as well as representatives of the American Bankers Association, the Securities Industry and Financial Markets Association, the Financial Services Roundtable, and the Independent Community Bankers of America.

Just two weeks until the election, and 16 District Congressman Don Manzullo is off to Washington to a hearing on how to prevent another financial meltdown.

Meanwhile Democratic Party opponent Robert Abboud is being given the opportunity to address all North Boone Middle School 7th and 8th graders at 1:30 on “public service, what brought them into politics and the importance and responsibility of voting,” according to one of his press releases. Then, it’s off to Galena for Abboud.

Manzullo’s press release follows:

Manzullo Returns to Washington for Tuesday Hearing to Discuss Proposals to Tighten Financial Regulations

[WASHINGTON] Congressman Don Manzullo (R-Egan), a member of the House Financial Services Committee, will return to our nation’s capital Tuesday to participate in a full committee hearing examining proposals to tighten regulations to stem the bleeding in our nation’s financial sector.

The hearing, entitled “The Future of Financial Services Regulation,” will begin at 10 a.m. Tuesday, Oct. 21, in Room 2128 of the Rayburn House Office Building in Washington, DC. The hearing will examine:

• Ways to measure and limit risk without stifling innovation while improving market liquidity and breadth.
• The implications of current governmental lending and support facilities for the regulatory structure.
• Proposals to improve the regulatory structure through a stronger system of regulation and oversight.
• The need for enhanced capital and reserve requirements for financial firms.

The adequacy of current powers and coverage of the existing regulatory structure.

Witnesses at the hearing will include
two former vice chairs of the Board of Governors at the Fed, as well as representatives of the American Bankers Association, the Securities Industry and Financial Markets Association, the Financial Services Roundtable, and the Independent Community Bankers of America.