Before deal was announced, Shaheen, Sununu, Horn, Bradley opposed bailout
Wednesday September 17, 2008
By: John DiStaso
From: Union Leader
Wednesday September 17, 2008
By: John DiStaso
From: Union Leader
Four of the six New Hampshire politicians running for U.S. Senate and House seats agreed yesterday that taxpayers should not bear the brunt of fixing the latest crisis on Wall Street.
Addressing what may become the top issue in the November election, Republicans John Sununu, Jeb Bradley and Jennifer Horn and Democrat Jeanne Shaheen opposed taxpayer-funded government bailouts.
But Democratic Rep. Paul Hodes said through a spokesman that with the economy and financial markets in turmoil, he "cannot take any option off the table," while fellow Rep. Carol Shea-Porter said she is open to the possibility of government assistance for the embattled massive insurer, American International Group Inc.
Republican Sen. Judd Gregg, who is not facing reelection this year, called it unrealistic to rule out a possible taxpayer bailout.
"We have to have the flexibility if the government needs to step in, to do so, as we did with Freddie Mac and Fannie Mae" during the summer, Gregg said. "Hopefully, we won't, and, obviously, our first choice should be not to. But you cannot take that off the table because if you do, you disarm our ability to stabilize the markets."
(Editor's note: For Gregg's comments after the $85 billion AIG deal was announced, click here.)
All agreed that Congress and federal regulators should tighten oversight of real estate lending in the future to promote "transparency" and ensure that the terms and conditions of mortgages are spelled out clearly.
But a spokesman for Shaheen said Sununu has been in Congress for the past 12 years as deregulation spurred reckless lending.
Shea-Porter said the crisis was caused by "a financial 'wild West' through the Bush administration when (Republicans) didn't want any kind of regulation at all. This was greed, absolute greed ... and who's going to get stuck again? The middle-class taxpayer."
Gregg called the continuing crisis "the most significant disruption of our financial markets probably in history."
Sununu told reporters, "Neither Congress nor the Treasury should put taxpayers on the hook for bad decisions made by companies' executives and shareholders. Taxpayers should not be exposed to the bad decisions made by the executives, board members or shareholders of these companies."
Shaheen, his challenger, called for "more transparency, oversight and accountability," as well as reform on Wall Street and in Washington, and she agreed, "We cannot afford to continue using taxpayers' money to bail out mismanaged Wall Street investment banks."
Bradley, a former U.S. House member who is challenging Democrat Shea-Porter, said, "Taxpayers should not be in the business of bailing out companies." Republican Horn, who is challenging Hodes, said, "We do not need more government buyouts, bailouts or economic stimulus packages."
But Gregg said, "The government's role is to act when necessary to stabilize the market when there is a threat to the underlying financial system."
He said congressional action in July that tightened oversight of government-sponsored mortgage entities Fannie Mae and Freddie Mac "was a case of Congress doing what it was supposed to do for the first time in a while, acting aggressively by giving Treasury the authority it needed to stabilize" those companies.
Gregg also did not rule out the possibility that if the situation worsens, Congress could consider reestablishing the federal Resolution Trust Corp., which was set up in the recession of the late 1980s and early 1990s, when Gregg was governor and seven state banks failed as a real estate bubble burst.
Sununu said he saw no need for such a step.
Bradley said Fannie Mae and Freddie Mac should be broken into pieces "to shrink the role they play in the mortgage business of the country, so that this problem doesn't repeat itself. Loans should be made on the basis of real risk as opposed to speculative situations."
Shea-Porter said that until now, Republicans had "talked constantly about how the government should not be involved, about the free market. Can you imagine if they had their way with Social Security privatization? If people had put their money onto Wall Street, what would our elderly be facing right now?"
She said the Democratic-led Congress has passed subprime lending reform, pushed the Federal Reserve to issue regulations and passed refinancing options to allow homeowners to make smaller mortgage payments and stay in their homes.
Horn blamed "Republicans and Democrats alike" for the crisis and also called for government oversight of investment banks like the bankrupt Lehman Brothers. She said the first step toward a stronger economy would a better national energy policy and called for an immediate start to domestic drilling for oil and gas.
Hodes said in a statement that before he rushes into backing more regulation, "We need to monitor the depth of the financial crisis."
Hodes spokesman Mark Bergman said the freshman Democrat has "taken an active role in helping with the mortgage crisis" by meeting with subprime borrowers, helping expand mortgage refinancing options and voting for government intervention in the Freddie Mac and Fannie Mae meltdowns. Hodes successfully pressed to block $31 million in severance pay to the failing firms' chief executives, he said.
Sununu said the government should "continue to implement strong oversight of our regulatory markets at a number of different levels." He praised the Fannie Mae/Freddie Mac legislation passed during the summer, but said that five years ago he led an effort -- blocked by Democrats -- to tighten oversight of those entities.
He said he is "determined to ensure that taxpayers are not put in the position they were put in over the past year, that we ensure there is no direct taxpayer guarantee or subsidy for Fannie and Freddie and no implied taxpayer subsidy or guarantee for these companies."
Shaheen spokesman Kate Bedingfield said Sununu has been in Congress for 12 years supporting "the root cause of this crisis on Wall Street, the deterioration of regulation and mortgage markets." She said he served for five years on the Senate Banking Committee "while this crisis was developing, and he did nothing to prevent it."
Bedingfield said Sununu voted "to protect predatory lenders, including those who violate the Truth in Lending Act. He sat back while the Bush administration has gutted oversight of Wall Street."
Bedingfield said Shaheen believes "there is a desperate need, and has been for a long time, for more transparency oversight and accountability on Wall Street."
Sununu accused Shaheen of calling for "more flexibility" for Fannie Mae and Freddie Mac, saying she "has shown a lack of understanding" of the issue.
But Bedingfield pointed out that the Shaheen op-ed essay cited by Sununu called for Fannie Mae and Freddie Mac "to use flexibility" and did not say they should have more flexibility.
Bedingfield noted that Shaheen seven months ago wrote that any expansion of Fannie Mae and Freddie Mac's portfolio caps "must be tied to tighter regulation and independent oversight."
Sununu also called for keeping taxes low to encourage small-business investment and charged that Shaheen raised taxes when she served three terms as governor. But Bedingfield said the state had "the lowest tax burden in the nation" during Shaheen's tenure and she is "committed to fighting for tax cuts for the middle class and small businesses."
While John McCain has said the fundamentals of the economy remain strong, Sununu differed.
"It is very difficult to make a statement about the fundamentals given the significant changes we've seen in the past couple of days," he said, adding however, "The Federal Reserve and other central banks have taken the appropriate steps on liquidity. I think we have an interest rate environment that's going to be important and helpful in the recovery of the real estate market and I do think if we don't allow the tax rates to go back up, we have tax rates in place that will, over time, encourage investment activity and longer-term economic growth."
Addressing what may become the top issue in the November election, Republicans John Sununu, Jeb Bradley and Jennifer Horn and Democrat Jeanne Shaheen opposed taxpayer-funded government bailouts.
But Democratic Rep. Paul Hodes said through a spokesman that with the economy and financial markets in turmoil, he "cannot take any option off the table," while fellow Rep. Carol Shea-Porter said she is open to the possibility of government assistance for the embattled massive insurer, American International Group Inc.
Republican Sen. Judd Gregg, who is not facing reelection this year, called it unrealistic to rule out a possible taxpayer bailout.
"We have to have the flexibility if the government needs to step in, to do so, as we did with Freddie Mac and Fannie Mae" during the summer, Gregg said. "Hopefully, we won't, and, obviously, our first choice should be not to. But you cannot take that off the table because if you do, you disarm our ability to stabilize the markets."
(Editor's note: For Gregg's comments after the $85 billion AIG deal was announced, click here.)
All agreed that Congress and federal regulators should tighten oversight of real estate lending in the future to promote "transparency" and ensure that the terms and conditions of mortgages are spelled out clearly.
But a spokesman for Shaheen said Sununu has been in Congress for the past 12 years as deregulation spurred reckless lending.
Shea-Porter said the crisis was caused by "a financial 'wild West' through the Bush administration when (Republicans) didn't want any kind of regulation at all. This was greed, absolute greed ... and who's going to get stuck again? The middle-class taxpayer."
Gregg called the continuing crisis "the most significant disruption of our financial markets probably in history."
Sununu told reporters, "Neither Congress nor the Treasury should put taxpayers on the hook for bad decisions made by companies' executives and shareholders. Taxpayers should not be exposed to the bad decisions made by the executives, board members or shareholders of these companies."
Shaheen, his challenger, called for "more transparency, oversight and accountability," as well as reform on Wall Street and in Washington, and she agreed, "We cannot afford to continue using taxpayers' money to bail out mismanaged Wall Street investment banks."
Bradley, a former U.S. House member who is challenging Democrat Shea-Porter, said, "Taxpayers should not be in the business of bailing out companies." Republican Horn, who is challenging Hodes, said, "We do not need more government buyouts, bailouts or economic stimulus packages."
But Gregg said, "The government's role is to act when necessary to stabilize the market when there is a threat to the underlying financial system."
He said congressional action in July that tightened oversight of government-sponsored mortgage entities Fannie Mae and Freddie Mac "was a case of Congress doing what it was supposed to do for the first time in a while, acting aggressively by giving Treasury the authority it needed to stabilize" those companies.
Gregg also did not rule out the possibility that if the situation worsens, Congress could consider reestablishing the federal Resolution Trust Corp., which was set up in the recession of the late 1980s and early 1990s, when Gregg was governor and seven state banks failed as a real estate bubble burst.
Sununu said he saw no need for such a step.
Bradley said Fannie Mae and Freddie Mac should be broken into pieces "to shrink the role they play in the mortgage business of the country, so that this problem doesn't repeat itself. Loans should be made on the basis of real risk as opposed to speculative situations."
Shea-Porter said that until now, Republicans had "talked constantly about how the government should not be involved, about the free market. Can you imagine if they had their way with Social Security privatization? If people had put their money onto Wall Street, what would our elderly be facing right now?"
She said the Democratic-led Congress has passed subprime lending reform, pushed the Federal Reserve to issue regulations and passed refinancing options to allow homeowners to make smaller mortgage payments and stay in their homes.
Horn blamed "Republicans and Democrats alike" for the crisis and also called for government oversight of investment banks like the bankrupt Lehman Brothers. She said the first step toward a stronger economy would a better national energy policy and called for an immediate start to domestic drilling for oil and gas.
Hodes said in a statement that before he rushes into backing more regulation, "We need to monitor the depth of the financial crisis."
Hodes spokesman Mark Bergman said the freshman Democrat has "taken an active role in helping with the mortgage crisis" by meeting with subprime borrowers, helping expand mortgage refinancing options and voting for government intervention in the Freddie Mac and Fannie Mae meltdowns. Hodes successfully pressed to block $31 million in severance pay to the failing firms' chief executives, he said.
Sununu said the government should "continue to implement strong oversight of our regulatory markets at a number of different levels." He praised the Fannie Mae/Freddie Mac legislation passed during the summer, but said that five years ago he led an effort -- blocked by Democrats -- to tighten oversight of those entities.
He said he is "determined to ensure that taxpayers are not put in the position they were put in over the past year, that we ensure there is no direct taxpayer guarantee or subsidy for Fannie and Freddie and no implied taxpayer subsidy or guarantee for these companies."
Shaheen spokesman Kate Bedingfield said Sununu has been in Congress for 12 years supporting "the root cause of this crisis on Wall Street, the deterioration of regulation and mortgage markets." She said he served for five years on the Senate Banking Committee "while this crisis was developing, and he did nothing to prevent it."
Bedingfield said Sununu voted "to protect predatory lenders, including those who violate the Truth in Lending Act. He sat back while the Bush administration has gutted oversight of Wall Street."
Bedingfield said Shaheen believes "there is a desperate need, and has been for a long time, for more transparency oversight and accountability on Wall Street."
Sununu accused Shaheen of calling for "more flexibility" for Fannie Mae and Freddie Mac, saying she "has shown a lack of understanding" of the issue.
But Bedingfield pointed out that the Shaheen op-ed essay cited by Sununu called for Fannie Mae and Freddie Mac "to use flexibility" and did not say they should have more flexibility.
Bedingfield noted that Shaheen seven months ago wrote that any expansion of Fannie Mae and Freddie Mac's portfolio caps "must be tied to tighter regulation and independent oversight."
Sununu also called for keeping taxes low to encourage small-business investment and charged that Shaheen raised taxes when she served three terms as governor. But Bedingfield said the state had "the lowest tax burden in the nation" during Shaheen's tenure and she is "committed to fighting for tax cuts for the middle class and small businesses."
While John McCain has said the fundamentals of the economy remain strong, Sununu differed.
"It is very difficult to make a statement about the fundamentals given the significant changes we've seen in the past couple of days," he said, adding however, "The Federal Reserve and other central banks have taken the appropriate steps on liquidity. I think we have an interest rate environment that's going to be important and helpful in the recovery of the real estate market and I do think if we don't allow the tax rates to go back up, we have tax rates in place that will, over time, encourage investment activity and longer-term economic growth."
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