Washington – The Club for Growth urges all members of Congress to reject the latest “compromise” bailout bill.
Although conservatives in the House convinced Congress to strip many of the worst elements of the previous “compromise” bailout bill, the legislation remains fundamentally flawed. The bill increases the federal debt by billions of dollars, rewards bad decisions made by failing banks, and establishes a dangerous precedent for government bailouts down the road. This bill should be defeated, and it is clear from the precipitous drop in the Dow this morning that the markets are equally unimpressed with this legislation.[# More #]
Instead of passing this bill, Congress should do two things immediately to help our credit markets. First, Congress should immediately suspend mark-to-market rules for banks. Second, Congress should lift the cap on the FDIC’s guarantee on transaction accounts at banks. Last week, the government instituted an unlimited guarantee on money market funds, creating an incentive to withdraw deposits from banks. The last thing the government should be doing is encouraging a run on banks. The best way to fix this under current circumstances is to lift the FDIC’s cap.
“For years, Congress played a central role in creating and encouraging the current crisis,” said Club for Growth President Pat Toomey. “With this bill, Congress further undermines our free-market system. If Congress really wants to stabilize the markets and restore financial confidence, it should suspend mark-to-market rules and lift the cap on the FDIC’s guarantee on transaction accounts. No member of Congress should leave town without getting this done.”
The Club for Growth will be key-voting the vote on the bailout bill, urging all members to vote “No.” Key votes are included in our Congressional Scorecard for the 110th Congress. The scorecard provides a comprehensive rating of how well or how poorly each member of Congress supports pro-growth, free-market policies.