Three Things President Bush Could Do Now

Amanda Carpenter | October 01, 2008 8:13 AM

ATR's Grover Norquist is proposing three steps President Bush could unilaterally enact now to alleviate economic concerns. He wrote an open letter to the president yesterday suggesting that he immediately use the power of the Executive Branch to:

1. Repeal the Clinton-era regulations encouraging reckless lending practices under the Community Reinvestment Act (CRA). In the 1990s, the Clinton Administration used the CRA as a club to pressure lenders into giving loans to marginally-qualified borrowers. The government should not be in the business of pushing lenders into making loans they would not make in a free market

2. Direct the SEC to make mark-to-market accounting voluntary for distressed assets. The mark-to-market accounting regime forces companies to value assets at less than their intrinsic value, merely to reflect current market uncertainty. In order to contain the bailout and protect taxpayer dollars, companies should be able to use book accounting for assets deemed by the Treasury as “distressed”

3. Direct the Treasury Secretary to determine that capial basis can be adjusted for inflation by taxpayers. There is a body of legal thought which holds that the Treasury Department can do this by executive action. In order to free up needed capital and unlock frozen assets more easily, the Treasury should make this common sense change to tax rules. If there is a legal brief which details Treasury’s objections to capital basis indexation, it should be released for public dissemination.