Former Speaker Newt Gingrich -- who has been very critical of the Paulson plan -- just released this statement on the bailout (which essentially echoes his comments yesterday on This Week):
I have sadly come to two painful conclusions.
First, the crisis of the credit markets is real and could have horrendous consequences dislocating the world market, causing enormous economic pain, and discrediting free market capitalism for a generation.
Second, as long as Secretary Paulson is in charge, it is impossible to get a creative or significantly better solution. The House Republicans, reinforced by John McCain, have improved this bill significantly so it is less bad than the original Paulson proposal. However, they cannot improve it more because of Paulson’s intransigence, which is an even greater obstacle to a good bill than the liberal Democrats who run the House and Senate.
Therefore, while I am discouraged at the final collapse of the Bush Administration, and frustrated by the Democrats’ passion for the taxpayer’s money, I would reluctantly and sadly vote for the bailout were I still in office.[# More #]
I understand and sympathize with any member who votes no.
The bill is not the best proposal for solving the crisis. It is not even a good proposal for solving the crisis.
However it is the only proposal Secretary Paulson would support and his support was essential in this setting.
This bailout is a temporary emergency measure to stop a hemorrhaging of credit and the potential collapse of the American and world economy. However, it is not a cure nor is it a roadmap for the future. The American people need to know that we will fight for an economic growth program and an energy independence program that will put them and their country back on the path to prosperity. Anything less will be a betrayal of their future.
Congress should move beyond this bill by passing an economic growth bill and an energy bill. We need growth and we need to bring home at least $500 billion of the $700 billion a year we are sending overseas.
If we do not get an economic growth bill and an energy bill, the economy will continue to limp along and there will be a grave danger of yet another bailout next year.
The Congress should also begin a series of public hearings on how we got into this mess and what kind of insider-dealing has been at work.
Yesterday, New York Times reported that the head of Goldman Sachs was the only private sector person in a New York Federal Reserve meeting on AIG (in which Goldman Sachs had a $20 billion interest). If this report is true, this is further grounds for demanding Paulson’s resignation.
Having a former chairman of Goldman Sachs preside over disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of - if not the actual existence of - corruption.
The Bush Administration has now provided three case studies in arrogance, isolation, and destructiveness: Michael Brown during Hurricane Katrina, Ambassador Jerry Bremer in Baghdad, and Secretary Paulson at Treasury. It is a tragic and very expensive legacy. No conservative and no Republican should doubt how much it has hurt our cause and our party.
The Congress should demand that the Securities and Exchange Commission suspend the mark-to-market accounting rule pending reevaluation of its destructive role in the current downward spiral. There is a grave danger the bailout itself may trigger further asset devaluation and actually worsen the liquidity crisis.
If the SEC refuses to suspend mark-to-market accounting, Congress should pass a free standing bill requiring it to do so.
Finally, if the economy continues to weaken, the Congress should consider a bold and dramatic program to restart economic growth and rebuild market efforts.
In particular the Congress should repeal Sarbanes-Oxley, which failed to warn of every single bankruptcy, but provides a $3 million a year accounting and regulatory expense for every small company wishing to go public.
The Congress should consider a dramatic cut in the United States corporate income tax (the highest in the world when combined with state taxes) so we can compete with the lower tax rates across the world in attracting high-value, productive, and desirable jobs back to the United States.
The Congress should look at the Chinese and Singapore growth patterns and match them by zeroing out the capital gains tax to induce massive flows of private capital to rebuild the market and minimize the need for a taxpayer funded bailout.
This is the kind of pro-growth, pro-entrepreneur program that would accelerate America’s recovery and lead to the next economic period of real growth.
While all these steps should be taken, the immediate crisis must first be met. Sadly, under the circumstances, the current administration binds us to that fact that the only possibility of needed timely action is this bill. Therefore I reluctantly sadly support its passage.