During his opening statement at a hearing on Capitol Hill Tuesday, Republican Sen. Richard Shelby of Alabama expressed his displeasure with the government's massive financial bailout.
From Shelby's prepared remarks:
Unfortunately, the Treasury Department's latest proposal continues its ad hoc approach, but on a much grander scale. The plan contemplates the purchase of up to $700 billion in troubled mortgage-related assets from financial institutions. Treasury expects, but is not required, to purchase most assets through a type of reverse auction process. There are very few details in this legislation. In fact, Treasury officials admit that they will have to figure out the mechanics as they go along. Rather than establishing a comprehensive workable plan for resolving this crisis, I believe this legislation merely codifies Treasury's ad hoc approach...
My record is very clear on taxpayer funded bailouts. I have long opposed government bailouts for individuals and corporate America alike. As a Congressman, I voted against the loan guarantees for Chrysler in 1979. However, if the government is going to get into the bailout business, shouldn't we also be focusing our resources on average Americans, rather than sophisticated and well-compensated bankers? The Treasury's plan has little for those outside of the financial industry. It is aimed at rescuing the same financial institutions that created this crisis with their sloppy underwriting and reckless disregard for the risks they were creating, taking, or passing on to others. Wall Street bet that the government would rescue them if they got into trouble. It appears that bet may be the one that pays off.
Once again, what troubles me most is that we have been given no credible assurances that this plan will work. We could very well spend $700 billion and not resolve the crisis. Before I sign off on something of this magnitude, I want to know that we have exhausted all reasonable alternatives. I don't believe that can be done in a weekend. Unfortunately, the incredibly accelerated process for considering this bill means that Congress does not have time to determine if there are better alternatives to Treasury's plan. I am very concerned that the expressed need to pass something now may prevent us from devising a plan that actually works. Without question, our markets and financial institutions need serious attention. I do not believe, however, that we can solve this crisis by spending a massive amount of money on bad securities. It is time that the Administration and Congress do the hard work of devising, as quickly as possible, a comprehensive and workable plan for resolving this crisis, before we waste $700 billion of taxpayer money.