OPINION:
It took a lot of work, but the Senate labored long and hard and produced a mortgage-bailout bill that in important ways is even worse than the measure defeated Monday in the House. Getting senators to vote to force their taxpaying constituents to purchase $700 billion worth of “toxic” assets that the private sector wouldn’t touch is not an easy thing to do. So, the Senate Democratic and Republican leadership came up with a plan to bribe taxpayers into forking over the $700 billion by giving $100 billion worth of pork, mandates and tax breaks to favored constituencies.
The result is an unworthy bill that passed Wednesday night by a vote of 74-25 and will now likely be voted on today in the House. On the bright side, it sends no money to the Housing Trust Fund, meaning that left-wing groups like ACORN will get no funds from the bailout. But otherwise it is a legislative mish-mash of pork that should probably never see the light of day and a few meritorious items that have no business being attached to the bailout bill.
It includes legislation protecting more than 20 million taxpayers from the alternative minimum tax this year, as well as business tax incentives, including the research-and-development credit (measures that could have been included in other bills, but were more useful as political clubs to cow senators into supporting the bailout.) And the bill includes a potential time bomb - in the form of a requirement that employers who provide health-care coverage for employees’ physical illnesses provide the same coverage for mental illness, including drug treatment (which could be so extensive that some employers opt not to offer health coverage at all). It includes an increase from $100,000 to $250,000 in the size of deposits guaranteed by the FDIC - thereby increasing taxpayer exposure.
Both Barack Obama and John McCain voted for the bailout Wednesday night. That’s not a big deal for Mr. Obama. He is a Democrat who supports earmarks — in this case, it just happens to be corporate welfare. (Call this the progressive’s version of “trickle-down economics.”) For Mr. Obama, earmarks are par for the course of being a liberal.
But voting for earmarks is a massive political problem for Mr. McCain, who has spent months traveling around the country boasting about his opposition to earmarks and pork-barrel spending and vowing to veto such spending. He also said he would shame into change those lawmakers who pass such legislation.
Judging from his performance on the bailout bill, he can start the process by looking in the mirror. The bill Mr. McCain voted for on Wednesday is laden with the very special-interest provisions that he rails against. It includes tax breaks for: rum producers in Puerto Rico and the Virgin Islands; producers of wooden arrows used for children’s toys; film and television producers; Indian tribes; railroads; “Domestic Production Activities” in Puerto Rico; and auto-racing tracks. So, yesterday, television viewers were treated to the bizarre spectacle of Mr. McCain denouncing the very bill he voted for the previous night. “It’s insanity, and it’s obscenity because it’s a waste of taxpayers’ dollars, and it goes on,” Mr. McCain said.
And he then went on to complain about how the problem has grown, how Americans need a president who will veto such bills and how different he is from President Bush when it comes to fighting such spending. Mr. McCain asserts that he had to back the bill to prevent the economy from collapsing - a questionable assertion in view of the fact that the bill he voted for contains none of the reforms, like cutting corporate and capital-gains taxes, that could actually help put American businesses and the economy on a sound footing. Mr. McCain cannot have it both ways.
Today, the House is expected to vote on the Senate bailout bill, and it will have the support of Democratic and Republican leaders - as did the bill defeated Monday in the House. But the Senate bill is a travesty.
The pork-barrel politics the Senate handed the House now give Republicans and fiscal conservatives another reason to vote “nay.”
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