Fallout: The Financial Crisis

DeFazio: TARP, stimulus still need work

Marketplace Staff Jan 15, 2009
Fallout: The Financial Crisis

DeFazio: TARP, stimulus still need work

Marketplace Staff Jan 15, 2009


KAI RYSSDAL: I set up John Dimsdale’s piece a couple of minutes ago by saying a lot of lawmakers aren’t too pleased with the way the TARP’s turned out. Oregon Democrat Peter DeFazio’s one of them. We talked to him back when the TARP was first being debated. He’s not technically a Blue Dog Democrat, but he is what you can rightly call a fiscal conservative. And we’ve got him on the line once again.

Congressman, good to have you with us.

PETER DeFazio: Uh, thanks. Appreciate the opportunity.

RYSSDAL: We talked to you three months ago, congressman, as the House was debating the original TARP bailout. Thought we’d give you a call again and see if 90 days worth of hindsight has changed your mind on that package and how you felt back then, which was none too good.

DeFazio: Uh, I was wrong. It was actually worse than I thought it could be.

RYSSDAL: Worse. Good. Lovely.

DeFazio: You know, what did we get for $350 billion? I mean, that’s the question my constituents are asking. And that’s now the question my colleagues — even those who supported it — are asking. And we’re talking about, right now, debating a bill to put very significant restrictions on the future expenditure of funds. If only they had put those conditions in at the time and not put in the sort of uber-loophole which gave Henry “Hank” Paulson the authority to do anything and everything he wanted to do with that money — and he sure did.

RYSSDAL: How are you going to vote this time when the second $350 billion comes up?

DeFazio: Well, first, today, I want to see these very strong restrictions put in place. But I’m still not inclined to vote for it. I wanted two amendments that aren’t being allowed. I would have split the money and said, “OK, here’s part of it. Let’s see what you do with it.” And then, secondly, I still want to impose a minuscule transfer tax, something we had in this country throughout the Great Depression, throughout World War II, up until the ’60s, on stock transfers. It wouldn’t hurt people in 401(k)’s. And legitimate traders it would be one-quarter of 1 percent, so Wall Street could pay to bailout itself.

RYSSDAL: Is it that you don’t think the bailout is needed or you don’t like the way it’s being gone about?

DeFazio: Well, I certainly don’t like the way the first $350 billion was expended. I’m still not confident that, even with these restrictions, we’ve got it right. And then, even beyond that, I know that this vote in the House is not going anywhere in the Senate. So there will not be legal restrictions on the Obama administration. And, at this point the senators are saying, “Well, we got a letter from Larry Summers and he told us how he’ll spend it. And, of course, we trust him.” Well, I don’t.

RYSSDAL: You’re not buying it that the Obama administration and Congress Frank, by the way — Barney Frank, the chairman of the House Financial Services Committee — has said they have an agreement on how this money’s going to be spent?

DeFazio: Well, I’m sure they have told Barney. you know, something. But again, I just don’t think Congress should be giving that much latitude to the executive branch with that much money.

RYSSDAL: Speaking of spending a lot of money, you’re also going to be voting in the next couple of weeks on a stimulus package. It came out today at $825 billion — likely to grow, I imagine. What’s your feeling on that one, sir?

DeFazio: I’m disappointed. You know, everybody’s talking about shovel-ready projects and, you know, there’s visions of sugar plums and bridges and transit systems and new water systems dancing in the heads of many mayors and governors across America. I think they’re going to be sorely disappointed when they see the small fraction of money in the bill that goes to those sorts of projects. Right now, what would be considered traditional infrastructure constitutes about 7.5 percent of the total $800 billion-plus expenditure.

RYSSDAL: Are you feeling any sense of urgency from the House leadership and the Obama administration on getting this stimulus package done?

DeFazio: Absolutely. And I think that’s a mistake. We shouldn’t be rushed. And there are some indications that there are enough of us concerned that we’re slowing things down a little bit here on the House side. And we’re going to push back.

RYSSDAL: No real doubt, though, that this thing’s going to pass in some form, huh?

DeFazio: Well, I think there’s enough of a doubt. You know, right now I don’t think you’re going to find many Republican votes. And if there are enough of us on the Democratic caucus concerned and saying, This is not the right ratios, then maybe we’ll see a different package.

ryssdal: Congressman Peter DeFazio, Democrat of Oregon, thanks for your time.

DeFazio: Thank you.

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