News Sept. 22

September 22, 2008

Senator Sanders

Sanders: Don't Make Middle Class Bankroll Bailout Sen. Bernie Sanders said he will oppose a Bush administration proposal to bail out troubled financial institutions if the middle class is asked to pay for it. Sanders on Sunday issued a statement saying middle class Americans shouldn't have to pay for a crisis created by "the Bush administration's deregulatory fever and Wall Street's insatiable greed," The Associated Press and Politico reported. "When the wealthiest people have made huge sums of money in the last eight years, they have got to contribute their fair share to the bailout. I don't want it being on the middle class, when they already have seen a decline in their standard of living," Sen. Sanders told WCAX News, WPTZ News, and Fox 44. LINK, LINK, LINK, VIDEO, VIDEO, VIDEO

Sanders' Plan "This proposal as presented is an unacceptable attempt to force middle income families (and our children) to pick up the cost of fixing the horrendous economic mess," wrote Sen. Bernie Sanders in Politico, Huffington Post, and OpEdNews. Sanders' plan "includes a five-year, 10% surtax on the income of individuals above $500,000 a year, and $1 million a year for couples; a requirement that the price the government pays for any mortgage assets are discounted appropriately so that government can recover the amount it paid for them; and, finally, the government should receive equity in the companies it bails out so that when the stock of these companies rises after the bailout, taxpayers also have the opportunity to share in the resulting windfall." LINK, LINK, and LINK

Comments "Senator Sanders, you are a national treasure. Clearly you have real significant insight into the current crisis… am in complete agreement with you across the board, Sen. Sanders. Now, how many votes can you muster without having to trade any of these proposals away?.. Reminds me when the rush to go war to Iraq... Do this immediately or congress will be sorry... At least we have one sane person in congress," posted some of the 275 commenters to Sanders' Huffington Post column. LINK

Sanders, Welch Push for Heating Aid With only a short time left before Congress adjourns before the November election, Sen. Bernie Sanders and Rep. Peter Welch said their priority is to try to pass legislation to bring $20 million more to Vermont to help struggling residents pay high heating costs this winter. Sanders now hopes to revive his Warm in Winter and Cool in Summer Act by attaching it to a must-pass piece of federal spending legislation in the final days of the legislative session, according to The Burlington Free Press and The Associated Press. LINK and LINK

Sanders on the Air Appearing as a guest this morning on the nationally syndicated radio program hosted by Bill Press, Sanders said "those who made obscene sums of money, those are the people who should bail out Wall Street." Sanders said the bailout is being pushed by the same people who opposed health care, education and other priorities. "The hypocrisy of these guys stinks to high heaven." LINK

Not a Soap Opera Sen. Bernie Sanders wrote "a plea that the national media, in the last two months of this campaign, move away from a total dependence on gossip, personality and political tactics, which have up to now been the dominant themes of their reporting" in a column published by the Bennington Banner. LINK

A Good Member "Perhaps it would be useful to discuss whether those who are worried about the Bailout have anyone in Congress who knows what we need. I found one such, and Bernie Sanders is a member of (OpEdNews)… Formerly a House member and now in the Senate, he has the kind of experience which means we should take him seriously," according to one blogger on OpEdNews.com. Another wrote, "Senator Bernie Sanders of Vermont has also offered a well-thought out plan that shifts alot of the bailout burden off the middle class taxpayer and onto the top 1% who have most benefited from the Bush's economic policies over the past eight years." LINK and LINK

International

Pakistani troops fire on intruding U.S. choppers - Pakistani troops fired on two U.S. helicopters that intruded into Pakistani airspace on Sunday night, forcing them to turn back to Afghanistan, a senior Pakistani security official said on Monday. It was the second such incident in a week, and reflects frayed relations with the United States over Pakistan's failure to act more forcibly against Islamist fighters in the tribal lands bordering Afghanistan. The number of missile attacks by U.S. drone aircraft in the remote tribal areas has multiplied in recent weeks. The helicopters violated the border in the area of Lowara Mandi, 40 km (25 miles) west of Miranshah, the main town in the North Waziristan tribal region, at around 9 p.m. on Sunday, the official said, speaking on condition of anonymity because of the sensitivity of the subject. There was no official confirmation, according to Reuters. LINK

Foreign Banks Hope Bailout Will Be Global - The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics. Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks. On Sunday, the Treasury secretary, Henry M. Paulson Jr., indicated in a series of appearances on morning talk shows that an original proposal introduced on Saturday had been widened. "It's a distinction without a difference whether it's a foreign or a U.S. one," he said in an interview with Fox News, reported The New York Times. LINK

Risks seen for U.S. as it freezes out Russia - Nearly six weeks after Russia sent troops into neighboring Georgia, the Bush administration remains deeply divided over whether to retaliate against it -- and some officials fear the internal conflict is already undermining strategically important national security collaborations. Some senior administration officials, including Vice President Dick Cheney and some hard-liners in the Pentagon, are advocating the continuation of what they confirm has been a White House-imposed communications blackout on most dealings with Russia and a halt to nearly all bilateral initiatives on security matters. They want to send Russia a message that the United States won't stand for its Aug. 7 incursion through two pro-Moscow breakaway republics and into Georgia, a staunch U.S. ally. They say the sortie was only the latest in a series of hostile actions that require a wholesale recalibration of U.S. security policy, from an inclusive one that treats Moscow as an ally on global security matters to a sharply curtailed approach that considers it an untrustworthy potential enemy, wrote the Los Angeles Times. LINK

National

Democrats Set Bailout Conditions as Treasury Chief Rallies Support - Congressional Democrats began to set their own terms on Sunday for a plan to rescue the nation's financial institutions, including greater legislative oversight of the Treasury Department, more direct assistance for homeowners and limits on the pay of top executives whose firms seek help. The Democrats' demands came as Treasury Secretary Henry M. Paulson Jr. blanketed the Sunday talk shows to promote the Bush administration's $700 billion bailout package, emphasizing that it was needed not just for Wall Street, but for all Americans. He urged Congress to move swiftly to approve a "clean" rescue plan without tacking on extra programs. Still, competing interests were already complicating the negotiations, as Democrats pushed for assistance for distressed homeowners and for oversight authority of the bailout program. Some lawmakers also said they did not want to be rushed into approving extraordinary new powers for the Treasury secretary and the government without full consideration of the consequences, reported The New York Times. LINK

As Hill Debates Bailout, Wall St. Shifts Continue - Congressional Democrats considering the Bush administration's emergency plan to shore up the U.S. financial system countered with their own demands yesterday, presenting draft legislation giving the government power to cut salaries of chief executives at firms that participate in the bailout and slash severance packages for their top management. Democratic leaders have broadly embraced the administration's proposal to spend up to $700 billion to take troubled assets off the books of faltering firms and are not questioning the need to give the Treasury Department expansive authority to halt the meltdown in world markets. But by attempting to limit executive pay, they risk alienating key Republicans who object to such restrictions and delaying passage of the rescue plan, which in turn may stir renewed fear in the markets, reported The Washington Post. LINK

Goldman, Morgan Scrap Wall Street Model, Become Banks in Bid to Ride Out Crisis - The Federal Reserve, in an attempt to prevent the crisis on Wall Street from infecting its two premier institutions, took the extraordinary measure on Sunday night of agreeing to convert investment banks Morgan Stanley and Goldman Sachs Group Inc. into traditional bank holding companies. With the move, Wall Street as it has long been known -- a coterie of independent brokerage firms that buy and sell securities, advise clients and are less regulated than old-fashioned banks -- will cease to exist. Wall Street's two most prestigious institutions will come under the close supervision of national bank regulators, subjecting them to new capital requirements, additional oversight, and far less profitability than they have historically enjoyed. Already, the biggest rivals of Goldman Sachs and Morgan Stanley -- Merrill Lynch & Co., Lehman Brothers and Bear Stearns Cos. -- have merged into larger banks or sought bankruptcy protection, reported The Wall Street Journal. LINK

Consumers Cut Health Spending, As Economic Downturn Takes Toll - As the credit crunch threatens to throw the economy into a deep slump, Americans are already cutting back on health care, a sector once thought to be invulnerable to recession. Spending on everything from doctors' appointments to preventive tests to prescription drugs is under pressure. The number of prescriptions filled in the U.S. fell 0.5% in the first quarter and a steeper 1.97% in the second, compared with the same periods in 2007 -- the first negative quarters in at least a decade, according to data from market researcher IMS Health. Despite an aging and growing U.S. population, the number of physician office visits also has been declining since the end of 2006. Between July 2007 and 2008, the most recent month for which data are available, visits fell 1.2%, according to IMS, reported The Wall Street Journal. LINK

Vermont

Main Street on Edge "Main Street watches with wariness. Vermonters are busy stockpiling firewood for the winter. Wall Street is a long ways away, but it never felt as close as it has in the past few days," editorialized the Rutland Herald. Meanwhile, the Valley News reported on how the crisis is viewed from the Upper Valley. LINK LINK

Burlington School Taxes The Burlington City Council will decide tonight whether to send tax-increase questions on the schools, the parks and city streets to voters in November. Mayor Bob Kiss wants the street pavement question on the ballot, but Chief Administrative Officer Jonathan Leopold said Friday the schools and parks questions need further study. The School District initially said it needed $226 million to upgrade and repair the district's schools. After hearing objections from Leopold and some councilors, the School Board cut the immediate request to $92.2 million, reported The Burlington Free Press. LINK

Hazing Persists at Norwich Last week allegations surfaced that an upper-class student at Norwich University had hit a freshman with a broom handle in what's being called a hazing incident. Criminal charges and a non-criminal hazing complaint have been filed by Northfield police. School charges could follow. "The sense of disappointment when the news broke was almost palpable on this campus," said a spokesman for the partly-military institution. Despite clear rules prohibiting hazing, Norwich still has one or two cases a year when an upper class student given authority over others crosses a line into hazing, reported The Associated Press. LINK

Air Taxis Rutland air travelers have another option from getting here to there — though it's not for everyone. Linear Air operates an air taxi service providing pre-arranged flights to and from airports around the Northeast and Canada. Linear Air began serving Rutland area business and leisure travelers four years ago. Linear charges by the hour with a typical day trip averaging between $3,000 and $5,000, wrote the Rutland Herald. LINK