Hill Hearing Fails to Answer Who Pays for Bailout

Thousands Sign Sanders Letter to Paulson Demanding a Surtax on the Super-Rich Huge Bonuses to Wall Street Tycoons Detailed

WASHINGTON, September 23 - Senator Bernie Sanders (I-Vt.) said today that a Senate hearing on the Bush administration's $700 billion Wall Street bailout plan failed to address how to pay for the biggest government rescue package since the Great Depression.

"We are looking at a bailout of unbelievable proportions," Sanders said. "The committee hearing was interesting, but missed the most important point. The very first point that should be established is that it should not be the middle class bailing out the wealthy, who have benefited so handsomely from President Bush's reckless economic policies."

"If the economy is on the edge of collapse we need to act," the senator added, "but rescuing the economy does not mean we have to just give away $700 billion of taxpayer money to the banks."

To pay for any bailout, Sanders proposed a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would yield more than $300 billion in revenue to cover losses the government will incur when it resells troubled mortgages it acquires from banks.

He also called for a major economic recovery package to put Americans to work at decent wages, a return to stronger regulation of businesses, and the breakup of giant corporations like those that got the country and Wall Street into the crisis. "If a company is too big to fail, it is too big to exist," Sanders said.

Sanders laid out his proposal in a letter to Treasury Secretary Henry Paulson. The letter, posted on the senator's Web site, drew more than 8,000 citizen co-signers in less than 24 hours after it was posted.

"While the administration has quickly rallied to help Wall Street, it has ignored the needs of the declining middle class. Since President Bush has been in office the wealthiest people in this country have made out like bandits and have not had it so good since the 1920s. The top one-tenth of 1 percent now earn more income than the bottom 50 percent of Americans and the top 1 percent own more wealth than the bottom 90 percent," the letter to Paulson says.

Among the wealthiest Americans are the tycoons that ran many of the same Wall Street financial institutions now lining up for bailouts.

Paulson himself received a $38 million bonus in 2005, when he was chief executive of Goldman Sachs. It was the largest bonus ever given to a Wall Street CEO. In December of 2006, John Mack of Morgan Stanley broke Paulson's record with a $40 million bonus. Not to be outdone, Lloyd Blankfein, the new CEO of Goldman Sachs received a $53 million bonus later that month. In 2007, Blankfein shattered his own record by receiving a $68 million bonus.

In October of 2007, E. Stanley O'Neal, the former chief executive of Merrill Lynch, collected a severance package worth an estimated $161 million. Due to its risky investments, Merrill Lynch was recently sold to Bank of America.

Angelo Mozilo, the former CEO of Countrywide, received a severance package of about $110 million. That's on top of $140 million in Countrywide stock that he sold off during 2006-07. Mozilo was also paid $48 million in 2006. Due to its risky investments, Countrywide was sold to Bank of America.

In 2007, Wall Street's five biggest firms - Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley - paid a record $39 billion in bonuses to themselves.

Wall Street's investment bank bonuses are larger than the gross domestic products of Sri Lanka, Lebanon or Bulgaria, and the average bonus of $219,198 is more than four times higher than the median U.S. household income in 2006.