The 2008 Bailout Bill-Wool Wearers, Racing Fans and Forest Eco-Systems Can Finally Rest Easy

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Photo courtesy of terren in Virginia

My fellow Americans, your government has been hard at work over the last couple weeks drafting a 451-page bill filled enough provisions to make your head spin. Billed as a bailout for the country’s financial system, the “emergency economic stabilization” plan contains quite a few important provisions. To save you the trouble of sifting through all 451 pages, I’ve highlighted below some of the more important legislative accomplishments.

  • Sec. 325. Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds. I think this means reduced tariffs on wool and wool products will continue through 12/31/2014. Good to know those who can’t afford their home heating bills this winter can bundle up with cheaper wool sweaters.
  • Sec. 317. Seven-year cost recovery period for motorsports racing track facility. This one should be popular with all those NASCAR fans with their C.P.A certification. Hard to tell much from the actual language in the bill, but it sounds like the government is extending the time some “motorsports racing facility” has to recover building costs. Whew, glad they got that one hammered out–our economy was surely doomed without it.
  • Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children. According to the text, this provision allows for an “exemption for certain wood shafts” from excise tax. The shafts are manufactured for use by children, but cannot be less than 5/16 of inch in diameter and must not be “suitable for use with a bow.” I guess that eliminates the shaft taxpayers received in the passage of this bloated bill.
  • Sec. 601. Secure rural schools and community self-determination program. This section takes care of the “Reauthorization of the Secure Rural Schools and Community Self-Determination Act of 2000. Unfortunately, I have no idea what that means, but considering this section alone accounts for 49 pages of the overall bill’s text I can only assume it is something important. Forgive me, but I got lost when I hit the subsection that called for job creation in areas whose objectives would be to “control noxious and exotic weeds” while providing “improvements in forest eco-system health.” You can see how a regular guy like me could get lost in the “noxious weeds” of these 49 pages.

If you would like to read more about these critical pieces of legislation, you may view the full text here (pdf format). I’m sure you will be as comforted as I am to know that finally all the rural, wool-sweater wearing kids toting wooden arrows with no bows to the motorsports track are finally taken care of. Whew–What a relief!

Comments

  1. I don’t understand why all this is in the bailout plan? What does racing have to do with it? And wooden arrows? That’s ridicules! They just need to concentrate on the banking/insurance issues and not try to get other things passed for their own political gains. UGH these politicians really annoy me sometimes.

  2. I am very glad to here that those things are being taken care of, I was beginning to worry!

    Seriously, this is why many Americans are really beginning to dislike ALL politicians (even more than before). Really makes you wonder why you even bother to vote. What does any of this have to do with the so called bailout- which may or may not even be necessary and was bloated to begin with?

  3. Hey, just because we are facing the worst economic crisis since the Great Depression, thats no reason why congress can’t throw in a few goodies for their friends and donors.

  4. The worst part: this bill is going to pass.

    What I find interesting is no one has compared the price of this bill compared to the war so far. This bill makes the war look like a picnic in the park. People really need to know how many zeros are in a billion.

  5. 2 items to discuss:

    1) Three words: LINE ITEM VETO!
    Get the biggest and blackest permanent marker you can and vote on each and every single item on the bill. (I don’t think you can call it a bill anymore — more like a malignant tumor made of paper.) Cross out the ones that don’t make it and continue to the next item. No deliberation. No lobbying. Once the bill is submitted for voting, vote on everything in there and you don’t get to go home until that is done.

    2) I need someone to help me understand how the bailout is going to work. $700b is going to be given to these companies that are bankrupt. Does this mean that the houses and negative equity items get paid for with this money? Or does it just allow the company to get a fist full of capital to continue operating and borrowing into the future? If the houses are being paid for, who owns them? The government? The company? Do we own any part of them? And then what happens to those people who walked out of said homes? Do they get them back? After thinking on my own and trying to figure out how this would all work, I find that it is making less and less sense the more I think about it. It’s not a loan, so I am left wondering — where does the money end up?

  6. @DavidK: Line item vetos should definitely be an option with any bill, but we know it will never become an option because then politicians couldn’t sneak in these pork-laden provisions as part of a larger bill.

    As for your second item–I’m as confused about the details as you are! And I won’t hold my breath for any detailed explanation to the American taxpayer, who is being asked to foot this ridiculous bill.

  7. I agree that much of what is in there is ridiculous. I also think that it’s irresponsible to cram this bill through at this point. This crisis has been brewing for a very long time, and shoving legislation through that is so diluted and muddy is likely to do more harm than good.

    As far as the $700 billion (which is now over $800 billion), it is not being paid all at once. It will funnel through these companies over several years and into investors portfolios, etc. to keep the liquidity going, so business as usual beyond the investment firms can continue. Since we are essentially a credit-based economy, without the ability for the banks to lend money businesses cannot function — no car loans, mortgages, business loans, etc. In fact, it’s not unusual for cash flow related borrowing to come into play when businesses meet payroll obligations.

    This, I believe, the crux of what the bill addresses.

    If things came to a grinding halt, it would problematic regardless of your view of credit, and it goes far beyond the problem of “living beyond your means.”

  8. @Toontz,

    Agreed. This time around the dog-and-pony show is just disgusting. It also seems like there are more dogs than ponies.

    It is almost becoming a mantra every 4 years from everyone — “I’m voting for so-and-so…at least he’s not as bad as the other guy.” When did we start having to decide between the lesser of to evils?

    As an additional thought; if you believe that a lifetime politician will somehow magically bring about change in a politics-driven system, I’ve got a large bridge to sell you for a cheap price.

  9. Sadly, we get what we deserve. As George Carlin noted with respect to politicians: “Where are all the bright people of conscience?”

    We have ‘em, but we don’t understand enough about the value of individual liberty and free markets to put them in office and remove others from their seats of power.

    We’re also apathetic because we’ve been repeatedly alienated when it comes to politics. Our voices aren’t heard, but our taxes are gladly collected.

    There isn’t one person in Washington that has read the entire bail out bill, and that’s the case with almost every piece of legislation passed every year. Folks in congress readily admit it.

    It’s sad, true, and depressing, but it’s what we deserve when we keep putting the same “government-minded” individuals in office. Remember, once they get into Washington, their interests shift from us to them (if they ever had any interest in us to begin with).

    In the song, How to be Dumb, Elvis Costello had it right when he sang: “There’s a bright future for all you professional liars.”

    Clair

  10. I don’t understand why sec.601 was included in this unless they just wanted to save themselves an extra vote. The Reauthorization of the Secure Rural Schools and Community Self-Determination Act of 2000 had already all but passed – it was just waiting for the 2nd voting to happen. Without the renewal of this lifeline for rural schools, things get very very hairy out here in rural America. Basically, it’s a way for the forests to be taken care of so the forest can take care of us thru the timber sales. Our county has 3 rural school districts – without this renewal, all would be up that proverbial creek. The proceeds of the timber sales provide a huge percentage of the funding for our rural schools, and have for the past century… it’s logging country out here.

    I still don’t understand why this was thrown into the mix tho, as it was already slated to pass as a stand alone issue.

  11. Ok – I over simplified the explaination above… but it ties into the monies rural areas get for federal timber monies, which is how our school districts are primarily funded.

    $3.3 billion in federal aid for the “secure rural schools” program, “which compensates counties for the loss of revenues they had been receiving from the sale of timber on federal lands.”

    This had already passed by an almost unanimous vote of the Senate on 9/23. So, I still don’t understand why it was part of the bailout bill, unless it was to sweeten the pie for a holdout from a rural area. It is a REALLY big thing in these areas.

  12. The earmarks are needed to get votes for the initial bill, in this case the bail-out. This is what all the phone calls are about from one Senator to another. If we give you this [earmark], will you give us your vote? Then Senator Idaho is able to give his local voters a perk “free money from DC” and then he gets their vote on election day. It is a vicious circle where there are no ethics. The government should never have been in the “mortgage business” with Fannie or Freddie and this fiasco is a good reason why. When have you ever know our government to ever do anything ethical or rational with your money? And if you think that electing Obama for President is going to solve this you deserve exactly what they are doing to you.

  13. My husband and I registered today. The first time in a long time that I feel the need to vote.

    From the way I understand SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT 19 FOR HURRICANE KATRINA EMPLOYEES, they are extending the amount of years that you can claim the tax credit. Several of these sections looked like they were re-writing tax laws.

    My concern is this. Is there a provision in this thing that is going to say NO to the top execs of these failing corporations getting the millions of millions of dollars in bonus pay and severance pay? And is there something in here that is going to protect all stockholders if the company fails?

    It’s just not right for a top exec to get a severance bonus of over $19mil when the company fails and those who have invested their hard earned money in the failed company get nothing… nada…It’s just not right!

  14. Wow, the pork bailout bill passed, and the stock market ended LOWER?

    Yeah, that was really “necessary” and we’re really seeing “improvements”. What a crock.

    Is “None Of The Above” an option on the presidential ballot, or do we have to write it in?

  15. Oh lordy! We were listening to talk radio in the car and the two guys were making constant wisecracks about the wool research section of the bill. And nobody in Washington is scratching their heads about how these weird things end up in the bills?!!?

    Homemaker Barbi (Danelle Ice)

  16. Previous comment:
    As for your second item–I’m as confused about the details as you are! And I won’t hold my breath for any detailed explanation to the American taxpayer, who is being asked to foot this ridiculous bill.

    The entire bill can be read online if you have the time or patience to read through legal mumbo jumbo.
    I don’t remember anyone asking me what I thought-well, those who had a vote in the matter anyway. Did anyone ask you? 171 congressmen listened to US and voted NO. I made phone calls to my Congressman and expressed my opinion. All the rest – who knows what the motive is? When this all collapses they are going down too. I am a Republican but I am VERY disappointed with President Bush and ALL the congress on both sides of the aisle. This mess started when sound financial rules were changed. IF YOU DON’T HAVE ENOUGH MONEY TO MAKE PAYMENTS ON A MORTGAGE LOAN, WE CAN’T LOAN YOU THE MONEY. But President Clinton and the Congress of that time lowered the standards and now thousands of people can’t afford the mortgage payments. It is simple accounting. Let’s go back to the basics instead of this fuzzy math that is being used. Owning a house is NOT A RIGHT, it is a PRIVILEDGE. My husband was laid off recently. Where do I sign up for my share of this money to make my mortgage payment and buy food for my children? We will deal it personally and friends and family will help us if and when needed. Many of the “taxpayers” they are referring to DON’T EVEN PAY TAXES. We are not walking to socialism/communism… we are running there as fast as we can. Look behind you because this snowball may roll right over you.
    Now California Govenor is saying California will be broke shortly and wants a “loan”. Where does this all stop?
    American citizens need to take back our country from our government before it’s too late.

  17. Thank you Frugal Dad.
    *Professor Cochrane of the University of Chicago sent a petition to The Hill signed by 200 economists stating that this bill was a mistake. They detailed their suggestions for an alternate course of action.
    *Professor Cochrane, on the News Hour with Jim Lehr, called the add-ons “a pinata of ridiculousness.”
    *As Voltaire said, “the comfort of the Rich depends upon an abundant supply of the Poor.”
    *When will our Congressmen realize that anything that President Bush wants so quickly, so badly can’t possibly be any good?
    *I was so excited (for once) that House Members actually LISTENED to their constituents and voted NO the first time. Of course my guy, House Congressman Rahm Emanual, helped write this mess, so he had to vote for it. I still called his office, e-mailed my Senators, and even e-mailed the Speaker of the House.
    *Back to being a jaded Gen-Xer for me.
    Cordially,
    Francine

  18. Previous comment: By Teri

    “This mess started when sound financial rules were changed. IF YOU DON’T HAVE ENOUGH MONEY TO MAKE PAYMENTS ON A MORTGAGE LOAN, WE CAN’T LOAN YOU THE MONEY. But President Clinton and the Congress of that time lowered the standards and now thousands of people can’t afford the mortgage payments.”

    So true but you can trace a large part of this cause further back to a young Harvard law graduate community organizer and Acorn. Barack Obama and Association of Community Organizations for Reform Now (Acorn) filed a complaint through the Chicago court systems.

    Case Name
    Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
    Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
    State/Territory Illinois
    Case Summary
    Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.

    U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).

    The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
    Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Childers, Michael Allen (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Clayton, Fay (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Cummings, Jeffrey Irvine (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Love, Sara Norris (Virginia)
    FH-IL-0011-9000
    Miner, Judson Hirsch (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-9000
    Obama, Barack H. (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Wickert, John Henry (Illinois)
    FH-IL-0011-9000″
    The democrats have successfully crammed socialism down are throats by blowing up the foundation of capitalism are financial institution. Be careful how you vote. Your freedom is at risk. Responsibility is the ultimate regulator and government insurance removes the risk associated with reasonability and this is proof. Congratulations America you have just bought a $700,000,000,000.00 plus of no less than 300% inflated real estate. And win you print that money to pay for this watch out for inflation. we will pay in more ways than just a rise in taxes.

  19. Good homework-well done. Too many people vote on feelings, and not fact and to many have a very short memory. Don’t confuse them with the facts. 99% of the people voting for Obama could not tell you why – we have been asking and they don’t have a clue. They will give you a sound bite from a television commercial and that is about as deep as it gets. Our wonderful educational system is pumping them out faster than we can fix it. Reeducate the masses and in just a generation or two you will be in control. Rewrite history and remove absolutes. It has been in place for awhile now and this is the result. I am a believer but I have my doubts of whether we can turn this around, or not.

  20. Why should any company be bailed out? That’s bs. Let anything that can’t sustain itself FAIL. Success comes from failure

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