Today in Washington D. C. - Oct 15, 2008

Even with the US Congress not in session, planned actions by the Democrat leadership continue and are shaping up to be another even greater "stimulus" spending, massive government control and regulation, restrictions of freedom of speech and more. Some brief references in yesterday's and today's press are presented below:

Yesterday: The Washington Post reported that House Democrats are considering another $300 billion “stimulus” package. At the beginning of the month the House actually passed a $61billion spending package, which morphed into a $150 billion proposal from House Speaker Nancy Pelosi last week. How much will Democrats call to spend next week? Will the amount double again?

Politico looked at what sort of spending is actually being proposed and finds that “[t]he major spending pieces in any package are largely familiar. Any Democratic recovery bill would almost certainly commit tens of billions to public infrastructure projects. And, in an effort to forestall layoffs at the state and local level, Washington would step in to pay a greater share of the state-federal Medicaid health care program for the poor and disadvantaged. Unemployment benefits — left out of the first stimulus bill last winter — would be included, as would some increase in food stamp payments.”

Of course, a bloated spending package is not the only legislative item Democrats have their eyes on. Writing in The Weekly Standard, Fred Barnes warns of the major proposals that seem likely to come from Democrats in Congress next year. Among them are the card check bill to eliminate secret ballots in union elections, a renewal of the fairness doctrine, which could choke off talk radio, a complex and far-reaching global warming bill that would raise energy prices, and, of course, a massive new government health care plan.

Today: Fox News reports today that Senate Majority Leader Harry Reid is planning on introducing his own version of a new stimulus package when the Senate returns in November. According to Fox, aides the plan “will incorporate all of the tax cuts and regulatory actions that Sen. Obama outlined Monday in a major policy address in Toledo, Ohio.”

Once again, Reid's penchant for partisanship knows no bounds. Instead of pledging to come up with a bipartisan plan, Reid is simply going to use his presidential candidate’s proposal. This is, of course, the same Harry Reid who complained during negotiations over the financial rescue bill, “The insertion of presidential politics has not been helpful. I repeat, the insertion of presidential politics has not been helpful. It’s been harmful.”

In The Wall Street Journal (op-ed), Peter J. Wallison of the American Enterprise Institute, discussed Democrats’ latest talking point claiming that Republican support for deregulation is the cause of our current financial woes. Wallison writes, “While there has been significant deregulation in the U.S. economy during the last 30 years, none of it has occurred in the financial sector.” But what of the Gramm-Leach-Bliley bill that supposedly repealed the sensible 1930s regulations of Glass-Steagall? Wallison notes that Glass-Stegall “prohibited commercial banks from underwriting or dealing in securities, and from affiliating with firms that engaged principally in that business. The [Gramm-Leach-Bliley legislation] repealed only the second of these provisions, allowing banks and securities firms to be affiliated under the same holding company. Thus J.P. Morgan Chase was able to acquire Bear Stearns, and Bank of America could acquire Merrill Lynch.”

Wallison continues, “Allowing banks and securities firms to affiliate under the same holding company has had no effect on the current financial crisis. None of the investment banks that have gotten into trouble -- Bear, Lehman, Merrill, Goldman or Morgan Stanley -- were affiliated with commercial banks. And none of the banks that have major securities affiliates -- Citibank, Bank of America, and J.P. Morgan Chase, to name a few -- are among the banks that have thus far encountered serious financial problems. Indeed, the ability of these banks to diversify into nonbanking activities has been a source of their strength. . . . Most important, the banks that have succumbed to financial problems -- Wachovia, Washington Mutual and IndyMac, among others -- got into trouble by investing in bad mortgages or mortgage-backed securities, not because of the securities activities of an affiliated securities firm.” If Democrats want to continue to demonize deregulation, they may need to find a better talking point.

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Tags: economic stimulus, Fred Barnes, government regulation, Harry Reid, Nancy Pelosi, US Congress, US House, US Senate, Washington D.C. To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!