Judd Gregg (R-NH) and Bob Corker (R-TN) are throwing their own side under the bus on financial deform. It all involves the Federal Reserve.
While saying they are working to ensure the federal government stops bailing out businesses, Corker and Gregg are working over time to defeat an amendment offered up by Senators Vitter and Sessions that would actually stop bailouts.
You need to understand what the Federal Reserve’s 13(3) authority is. Under (13)(3), the Federal Reserve bailed out (or salvaged if you prefer) AIG and Bear Sterns. It is the primary vehicle through which the Fed bailed out the “too big to fail” entities.
Vitter and Sessions are offering up an amendment to the financial deform legislation to “ensure that any stabilization efforts made through the Federal Reserve’s 13(3) authority are made through clearly defined rules that ensure the loan is made against quality collateral to solvent companies. The stabilization efforts are prohibited from allocating credit or artificially propping up certain segments of the economy. And, the Board of Governors and Treasury will establish procedures in advance to prevent the monetizing the losses on the Federal Reserve’s balance sheet.”
Gregg and Corker are trying to kill that.
What’s more, Gregg is ridiculing those who simply want to audit the Federal Reserve. Yesterday, Gregg said, “we have a lot of Fed haters around here, I guess those people must not be fans of sound monetary policy….”
Actually Senator Gregg, a lot of us are deeply considered about sound monetary policy and want to make sure we have the money the Fed claims it has and, if so, exactly how it intends to use it.
The danger here is simple: most Republicans do not actually understand what is in the financial deform legislation. Gregg and Corker are capitalizing on that to undermine the Vitter and Sessions amendment.
They want to keep being able to bailout companies without any oversight or accountability.