Today, Americans for Tax Reform sent the following letter to Sen. Shelby thanking him for his opposition to the proposed $50 billion permenant bailout slush fund created by Sen. Dodd’s proposed Restoring American Financial Stability Act of 2010.
The letter reads:
The Honorable Richard Shelby
304 Russell Senate Office Building
Washington, DC 20510
Dear Sen. Shelby:
On behalf of Americans for Tax Reform (ATR), I want to applaud your efforts calling for an elimination of the proposed $50 billion fund that will ultimately be used as a permanent bailout slush-fund, in Sen. Dodd’s financial reform bill.
As you know, the $50 billion Orderly Liquidation Fund established under Sen. Dodd’s draft will have privilege to borrow unlimitedly from the Treasury and the FDIC is given permission to draw from this Fund. This is nothing more than a permanent, unlimited TARP program that will be used to bailout politically important financial institutions.
The cost of this Liquidation Fund will be paid for by financial firms with assets over $50 billion. However, the real cost of this will be passed on to American consumers. Your statement, “the mere existence of this fund will make it all too easy to choose a bailout over bankruptcy” could not be more correct. Even the Treasury Department thinks this fund is unnecessary.
Additionally, the provision to give the Federal Reserve oversight of the nation’s top 35 firms with assets of over $50 billion will continue to promulgate the “too big to fail” farce. The current Administration is picking winners and losers in the marketplace. The losers, unfortunately, are rewarded with taxpayer money and continued bailouts. We have adequate systems in place to handle failing institutions – bankruptcy.
Your concerns surrounding the establishment of this bailout fund are valid and I thank you for voicing your opposition. ATR is continuing to urge all members of the Senate to oppose this bill as it has several damaging provisions, including over-the-counter (OTC) derivative transaction reform, among others, that are unacceptable.
Please feel free to contact Federal Affairs Manager Brian Johnson at [email protected] or 202.785.0266 in my office with any questions or for more information.
Onward,
Grover G. Norquist
cc: Treasury Secretary Timothy Geithner
All Members of the U.S. Senate