Log In | Register
Waaaaay back in September, amid tanking numbers on Wall Street, sky-high unemployment and predictions of certain economic doom, Congress decided to give the banking industry an early Christmas present: 700 billion smackeroonies! No Great Depression! No "It's a Wonderful Life" remakes for the modern holiday season!
Remember that?
Lawmakers fought about it, John McCain fake-suspended his campaign over it, the House failed it once, and then, finally, after the Senate packed it full of pork, it was delivered to Wall Street with a bow on top. But! That's the bailout story you know about; the one you can hold your member of Congress accountable for.
Turns out there's another one. A little addendum. A little sideshow with ten zeroes on the end of it. While the rest of the country was busy wrapping up the $700 billion banking bailout package for Christmas in September, the Treasury Department, under Secretary Henry Paulson, was sneaking its own little gift under the tree. It was no $700 billion but this was a gift that keeps on giving. You see, once upon a time there was a scrappy little law - we'll call him Section 382 of the tax code - and Section 382 told all the corporations that they could not avoid paying their taxes simply by purchasing a failing company. But right in the middle of the bailout chaos, when, apparently, no one was looking (I wasn't. Were you?) the Treasury Department reversed Section 382.
So, Merry Christmas, banks! Don't wanna pay your taxes anymore? That's OK. Just use that $700 billion we just gave you to buy some losing companies as tax shelters! The Washington Post, with details on Paulson's Secret Santa gift, reports today, "The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal."
So... nobody told Congress. And: It might be illegal. Let's see, what else? Oh yeah, members of Congress, even the ones who are steamed because nobody told them about it, even the ones who think it was illegal, many of them are afraid to say anything -much less do anything- about it for fear of further antagonizing the economy.
The Post quotes an unnamed Congressional aide today, who sums it up like this: "We're all nervous about saying this was illegal because of our fears about the marketplace... To the extent we want to try to publicly stop this we're going to be gumming up some important deals."
Oh, and pay no attention to the $140 billion that just got sucked out of your wallet without debate and possibly against the law. That's in addition to the $700 billion Uncle Sam already forked over. Is this "the other shoe" dropping? I hope so. But I can't help but think that a bailout bill so full of ambiguity has at least a few more financial landmines up its sleeve, that the hue and cry about the dangers of giving banks so much money may turn out to have been spot on.
I need to be talked down.
Start Tracking
Stop Tracking
