Crap Sandwich Redux: Senate to Vote on Bailout Bill

Michelle Malkin and Ed Morrissey have the details on this 451 page monstrosity… That’s right 451 pages! The original Paulson Plan was roughly two pages, the house bill was just over 100 and the senate bill is 451 pages.

Some of the additions in the Senate bill include:

New Tax earmarks in Bailout bill

• Film and Television Productions (Sec. 502)
• Wooden Arrows designed for use by children (Sec. 503)
• 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.

• Virgin Island and Puerto Rican Rum (Section 308)
• American Samoa (Sec. 309)
• Mine Rescue Teams (Sec. 310)
• Mine Safety Equipment (Sec. 311)
• Domestic Production Activities in Puerto Rico (Sec. 312)
• Indian Tribes (Sec. 314, 315)
• Railroads (Sec. 316)
• Auto Racing Tracks (317)
• District of Columbia  (Sec. 322)
• Wool Research (Sec. 325)

The one question that needs to be asked: Is this bailout plan even a good idea? At least a few economists think it isn’t… From CNSNews.com:

Free Market Economists Reject Bailout as Bad Policy that Could Prolong Slowdown
Wednesday, October 01, 2008
By Matt Cover

(CNSNews.com) – The federal government created the current financial crisis, and unless it does some serious housekeeping, no amount of bailout money is going to solve the problem. That’s what some free market economists and experts said when CNSNews.com asked them about the proposed bailout plan that was rejected Monday by the U.S. House of Representatives.

The problem with the plan is that ”it was a bailout,” said Sheldon Richman, editor of The Freeman, a free market journal. “It’s the government swooping in and buying rotten loans from banks (that) made bad mistakes.”

The bailout’s proposed $700 billion price tag was only “a minimum,” according to Richman, who claimed the bailout failed because “the taxpayers were innocent in this and yet they were going to be forced one way or another to pay for these mistakes.”

Richman said that instead of bailing out failed financial institutions, Congress needs to end the bad housing policies that caused the crisis in the first place – a remedy that was echoed by other economists, including professor Jake Haulk of the Allegheny Institute for Public Policy.

“It wasn’t Wall Street that created these guaranteed mortgage-backed securities; it was Fannie Mae and Freddie Mac acting as adjuncts of the government – and they are to blame,” Haulk told CNSNews.com.

“You don’t get a crisis of this magnitude unless there was very heavy government involvement somewhere,” he said, adding that serious reforms are absent from the current proposal.

And there in is the problem with these bailout plans… We’re treating the symptoms but not the disease itself.

Update (4:10 p.m.): Tax cuts not spending earmarks??? Americans for Tax Reform has released a statement calling the term “tax earmark” misleading… Apparently the items listed above are tax cuts not new spending.

Rich Lowry and others are calling tax cuts in the Senate bailout package “earmarks” today.

Calling tax cuts “earmarks” is very unhelpful and completely wrong from a fiscal conservative perspective. There is no such thing as a “tax earmark.” Earmarks are spending. There are appropriations earmarks. There are authorization earmarks. There are no “tax earmarks.” To claim that there are puts tax deductions and credits (which is what we’re talking about here) on the same par as bridges to nowhere. Was the creation of HSAs a “tax earmark?” How about the home mortgage interest deduction? One might call for lowering the rates and broadening the base, but we should not fall into the trap of equating tax cuts and spending increases. That’s how some Senate Republicans got in such massive trouble over health care last year and energy this year vis-à-vis taxes. Read the rest…