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Senate Proceeding on Mar 4th, 2010 :: 3:33:25 to 3:48:30
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James Webb

3:33:21 to 3:33:41( Edit History Discussion )

James Webb: granting of that request, i would ask for the quorum call to be the presiding officer: without objection, so ordered. a senator: mr. president? the presiding officer: the senatorrom virginia. mr. webb: i ask unanimous consent that the quorum call be vitiated. the presiding officer: without objection. mr. webb: mr. president, i'd

James Webb

3:33:25 to 3:48:30( Edit History Discussion )
Speech By: James Webb

James Webb

3:33:42 to 3:34:05( Edit History Discussion )

James Webb: like to speak about amendment number 3342, which i have introduced with respect to the legislation in question. there has been some confusion, i believe, among my colleagues about what exactly is contained in this amendment which i

James Webb

3:34:06 to 3:34:26( Edit History Discussion )

James Webb: introduced with senator boxer as an individual stand-alone bill previously and introduced in similar format here on this piece of legislation. i would like to emphasize to my colleagues here that this is a carefully drafted, one-shot

James Webb

3:34:27 to 3:34:49( Edit History Discussion )

James Webb: amendment designed to give the american taxpayers a place on the upside of the recovery of the financial system that they, quite frankly, enabled. this amendment would provide a onetime 50% tax on bonuses that

James Webb

3:34:50 to 3:35:10( Edit History Discussion )

James Webb: are above $400,000 of the -- of any initial bonus that is paid to executives of financial institutions that received a minimum of $5 billion in the tarp program. and it is only for income that was generated through work in

James Webb

3:35:11 to 3:35:31( Edit History Discussion )

James Webb: 2009 and compensated in 2010. in other words, this is a one-shot matter of fairness to balance out the rewards that these financial institutions received which were enabled by the contributions of the american taxpayer in the tarp program.

James Webb

3:35:54 to 3:36:15( Edit History Discussion )

James Webb: not create this economic crisis. they were required to bail out those people who did create it, and they deserve to share in the upside, in the rewards that they themselves enabled. paul krugman, who is a nobel prize-winning economist, wrote in july of 2008 about his

James Webb

3:36:16 to 3:36:36( Edit History Discussion )

James Webb: concern at the very inception of this economic crisis that we were moving toward a tendency in this country to socialize risk and to individualize reward. in other words, whenever we create a situation where there is an economic challenge, the american taxpayers at large were

James Webb

3:36:37 to 3:36:57( Edit History Discussion )

James Webb: expected to absorb the risk. but then when the reward comes in, only the executives, the people who were managing the financial system were able to actually get the rewards. this particular reward in this one-shot tax proposal has come about largely as the result of

James Webb

3:37:20 to 3:37:40( Edit History Discussion )

James Webb: on the tarp program on october 1 of 2008, i think it was a very difficult vote and it was a very defining moment here in the senate. and we need to remind ourselves of what was going on at that point. we were called on a mass conference call here in the united states senate by the secretary of treasury and

James Webb

3:37:41 to 3:38:02( Edit History Discussion )

James Webb: chairman bernanke telling us that if we did not move $700 billion forward without a hearing, in an emergency basis, that the wld's economic systems were going to go into cataclysmic free fall. i, like a lot of people, struggled with that vote. i talked to as many people as i

James Webb

3:38:03 to 3:38:24( Edit History Discussion )

James Webb: could across the philosophical spectrum. i laid down a number of principles. once, we should look at executive compensation. another we should look at reworking the financial sector which chairman baucus has taken the lead.

James Webb

3:38:25 to 3:38:47( Edit History Discussion )

James Webb: a another is we include the american taxpayer on the upside of recovery. in other words, if the taxpayers were going to have to put money in when these troubled assets or toxic assets -- whichever term people would like to use -- couldn't find a value and were clogging up our economic system and clogging up our liquidity, that once that situation was cleared and a value was placed on these amounts and the economy

James Webb

3:38:48 to 3:39:08( Edit History Discussion )

James Webb: started to recover, that a portion of that benefit should go to the taxpayers who had to put that money out. there's been some talk about how, with these companies -- and we're only talking about 13 companies got $5 billion or more, that with these companies tarp money has been paid back.

James Webb

3:39:09 to 3:39:29( Edit History Discussion )

James Webb: and in some cases a good bit of this money has been paid back. but i'd like to make two points here. first is any moneys that were paid back were received at the earliest in midyear last year, 2009. meaning that taxpayer assistance to these companies was very much in effect. and quite frankly, among the 13

James Webb

3:39:30 to 3:39:53( Edit History Discussion )

James Webb: companies included in our amendment, most of the money has not been paid back. i've had some questions here on the floor about how -- whether this amendment we're offering discriminates against new york. well, quite frankly, two of the largest companies with respect to bailout commitments are based

James Webb

3:39:54 to 3:40:15( Edit History Discussion )

James Webb: in d.c. and in my own state of virginia. this is -- got nothing to do with regional disagreements or class envy of any sort. it's just a matter of how we ought to deal fairly with the way that our taxpayers are working -- taxpayers or working people had to step forward. the second point that would be made in terms of the tarp money being paid back is that the

James Webb

3:40:16 to 3:40:38( Edit History Discussion )

James Webb: extent of our government's obligation to these bailout companies is astronomical. it's beyond the $700 billion we're talking about. this goes to paul krugman's point which he has made consistently since 2008 about continual little socializing risk that is enabling these rewards and not giving a benefit

James Webb

3:40:39 to 3:41:00( Edit History Discussion )

James Webb: to the people who, that largely took the risk. the billions of dollars in bonuses that are being paid out are a direct result not only of a tarp bailout but also generous federal reserve policies over the last year. we've seen zero, near zero intere rates, a discount window and we've had toxic assets bought by taxpayers.

James Webb

3:41:01 to 3:41:21( Edit History Discussion )

James Webb: at the same time these firms were able to borrow cheaply, to lend at a higher rate, charge fees and to leverage their bets into fueler financial transaction -- into purely financial transactions. if you examine a quarterly report to the congress, they indicate the true potential amount of support the federal

James Webb

3:41:22 to 3:41:42( Edit History Discussion )

James Webb: reserve was providing these programs was in the neighborhood of $6.8 trillion. so, these risk takers, these people who were managing at the top level in these companies did so at time that they had enormous backup from the

James Webb

3:41:43 to 3:42:04( Edit History Discussion )

James Webb: american taxpayer. edward cuomo, attorney general of new york, wrote a letter in january of this year to tarp recipients. and in this letter, he made a couple of very important points that go to the intent of our legislation here. he first said that -- i'm going to quote from beginning and the end, and i ask unanimous consent

James Webb

3:42:05 to 3:42:25( Edit History Discussion )

James Webb: that the entire letter be included in the record at the end of my statement. the presiding officer: without objection, so ordered. mr. webb: he states in here the new york attorney general conducted an inquiry into various aspects of executive compensation at many of our nation's largest financial institutions, including a review of compensation practices at the original -- of the original 2008

James Webb

3:42:26 to 3:42:48( Edit History Discussion )

James Webb: tarp recipient banks. he makes, i think, a very val point at the end of his letter when he said -- in this particular letter i'm reading, he's writing to a company that had paid back the initial tarp money. he says "when you receive tarp funding, your firm took on a new responsibility to taxpayers. while your firm has now paid the

James Webb

3:42:49 to 3:43:10( Edit History Discussion )

James Webb: money back" -- and again most of the money has not been paid back -- "it's not clear your firm would have been in the same position now had you not received that tarp money." we've all struggled with this issue. there have been many different approaches on this. in fact, chairman baucus has

James Webb

3:43:11 to 3:43:32( Edit History Discussion )

James Webb: been out front on this issue in a number of different ways. and i have in front of me here the compensation fairness act of 2009, which chairman baucus introduced last march, which was one way to attempt to address

James Webb

3:43:33 to 3:43:53( Edit History Discussion )

James Webb: this issue of windfallrofits, bonuses. this legislation was sponsored by senator grassley. it was sponsored by senator schumer, by senator mendez and others. and our bill, i believe, is much narrower than this bill. this bill would tax bonuses of more than $50,000.

James Webb

3:43:54 to 3:44:14( Edit History Discussion )

James Webb: our bill taxes bonuses of more than $400,000. and this bill would have taxed institutions that received more than $1 million. ours requires $5 billion. this bill was retroactive and recurring in terms of the taxes. ours is one shot, just on this

James Webb

3:44:15 to 3:44:38( Edit History Discussion )

James Webb: 2009 amount of money that came in as a result -- or the benefits that came in as a result of our taxpayers stepping forward and putting $700 billion into the tarp program. senator brown of ohi has introduced legislation that would put a windfall profits tax on any bonus higher than $25,000.

James Webb

3:44:39 to 3:45:01( Edit History Discussion )

James Webb: our amendment was inspired and designed basedn a couple of previous writings and pieces of legislation, the first being the baucus legislation was a starting point for it. the other was, i think, a very powerful article written in "the

James Webb

3:45:02 to 3:45:22( Edit History Discussion )

James Webb: financial times," one of the most conservative economic newspapers in the world, last november where martin wolf pointed out -- and i'm going to read he can serpts from this article. he said "windfall taxes are a ghastly idea. now why do i find the idea of a windfall tax on banks so

James Webb

3:45:23 to 3:45:43( Edit History Discussion )

James Webb: appealing? this time it really looks different. first, all the institutions making exceptional profits do so because they are benefiaries of unlimited state insurance for themselves and their counterparts. second, the profrts being made today -- profits being made today are the fruit of money provided by the central bank and

James Webb

3:45:44 to 3:46:06( Edit History Discussion )

James Webb: arm of the state. third, the case for generous subventions is to restore the financial system and sow the economy to health. fourth, ordinary people can accept that risk takers receive huge rewards, but such rewards for those who have been rescued by the state and bear substantial responsibility for

James Webb

3:46:07 to 3:46:27( Edit History Discussion )

James Webb: the prices are surely intolerable. fifth, windfall support should be matched by windfall taxes. his proposal, which inspired the specifics of our amendment, was that there could be a one off windfall on bonuses, a onetime

James Webb

3:46:28 to 3:46:48( Edit History Discussion )

James Webb: windfall on bonuses to equal the playing field out in terms of this unique situation that our country found ourselves in. i would just like to say to my fellow members and to other people who are dng the hard work of keeping our economy

James Webb

3:46:49 to 3:47:10( Edit History Discussion )

James Webb: stng, i respect what it takes to take a risk and get a reward. i -- i respect the entrepreneurship that has strengthened our country throughout its history. but we also need to rember, the working people in this country strongly and rightly believe that they have borne the

James Webb

3:47:11 to 3:47:31( Edit History Discussion )

James Webb: brunt of this economic crisis and they just as strongly and rightly believe that they are becoming the last to be rewarded as we begin to recer from it. our taxpayers, our working people rescued a financial system that was on the verge of collapse because of massive acts of bad judgment by the very

James Webb

3:47:32 to 3:47:53( Edit History Discussion )

James Webb: companies that are now reaping huge bonuses from the government's intervention. it's not too much to ask those who have been fully compensated andho have received in excess of $400,000 bonus on top of their compensation, that they pay a one-time tax and share

James Webb

3:47:54 to 3:48:14( Edit History Discussion )

James Webb: that excess on top of their $400,000 bonus in order to help make their rescuers a little more secure. thank you, mr. president. i yield the floor. and i suggest the absence of a quorum. mr. baucus: before you rule on

James Webb

3:48:15 to 3:48:31( Edit History Discussion )

James Webb: that, i quorum calls prior to the vote at 2:30 be charged equally to both sides. objection, so ordered. the clerk will call the roll.

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