News Home

Legislation would deny second half of $700 billion

By Scott Nicholson
January 15, 2009

N.C. Rep. Virginia Foxx (R-5) introduced legislation to deny authorization of the second half of the $700 billion federal government bailout, saying it has not proven effective in helping the economy.

The legislation is designed to take advantage of a provision in the 2008 bailout law that allows Congress to vote down the second half of the bailout if results of the effort are unsatisfactory. “I hope we can draw some attention to the issue and hope we can have a vote on it,” Foxx said.

“In the days since I first voted against the bailout last year the $700 billion of taxpayer money has turned into a giant political slush fund,” Foxx said. “Not only did the administration completely change course in its use of bailout money, but there has been absolutely no oversight of the first half of the bailout. This is taxpayers’ money we’re talking about.”

Foxx said, to her knowledge, all but $2 billion had been spent of the initial $350 billion. “We do not know where that money’s going,” Foxx said, adding she and others were meeting with bank regulators to find out how the money is being used.

Foxx said the general attitude in Washington was that leaders felt a need to take some kind of action, though privately even some bailout supporters weren’t sure if the economic recovery was working.

“There’s a Democratic mantra that something has to be done,” Foxx said. “If you listen to them, they make it sound like we’ve never been in a worse situation, and everything’s just horrible, to justify doing more things with the government.”

Foxx said she believed government should get out of the way and let the economy resolve itself. She said the Great Depression ended because of World War II and not because of federal jobs programs and spending plans.

“My position is we should do something that minimizes the role of the government,” she said. “Rather than produce this $1.2 trillion stimulus package, which purports to have tax cuts, why don’t we just cut the payroll tax and let people keep more money in their pockets? But then it doesn’t look like the government is giving something to you. What the liberals want to do is make you feel dependent on the government.”

Foxx said her ideas for sparking the economy, in addition to cutting payroll taxes, would be to keep more money in the private sector through capital-gains tax holiday to provide incentives to home buyers and to cut business taxes.

Foxx said creating federal jobs would “create a long-term problem,” and said funding infrastructure improvements would inevitably create pork-barrel projects.

“I think the bailout thus far has been such a failure that even the Democrats are under the gun to show some effectiveness from this particular bailout,” Foxx said, though she said she wasn’t sure which direction the economic stimulus efforts would take.

Foxx said even the Democrats say they have no idea what will be in the economic-stimulus package that will be presented to President-Elect Barack Obama and said a proposed $300 billion tax cut is “more welfare in increasing the Earned Income Tax credit, for example.”

“Language is important, and they’ve done a pretty good job in terms of setting in the minds of people what they’re doing, and then when the proposal comes out it’s actually something different,” Foxx said.

Foxx said at least one Democrat had signed on to support her legislation, noting there was little time to line up co-sponsors because of the hectic atmosphere in Washington, D.C.

According to the 2008 bailout law, Foxx’s measure must be considered by Congress within five days of when the White House requests the second half of the bailout money.

“What people aren’t thinking about is that this is not new money, this is debt that we’re giving our children and our grandchildren,” Foxx said. “This money that is coming in now has to be paid back sometime.”