The consideration of the $700 billion bailout bill — now lovingly known as the Authorization for Use of Financial Force — has turned into a thriller as the clock winds down on the session of Congress (set to end on Friday) and the stability of markets and financial institutions. Lobbyists for large business trade groups are racing down tips and attempting to defuse unpalatable proposals, limits on executive compensation and bankruptcy relief for homeowners, like Jack Bauer would a nuclear device. According to The Hill, the Chamber of Commerce’s lobbyist Bruce Josten says, “If we don’t move quickly, we could be in the soup.”
One lobbyist is using a flow chart to track proposals, others are reading reports at 4 am. Red Bull sales are probably through the roof. One thing that’s for sure, these lobbyists, the one’s who have worked hard to prevent any kind of oversight of the financial system and the mortgage market leading up to this crisis, are now working to prevent anything punitive or helpful to those who’ve lost their homes in this mess.
Francis Creighton, vice president and chief lobbyist with the Mortgage Bankers Association: “Bankruptcy is such a divisive issue in this debate, and resurrecting bankruptcy right now is completely unproductive … This bill we are talking about is not a mortgage bill, not a housing bill. It’s supposed to address the threats to the entire economy.”
Steve Verdier, a lobbyist for the Independent Community Bankers Association (ICBA), on bankruptcy relief: “We are vigorously opposing that … If that happens, then the mortgage rates for other consumers are going to go up.”
American Banking Association in a letter to Congress: “Authorizing write-downs of mortgages by bankruptcy judges will increase the risks of mortgage lending at a time when the market is already struggling”
During the 2008 cycle the three trade groups represented by these individual lobbyists have spent $3.1 million on PAC contributions to congressional lawmakers. Over the same time period they’ve spent $8.9 million dollars on lobbying Congress. (Data from OpenSecrets.org) That amount of money gives them the access they need to get their message to Congress.
During this lobbying feeding frenzy, Congress should be asking themselves one simple question, “Should I be listening to the very people who helped cause this mess? Shouldn’t I try to listen to someone else?”
If lawmakers wanted to they could go to PublicMarkup.org and see what people are saying about each section of both the Dodd proposal and the Paulson proposal. It could be a useful way to have a discussion directly with people concerned about the bill, rather than the money merchants of K Street. Already, 81 comments have been left on the Dodd bill and 41 on the Paulson proposal.