Will Congress Never Learn?
Those who ignore history are doomed to repeat it.
Ok, I have no idea who the above quotation should be attributed to, but this article on the current Senate debate over bailout legislation has me scratching my head with wonder.
Resolution authority: In the Wall Street overhaul bills, lawmakers would create a pot of money funded from a tax on the largest banks - a $50 million fund in the Senate bill and a $150 billion fund in the House measure passed in December. Federal regulators would use the money to pay the costs of breaking up or liquidating giant financial firms whose collapse threatens the financial system - solving the so-called "too big to fail" problem.
What a fantastic idea! I mean, tax the banks and financial instutions, and when they mess everything up, use the tax money they paid-in to clean up the mess they left behind. Our financial landscape gets protected, and Joe Taxpayer doesn't have to pay for it, the ones with the potential for making the mess do. Why didn't anyone think of this before?
Oh wait, maybe they have. Maybe I'm way off base, but when I read this, one word pops into my brain.
You know, that big huge pot of money that's supposed to pay for the clean-up of the country's biggest environmental messes.
Where does that money come from anyway? Oh yeah, it was supposed to come from taxes on the chemical and petroleum industries, wasn't it? Right, tax the chemical companies, pool the money into a fund, and when the chemical companies make a mess of things, use the money to clean it up. Brilliant! Only....
The Superfund program receives funding from two annual appropriations: general funds from the Treasury and balances in the Superfund trust fund. In earlier years, revenues for the trust fund came from three dedicated taxes (on petroleum, chemical feedstocks, and corporate income). Those taxes expired in December 1995, however, and the amount of unobligated money in the fund gradually declined to zero by the end of fiscal year 2003. The Superfund trust fund has been funded almost entirely through general revenues ever since. (link)
Note to Congress: We've tried this before. It didn't work. The Superfund has long been plagued with funding problems, and, in the end, Joe Taxpayer has ended up with the bill.
But things will somehow, magically, be different this time, right?
Russell (a.k.a. TMFEldrehad)