[Congressional Record (Bound Edition), Volume 154 (2008), Part 14]
[Senate]
[Pages 19900-19901]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            FINANCIAL CRISIS

  Mr. SANDERS. Mr. President, I wish to say a few words on the crisis 
about which everyone in America is talking. My phones, both in Vermont 
and here in Washington, have been bouncing off the hook with people who 
are outraged about the prospect of the middle class bailing out Wall 
Street. They are telling me: No way; we should not be doing that.
  The current financial crisis facing our country should, in fact, put 
an end to almost any support for the extreme rightwing economic 
policies President Bush has been pursuing for the last 8 years and 
that, in fact, were pursued even before that.
  These policies include, of course, huge tax breaks for the very rich 
under the guise that that money will trickle on down to ordinary people 
and create a prosperous nation. That certainly has not been the case.
  Those policies include unfettered free trade, which says it is a good 
thing for corporate America to be able to throw American workers out on 
the street, move to China, and bring those products back into this 
country and run up what is now over a $600 billion-a-year trade 
deficit.
  Last but not least, and pertinent to the great financial crisis we 
are facing right now--a crisis which many people believe is the most 
serious financial problem this country has had since the Great 
Depression of 1929--is the whole of deregulation, not only of financial 
services but of energy and many other sectors in our economy, under the 
guise that we should have great faith in large financial institutions, 
that they will do the right thing and that they will benefit the people 
of our country and, in fact, the world.
  We have learned tax breaks for the rich do not filter down but make 
the rich richer. We have learned unfettered free trade costs us 
millions of good-paying jobs. We have learned that massive 
deregulation, allowing large financial institutions to do whatever they 
want to do under the radar screen, will only hurt our economy and maybe 
drive it to ruin.
  In the midst of all this, it is important to understand what has been 
going on for ordinary people in this country. Since President Bush has 
been in office, nearly 6 million Americans have slipped out of the 
middle class and into poverty all over this country. In Vermont, as I 
suspect in Rhode Island, working people are working two jobs; husbands 
and wives who were working are now reduced to going to emergency food 
shelves in order to buy groceries they need to take care of their 
families. Since George Bush has been President, the median family 
income for working Americans has declined by more than $2,000, a huge 
decrease in the income for the middle class. Since President Bush has 
been in office, more than 6 million Americans have lost their health 
insurance, over 4 million have lost their pensions, foreclosures are at 
an alltime high, consumer debt has more than doubled, and today we have 
a national debt which is almost $10 trillion, a debt we are going to be 
leaving to our kids and our grandchildren. That is what is happening to 
the middle class under these extreme rightwing economic policies.
  But in terms of this debate about what we do with regard to the 
current financial crisis we are facing, it is also important to 
understand not only what is happening to the middle class and the 
decline of the middle class, it is also important to understand what is 
happening to the people on top, the wealthiest people in this country. 
The top one-tenth of 1 percent now earns more income than the bottom 50 
percent of the American people: One-tenth of 1 percent, bottom 50 
percent. The top 1 percent now owns more wealth than the bottom 90 
percent. This country has the most unequal distribution of wealth and 
income than since just before the Great Depression in the 1920s.
  Mr. President, the wealthiest 400 people in our country, since 
President Bush has been in office, have seen their wealth increase by 
$670 billion. Let me repeat that in case people are kind of scratching 
their heads because this is such an extraordinary number. The 
wealthiest 400 people--that is not a whole lot of people--in our 
country have seen their wealth increase by $670 billion since President 
Bush has been in office.
  In the midst of all of that, while the rich become phenomenally 
richer, President Bush lowered taxes on the very wealthy so they are 
now paying lower income tax rates than teachers, nurses, policemen, 
firemen, than people in the middle class.
  I raise that issue for a very simple reason. Secretary Paulson, 
representing the Bush administration, which year after year until a few 
months ago was telling us how robust and strong the economy was--I 
remember, as a member of the Budget Committee, having Secretary Paulson 
in front of us not very long ago telling us the economy was marvelous. 
Marvelous.
  In late July of this year, President Bush himself said the 
foundations of the economy were strong. That was on July 31. So after 
having told us what most middle-class Americans knew instinctively to 
be wrong, having told us over and over again how strong the economy 
was, how robust the economy was, last week the Secretary of the 
Treasury basically said in so many words: I guess we made a slight 
mistake. The fundamentals are really not very strong. In fact, if we do 
not act on the largest bailout in the history of our country, and you 
in Congress can take

[[Page 19901]]

a few days to respond, but if you do not act, there will be a financial 
meltdown not only in America but all over the world.
  So year after year, until very recently, either because of 
incompetence and not understanding what was going on in the economy or 
perhaps dishonesty and not wanting to let the American people know what 
was going on in the economy, we were told everything was going well. 
Then they say: Oops, we made a slight mistake. Actually, we are on the 
verge of a major financial meltdown and we want Congress to accept a 
$700 billion bailout, and we do not want the Congress to discuss it 
very much. We do not want the Congress to change it very much. It has 
to act immediately because if it doesn't, terrible things will happen.
  Well, when we talk about the reasons for the possible need of a 
bailout, we cannot minimize the incredible greed, the ugly greed we 
have seen among many of the wealthiest people in this country in the 
last few years, not least of all the people on Wall Street.
  Let me give you some examples. In 2005, Henry Paulson, our now 
Secretary of the Treasury, was then the CEO of Goldman Sachs. He 
received, in 2005, a $38 million bonus. At that time, that was the 
largest bonus ever given to a Wall Street CEO.
  In December of 2006, John Mack, the CEO of Morgan Stanley, broke Mr. 
Paulson's record by receiving a $40 million bonus--a bonus. This is on 
top of other forms of compensation.
  Not to be outdone, Lloyd Blankfein, the new CEO of Goldman Sachs, 
received a $53 million bonus later that month. In 2007, 1 year ago, Mr. 
Blankfein, the CEO of Goldman Sachs shattered his own record by 
receiving a $68 million bonus.
  In October of 2007, E. Stanley O'Neal, the former chief executive of 
Merrill Lynch--I think we all know what has happened to Merrill Lynch 
very recently--collected a severance package worth an estimated $161 
million.
  Angelo Mozilo, the former CEO of Countrywide--we know what happened 
to Countrywide--received a severance package of about $110 million. 
That was on top of $140 million in Countrywide stock that he sold off 
during 2006 and 2007. Mozilo was also paid $48 million in 2006.
  In 2007, here is perhaps--when we talk about Wall Street greed and 
when we talk about Wall Street bonuses--the most outrageous fact out 
there, which is that in 2007 Wall Street's five biggest firms--Bear 
Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan 
Stanley--paid out $39 billion in bonuses to themselves.
  Wall Street investment bank bonuses are larger, just their bonuses, 
than the gross domestic products of Sri Lanka, Lebanon, or Bulgaria, 
and the average bonus--average--of $219,000 is more than four times 
higher than the median U.S. household income.
  Why do I raise those issues and give those facts? I do that for a 
very simple reason; that is, I regard it as an outrage for anyone to 
suggest the middle class of this country, whose standard of living is 
going down, should be forced to bail out Wall Street when people on 
Wall Street have made huge amounts of money in recent years and, in 
general, as a result of Bush's reckless and irresponsible economic 
policies.
  The wealthiest people have also done extraordinarily well. What 
President Bush would have us do is to say to the middle class that is 
sinking, you pay for the bailout caused by Wall Street's 
irresponsibility, and we do not have to ask them to do anything. They 
pay no price at all.
  I regard that as an absolutely unacceptable outrage, something we 
must not allow to happen. I am open to other ideas on this issue, but 
for me, the bottom line on this bailout is that the middle class should 
not be paying. There are a number of ways we can go forward to protect 
the middle class. I have suggested a 5-year, 10-percent tax on incomes 
over $1 million a year for couples, and $500,000 for single taxpayers. 
That would raise more than $300 billion in revenue.
  That begins the process of saying to the wealthiest people who have 
benefitted from Bush's reckless policies: You have to step to the 
plate, and this is not going to be on the middle class to provide the 
money for the bailout--this money, by the way, which is $2,200 for 
every woman, man, and child in this country and, a family of four, 
close to $9,000.
  In addition, we have to ensure that assets purchased from banks are 
realistically discounted so companies are not rewarded for their risky 
behavior and taxpayers can recover the amount they pay for them.
  Thirdly, we must require that the taxpayers receive equity stakes in 
the bailed-out companies so the assumption of risk is rewarded when a 
company's stock goes up. We are going to buy this stuff, and as stocks 
go up we should benefit from that. In addition, at a time when the 
middle class has so many serious problems; when people in my State and 
in the State of the Senator from Rhode Island are worried about how 
they are going to be able to heat their homes this winter; when 
millions of middle-class families are worried about how they are going 
to be able to send their kids to college; at a time when our 
infrastructure is collapsing, and we have the potential to create 
millions of jobs rebuilding our bridges, our roads, our rail systems; 
at a time when we must move from fossil fuels to energy efficiency and 
sustainable energy and create large numbers of jobs in that area as 
well; we need a major economic recovery program which puts millions of 
Americans to work dealing with the many unmet needs facing our country.
  In addition, to my mind, any serious piece of legislation dealing 
with this bailout must include language which undoes the damage caused 
by excessive deregulation. That means reinstalling regulatory firewalls 
that were ripped down in 1999. And, lastly--not lastly because I think 
many other people have other good ideas as well, but the last point 
that I want to make tonight is a very important point.
  We are where we are today because of the doctrine of ``too big to 
fail.'' The assumption is that if we allow these huge institutions to 
fail, they take down the entire economy and virtually all of our people 
suffer.
  I would respond to that in the future by saying that if an 
institution is too big to fail, that institution is too big to exist. I 
should tell you that I have serious concerns right now about the Bank 
of America swallowing up Countrywide, swallowing up Merrill Lynch. If 
they were to be teetering, does anyone have any doubt that there would 
have to be a massive bailout for that bank? But it is not only the Bank 
of America. I think we have to take a very hard look at these huge 
institutions, which, if they fail, could impact the entire economy. I 
think we need to start doing something that was talked about in the 
early part of the 20th century about breaking up these huge 
institutions.
  There is a lot of work that has to be done in the near future. But 
for me, the bottom line is that at a time when the wealthiest people 
made out like bandits under Bush's reckless economic policies, while at 
the same time the middle class declined, it would be absolutely 
grotesque to ask the middle class of this country to pay for this 
bailout.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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