[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[House]
[Page 13]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2000

                          TAX BANKERS' BONUSES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Ohio (Mr. Kucinich) is recognized for 5 minutes.
  Mr. KUCINICH. Mr. Speaker, it is said that one out of every three 
American homeowners is underwater with their mortgage, meaning that 
they owe more on their mortgages than the house in which they live is 
worth. One out of every three Americans.
  We know that this year there could be at least 8 million Americans 
actually losing their homes. We know there are 15 million Americans 
unemployed. There have been record numbers of foreclosures and also 
record numbers of business failures. There has been a credit freeze. 
Some say that we have a jobless recovery, or a cashless recovery if you 
are an investor and you wait for your dividends because dividends 
aren't in at the moment, and perhaps even a homeless recovery where 
people are losing their homes, losing their jobs, losing the quality of 
their investments. And it is said that the economy is recovering.
  What is going on in America? What is going on is the banks have taken 
enormous power during the last few years, and they have received that 
power from the Federal Government in the form of bailouts. I voted 
against the bailouts. I don't think the government should be picking 
winners and losers in the economy. And I also don't think that the 
government should serve as an engine to take the wealth of the Nation 
and accelerate it upwards, because that is exactly what has happened. 
Whether it has been a Republican or Democrat administration, that 
process of acceleration of the wealth is continuing.
  Now U.S. banking companies have been the beneficiaries of 
unprecedented government money in the form of multiple, ongoing, 
taxpayer-financed Federal Government bailouts and subsidies, virtually 
unlimited access to money at near zero rates of interest, Federal 
purchases of impaired assets, low-cost loans, open-ended guarantees, 
all in the name of restoring normalcy to U.S. financial markets.
  In the coming days, banks are expected to begin paying out 
substantial bonuses to top executives. The total amounts rival the 
payouts at the peak of the real estate bubble in 2007 and are set 
against a clear commitment of policy to strengthen the underlying 
health of the banking system by enabling banks to recapitalize. The 
bonuses being paid out could and should be directed primarily toward 
enhancing the capital base of the banking system. Banks could also use 
the profits to deal with unrecognized losses from real estate 
transactions and other imprudent investments to reduce outsized fees 
charged to struggling consumers, to increase lending to small- and 
medium-sized businesses, and for a variety of other purposes that would 
provide struggling Americans with a more vibrant and beneficial 
financial system.
  Today, banks are earning outsized profits, not by lending or 
investing in the American economic prosperity, but by trading interest-
free dollars taken from the Federal Reserve for other financial assets 
in the U.S. and around the world. And rather than use these profits to 
enhance the capital of the banks, they are being taken out in the form 
of bonuses to benefit certain individuals, corporate banking executives 
who have been more lucky than smart.
  Now in order to staunch this leakage of corporate profits from bank 
reserves and shareholder capital, I have introduced H.R. 4414, The 
Responsible Banking Act, that would tax banks for the windfall bonuses 
they pay to their management, and the tax would be at 75 percent. We 
cannot let banks crush businesses. We cannot let banks challenge this 
government with our own tax dollars. We need broad reform in our 
financial system, and I will be addressing that at another time. But 
one element of that reform must be to impose some fiscal discipline 
onto these banks that think that they can get away with giving 
themselves mega-bonuses while the rest of America is suffering and 
starved for capital.
  Support H.R. 4414.

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