Posted on 11/09/2008 11:15:50 PM PST by wideminded
The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.
But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.
The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.
"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."
The story of the obscure provision underscores what critics in Congress, academia and the legal profession warn are the dangers of the broad authority being exercised by Treasury Secretary Henry M. Paulson Jr. in addressing the financial crisis. Lawmakers are now looking at whether the new notice was introduced to benefit specific banks, as well as whether it inappropriately accelerated bank takeovers.
(Excerpt) Read more at washingtonpost.com ...
Yeah Bush... yeah Paulson... there are no good guys left to cheer.
And they were saying the Iraq war was costly. Now it’s going to look like cheap change.
If a man steals a thousand dollars he breaks the law, if he can steal a billion he can make the law.
a trillion is the new billion
no more small change when it comes to raiding the national treasury
what role will czar paulsen play in the messiah’s regime? waiting to exhale...
wanna bet this wasn’t discussed at the no-records meeting treas has with a number of financial firm ceo’s?
To the banks too large to fail: Over here at Treasury we're going to be gone a few days, so if you need anything, say like a few hundred billion, the key is under the mat.
No playing with the printing presses while we're gone but feel free to use the credit card.
p.s., we'll bring a nice gift home for you, a pair of trick handcuffs so that when you look restrained you can easily escape. Your very, very good friend, Czar Paulsen.
Getting back the money congress forced them to give to NINJAs. People with no income, no job.
Just finished reading an article on Drudge about the Fed handing out over 2 trillion to banks without any transparency.
I truly believe that the people have been sorely mislead about just how bad the financial situation really is. I believe within the next few months the “elite” will not be able to manipulate the stock market any longer and when the truth be known, all hell will break loose.
I’ve pulled about 50% of all my cash out of banks, markets and other investments and will use it as insurance if this scenario plays out. The only downside is if inflation takes off due to the red-hot money printing presses now in operation.
I’ve thought about getting out of stock as the market will crash; but can’t go cash or bonds because the inflation will go nuts.
Looks like gold might be the only option, but my guess is that 0bama is going to stop that by resurrecting the 1933 moratorium on private ownership of gold, and setting a “market price” the government will pay to take it off your hands.
Between environmental restrictions, trial lawyer lawsuits, fat corrupt labor unions, illegal immigration, market disaster, confiscatory tax policies and massive government “redistribution” schemes, it’s not going to be pretty. This is toxic elixir of policies that would destroy the most robust economy.
Gives? You keep using that word. I do not think it means what you think it means.
I only used the word “gives” in part of the title and I was just summarizing the article. The Treasury has apparently changed tax policy in a way that lets banks keep $140 billion that they would otherwise have paid in taxes. Assuming this money has to be made up for elsewhere in the budget, this is a $140 billion hit for the (other) taxpayers. Maybe you could make a case that without this tax break to the banks, the net effect would be even more loss of tax revenue. I don’t know. In any event, it is not good that such a large change was effected so secretly.
Every time I see Henry giving away more money, I can’t help but think he is lining his own pockets.
IIRC he already has something like $500 million. You would think that he would not have to do any more lining.
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