April 24, 2014

Bush Tax Break for Bankers Would End With Stimulus Package

We know that TARP, aka Bailout, funds helped PNC Bank acquire Cleveland’s National City Bank.  Did you know that PNC will also get a tax break out of the deal?

Several months ago, it seems the Bush Administration created a tax break which allows the healthy banks that acquire troubled banks to write down healthy portions of the troubled banks assets when figuring their tax bills.  It’s such a great deal that some banks are netting money – PNC is expected to net $5.1 billion more in tax breaks than it paid for PNC’s assets.

Let me see if I get this … A healthy bank gets free government money in the form of drastically reduced tax liability – even if it is healthy and doesn’t need it.

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Mary Jo Kilroy’s Committee Assignment Puts Her in Center of Economic Recovery Efforts

kilroyFreshman U.S. Rep. Mary Jo Kilroy has gotten a seat on the high profile House Committee on Financial Services chaired by Massachussetts Rep. Barney Frank.

Frank’s committee has taken center stage in combating the U.S. financial crisis.  The much and rightfully maligned Troubled Assets Relief Program, aka, $700 billion bailout, originated in Financial Services.  Frank also pushed for a bailout of the U.S. auto industry, but Senate Republicans killed that effort until the Bush Administration stepped in with $17 billion for GM and Chrysler late last month.

Kilroy and her fellow Congressional Democrats will be in a unique position very soon after President-elect Barack Obama takes office in a couple of weeks.  The original bailout bill called for $350 billion of the $700 billion total to be disbursed by the U.S. Department of the Treasury, led by Treasury Secretary Henry Paulson.  Paulson has been roundly criticized for the money not serving the purpose for which Congress intended – unlocking frozen capital markets.  The Government Accountability Office and an oversight arm of the committee which Kilroy now serves found several problems with how the money has been disbursed, chief among them accountability.  Bailout dollars have been used to pay out executive bonuses, sit as cash holdings and used by some banks to acquire others.

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Where Is All the Bailout Money Going? Banks Aren’t Telling …

The other day the Associated Press asked 21 banks who took in billions in U.S. taxpayer provided federal bailout money four questions:

  1. How much of the money take has been spent?
  2. What was it spent on?
  3. How much is being held in savings?
  4. What’s the plan for the rest.

Silence.  Here’s hoping that the New Year brings a Congress and Adminstration willing to force some transparency out of these corporate welfare cases and hold them accountable for real results and sound business practices.  In the meantime, we’ve got Cramer:

Jim Cramer Goes Ballistic on Bailed Out Banks

Text: Henry Paulson Testimony before House Financial Services Committee | November 18, 2008

(Source: U.S. Treasury Department)

Click this link for PDF of Sec. Paulson’s Testimony

Transcript: President-Elect Barack Obama and Michelle Obama on ’60 Minutes’ | November 16

(Source: CBS News)

(Narration) Steve Kroft:Since Barack Obama was elected the 44th president of the United States 12 days ago, he has largely remained out of sight, getting high-level government briefings and conferring with his transition team. But he surfaced on Friday afternoon in Chicago, alongside his wife Michelle to give 60 Minutes his first post-election interview.

It covers a wide range of subjects including the economy, the ailing automobile industry, the government’s $700 billion bailout program, their visit to the White House, the emotions of election night and the quest for a family dog. You’ll hear all of it. But we begin with the president-elect and his thoughts about the new job.

Steve Kroft: So here we are.

President-elect Barack Obama: Here we are.

Kroft: How’s your life changed in the last ten days?

Mr. Obama: Well, I tell you what, there seem to be more people hovering around me. That’s for sure. And, on the other hand, I’m sleeping in my own bed over the last ten days, which is quite a treat. Michelle always wakes up earlier than I do. So listen to her roaming around and having the girls come in and, you know, jump in your bed. It’s a great feeling. Yeah. [Read more...]