News Review - Bailout Won't Harm Taxpayers: Smith
The Wall Street recovery plan passed Friday by the U.S. House of Representatives and quickly signed into law by President George W. Bush won't end up costing American taxpayers anything, U.S. Sen. Gordon Smith said today.
Speaking outside the Douglas County Courthouse, the Republican senator predicted the nation's financial markets will recover just as they did during the savings and loan crisis in the 1980s and 1990s.
"The U.S. Treasury will buy these assets so low that you will see a market rebound. Everything that goes down will go up. And just as happened in the S&L crisis, the taxpayer got every dime back and they will get every dime back this time, as well," Smith told a crowd of about 40 people, including county officials, workers and others.
Smith applauded the action of the House to leave intact modifications made to the bailout bill to include a four-year, $3.2 million extension of the timber safety net, tax extender incentives for renewable energy and provisions for mental health parity.
"This is not about bailing out Wall Street. This is about protecting Main Street. This is about your 401(k), your (Public Employees Retirement Account), your savings account, your car loan, your farm loan, your payroll. This is about student loans. This is about saving the financial system in this country," Smith said.
Smith praised the actions of Douglas County Commissioners Doug Robertson and Joe Laurance in working to secure the safety net extension. Robertson has been a national leader on the safety net program since the original legislation passed in 2000. Laurance traveled to Washington, D.C., twice to lobby legislators as part of a push by the National Forest Counties and Schools Coalition.
"This is a lifeline to rural America and to Douglas County," Smith said.
The House passed the legislation by a 263-171 vote. Rep. Peter DeFazio, D-Springfield, voted against it. Democratic Sen. Ron Wyden voted against the Senate version on Wednesday.
Smith criticized Jeff Merkley, his opponent in the Nov. 4 election, for coming out against the bill only after Wyden voted against it. He also pointed to Merkley's challenge for the winner of the race to pledge to hold town hall meetings annually in Oregon's 36 counties, as Wyden has done.
Smith said he already travels to each county at least once a year, although he might not hold formal town halls. Effective representation takes more than just showing up.
"Let me make really clear what rural Oregon needs. They don't need a visitor. They need a voice and a vote. When it got tough, what Jeff Merkley did was stick his finger in the air to see which way the wind was blowing and put his political interests against the interests of your financial security and against the interest of Douglas County. Let there be no doubt, this was decision time," Smith said.
Merkley released a statement saying the bailout does not protect consumers or taxpayers and doesn't hold Wall Street accountable.
"For his entire career, Gordon Smith has stood with those on Wall Street who created this crisis. He stood with them to remove accountability and oversight of financial institutions. He stood with them to pass tax giveaways for special interests. And he stood with them again this week," Merkley said.
The bailout, Merkley said, will force taxpayers to bail out foreign banks and allow Wall Street executives to walk away with millions of dollars in their pockets.
The county expects to receive about $24.7 million in Oregon & California Railroad forest payments in October, with $14.4 million in U.S. Forest Service payments the following month. The rest of the $52 million will go to the state school fund and be used for forest improvement projects.
Robertson and Laurance said the county will continue to operate on a $35.4 million general fund budget, $8.4 million less than in the fiscal year that ended June 30.
The county will repay the $27 million taken out of the county's $100 million reserve fund to prevent more drastic cuts. The county will add additional money to the reserve fund in coming years, Robertson said.
Robertson said he expects the payments from the four-year reauthorization, which will provide $740 million to Oregon counties, may be the last from the program. Wyden, who authored the extension bill, said he remains hopeful it could be extended again.