Representative Ann Kirkpatrick today pointed to recent announcements by GM and AIG regarding their attempts to return bailout funds as yet more reminders of why Congress should never have approved the efforts in the first place.
GM last week filed for an initial public offering of stock, which is expected to leave almost half of the company still under U.S. government ownership, and AIG said Monday they had paid down $4 billion in loans, leaving them with over $90 billion still under government control. Rep. Kirkpatrick, who has stood up against every single government bailout of corporations and has championed fiscal discipline, argues that there is not nearly enough progress being made to repay Americans what they were forced to invest.
The federal government bankrolled GM with about $50 billion through a combination of loans and purchase of GM stock as part of the auto bailout. This highly-touted offering is likely to sell just 20 percent of its shares. AIG received more than $140 billion in total through the bank bailout from both the Federal Reserve and the Treasury Department. Almost two years after Washington began to support AIG and a year-and-a-half after getting involved with GM, there is still no end in sight to public financing of the two companies - even as we face the growing danger of a record budget deficit and historic federal debt.
"They may be celebrating in GM and AIG's boardrooms, but the taxpayers don't have much to be happy about. We still have tens of billions of dollars at stake in these companies, and we are still months or years away from getting our money back," said Rep. Kirkpatrick. "This is a perfect example of why government shouldn't be bailing out corporations. The executives and Wall Street are back on their feet, but the folks who helped them up are still paying for the consequences of their mistakes."
While GM is starting to post profits again, their gains came at the expense of substantial job losses - and a recent report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found that the government's intervention may have led to thousands of dealerships being unnecessarily closed, putting even more Americans out of work. AIG earned $1.5 billion in profits in the first quarter -- and gave out $100 million in bonuses to executives in February despite their debts.
"The bottom line is that taxpayer money shouldn't be used to reward the big banks and corporate CEOs who helped bring down our economy. That's why I opposed the bailouts from the beginning," said Rep. Kirkpatrick. "We are not going to be satisfied until every single dollar spent on bailouts is returned to the people. GM and AIG should take notice."
The Congresswoman voted against extending and expanding the auto bailout by opposing the failed "Cash for Clunkers" program. She was one of the earliest voices calling for repaid bank bailout money to be used to pay down the debt and co-sponsored the bipartisan Repaying the American Taxpayer Act to put her plan into action. Rep. Kirkpatrick also voted to end the bank bailout early and rededicate all remaining funds to debt reduction, as well as to end government conservatorship of Fannie Mae and Freddie Mac.
The Congresswoman has earned national attention for her efforts to restore fiscal balance. She introduced a bill that would cut congressional pay by five percent, in what would be the first Member salary reduction in 77 years, arguing that Members will be better able to demand the rest of the federal government cut if they first make sacrifices of their own. Rep. Kirkpatrick has also supported measures to re-establish the statutory "pay-as-you-go" requirement for Congress and was part of a bipartisan coalition that fought to give the independent debt and deficit reduction commission the power to get their critical job done. She opposed a $1.9 trillion increase in the debt ceiling, has pushed for deep cuts to government spending for both FY 2010 and FY 2011, and is co-sponsoring a constitutional amendment requiring a balanced budget.