A good number of bills have been introduced this week to distribute blame and respond to the financial crisis triggered by the failure of the government-sponsored home mortgage enterprises.

“Wakerider” legislation – bills that follow the headlines – deserve some skepticism because the time is ripe for political posturing and other silliness, but some of the bills coming forward might be good.

From the posturing department, there’s H.R. 6987. It would require corporate officers of companies to repay their bonuses during years in which their companies are subject to a taxpayer bailout, and the two preceding years as well.

Fine. We get it. Corporate compensation is high. But even the millions and millions paid to corporate executives is an infinitesimal fraction of the losses at stake in the financial crisis.

Maybe the public needs this symbolism, but I’d rather see Congress put its energy into getting its own house in order. It will be spending hundreds of billions of dollars without oversight this week or next (beyond the financial services bailout money) simply because it didn’t follow regular processes for budgeting and allocating its own spending this year.

From the “Hurry! Close the barn door!” department, there’s H.R. 6853 and S. 3547. The House bill would establish a Nationwide Mortgage Fraud Task Force Act in the FBI. The House passed it on Monday. The Senate bill would create a Nationwide Mortgage Fraud Coordinator.

Hmmmm. What about having a “Countrywide” Mortgage Fraud Coordinator to look into the sweetheart mortgage deals some Senators were allegedly getting from that firm? – but that was news a few months ago, wasn’t it. We’ve all forgotten. (Someone hasn’t: S. 3542 was introduced yesterday to require full disclosure of the terms of home mortgages held by Members of Congress.)

From the “Wha’ happan’?” department, there’s H.R. 6990. It would establish an independent Fannie Mae and Freddie Mac Investigative Commission to investigate the officers and directors at Fannie Mae and Freddie Mac responsible and the decisions that led to the enterprises’ financial instability.

If this thing goes, it had better look at the policy – the implied government backing to these behemoths. The ‘public-private partnership’ – so often such a celebrated concept – is why we’re paying such a huge price now. Maybe “public-private” will come to be recognized as “public losses, private profits.”

And from the “This May Make Some Sense” department, there’s H.R. 6986, which would raise the maximum Federal deposit insurance coverage to $200,000. This seems to update the amounts covered by federal deposit insurance not in response to the crisis, but in response to the possibility that it could be needed. Nice to see someone possibly getting ahead of the curve, rather than following along behind it. But I have to say “least bad” is not high praise . . .

This Associated Press article notes what I wrote here yesterday morning about the annual spending process and the October 1 start of the new fiscal year:

If Congress spends $700 billion this week on a financial services bailout, at least we’ll know where that money went. Before the month is out, Congress will spend hundreds of billions more on heaven-knows-what.

The AP says:

The legislation is coming together in a remarkably secretive process in which decisions are concentrated in the hands of just a few lawmakers such as House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and House Appropriations Committee Chairman David Obey, D-Wis. The unusual process means thousands of lawmakers’ pet projects of the very sort blasted by GOP presidential nominee John McCain on the campaign trail would escape scrutiny, including up to $5 billion worth of such “earmarks” in the defense budget alone.

Back to me:

The start of the new fiscal year is not a surprise to anyone, but Congress didn’t follow its own budget and spending processes and has created a spending mess to go along with the financial crisis.

Your Congress. Your representatives. Your crisis fatigue. You’re paying for it. Follow the action here.

No, this is not about the latest energy drink.

The Environmental Protection Agency has decided not to rid drinking water of a toxic rocket fuel ingredient called perchlorate that can be found in public water supplies around the country. The scuttlebutt suggests that the Department of Defense would be seriously on the hook if EPA did go after this chemical.

At least three bills already introduced in Congress go after the perchlorate problem.

S. 24, the Perchlorate Monitoring and Right-to-Know Act would amend the Safe Drinking Water Act to require a health advisory and monitoring of drinking water for perchlorate. Cost: about $0.20 per U.S. family.

S. 150, the Protecting Pregnant Women and Children From Perchlorate Act would simply require a health advisory and drinking water standard for perchlorate. Cost: about $0.04 per U.S. family.

In the House, H.R. 1747, the Safe Drinking Water for Healthy Communities Act, would require a national primary drinking water regulation for perchlorate, the thing the EPA just declined to do. No cost estimate on that yet.

So if you don’t want perchlorate in your drinking water or your pregnant friends, one of these may be bill for you. Here’s the current vote on each. Click to vote, comment, learn more, or edit the wiki articles about the bills.

Of all the threats facing our nation today, you probably weren’t aware of this one: submarines. No, we’re not talking Soviet nuclear subs or German U-boats. These are privately owned and used for transporting drugs.

Not to worry, though, your Congress is on the case, with no less than four – count ‘em four! – bills to get at the submarine scourge.

For example, H.R. 6295 would prohibit “operation by any means or embarking in any submersible or semi-submersible vessel that is without nationality and that is navigating or has navigated into, through or from waters beyond the outer limit of the territorial sea of a single country or a lateral limit of that country’s territorial sea with an adjacent country.”

Thanks goodness! I feel safer already.

S. 3198 does something similar, specifically citing the threat of drug trafficking using submarines.

S. 3351, the Drug Trafficking Interdiction Assistance Act of 2008: same thing using more words – and (more words? yep!) it was introduced by vice presidential candidate Senator Joseph Biden (D-DE).

Rounding out the field is S. 3526, which creates a federal felony for operating or embarking on an international voyage in a submersible or semi-submersible vessel without nationality.

Where do we place the blame for the submarine scourge? Perhaps narco-traffickers, who prey on our children and deserve all the firepower we can lay down in their direction. Perhaps it’s the counter-productive drug war, which we can only win by abandoning. For my part, I blame the Beatles, who came up with the idea of a drug-laden submarine in the first place.

With less than ten days to go before the beginning of the new fiscal year, Congress hasn’t passed a single annual spending bill. Only last week, the second of twelve bills was introduced in the House. Not passed – introduced. The Senate, at least, has seen nine bills introduced, though it hasn’t passed any.

(Follow the annual budget and spending process here.)

Even before the current crisis, Congress was angling to determine spending levels for the 2009 fiscal year in a careless, ad hoc way.

Many of my friends in the government transparency movement focus on earmark reform, and it does represent the flagrant parochialism at play in politics. But earmarks are a small part of federal budget. The problems with government management are far bigger and far deeper.

If Congress spends $700 billion this week on a financial services bailout, at least we’ll know where that money went. Before the month is out, Congress will spend hundreds of billions more on heaven-knows-what.

The start of the new fiscal year is not a surprise to anyone, but Congress didn’t follow its own budget and spending processes and has created a spending mess to go along with the financial crisis.

Your Congress at work. You’re paying for it.

Here’s the WashingtonWatch.com email newsletter for the week. Subscribe here.

email newsletter | tell a friend | wiki | about | home | log in On the WashingtonWatch.com Blog The text of bailout legislation that might pass through Congress this coming week is circulating. It’s discussed in the blog post: “Your Liability for the Bailout: $2,000 – Your Debt: $37,000“ Featured Items This week, the Senate is scheduled to debate H.R. 6049, the Renewable Energy and Job Creation Act of 2008. The bill would amend tax law to renew a variety of expiring provisions, to create incentives for renewable energy investments, and to affect the treatment of income from deferred compensation and the allocation of business interest expenses. Passage of H.R. 6049, the Renewable Energy and Job Creation Act of 2008 would save the average U.S. family a little over $70. The House is scheculed to debate H.R. 5244, the Credit Cardholders’ Bill of Rights Act of 2008. The bill would restrict credit card billing practices, including interest rate changes and calculations of balances to which interest rates are applied. Passage of H.R. 5244, the Credit Cardholders’ Bill of Rights Act of 2008 would cost the average U.S. family a little over a dollar. The House will also debate a “continuing resolution” (not yet introduced) allowing the government to operate after October 1st, even though not a single annual spending bill has yet passed. H.R. 6049 The Renewable Energy and Job Creation Act of 2008 Saves $71.91 per family H.R. 5244 The Credit Cardholders’ Bill of Rights Act of 2008 Costs $1.19 per family What People Think The Renewable Energy and Job Creation Act of 2008 76% For, 24% Against Vote on this Bill The Credit Cardholders’ Bill of Rights Act of 2008 67% For, 33% Against Vote on this Bill Displayed below are new, updated, and passed items with their cost or savings per family. New Items H.R. 6947 The Department of Homeland Security Appropriations Act, 2009 Costs $423.25 per family S. 150 The Protecting Pregnant Women and Children From Perchlorate Act of 2007 Costs $0.04 per family S. 1577 The Patient Safety and Abuse Prevention Act of 2007 Costs $0.17 per family H.R. 3202 The Foreign Service Overseas Pay Equity Act of 2007 Costs $11.07 per family S. 2994 The Great Lakes Legacy Act of 2008 Costs $5.42 per family S. 3109 The Hazardous Waste Electronic Manifest Establishment Act Costs $0.43 per family S. 1070 The Elder Justice Act Costs $5.62 per family S. 3166 A bill to amend the Immigration and Nationality Act to impose criminal penalties on individuals who assist aliens who have engaged in genocide, torture, or extrajudicial killings to enter the United States Costs $0.00 per family H.R. 6899 The Comprehensive American Energy Security and Consumer Protection Act Saves $40.29 per family H.R. 5788 The Halting Airplane Noise to Give Us Peace Act of 2008 Costs $0.00 per family S. 3038 The Improved Adoption Incentives and Relative Guardianship Support Act of 2008 Saves $1.98 per family S. 3270 The National Aeronautics and Space Administration Authorization Act of 2008 Costs $196.78 per family H.R. 6625 The Veteran Voting Support Act Costs $0.00 per family Updated Items H.R. 3999 The National Highway Bridge Reconstruction and Inspection Act of 2007 Costs $8.95 per family H.R. 5235 The Ronald Reagan Centennial Commission Act Costs $0.03 per family Passed Items P.L. 110-318 To amend the Internal Revenue Code of 1986 to restore the Highway Trust Fund balance email newsletter | tell a friend | wiki | about | home | privacy | contact | log in WashingtonWatch.com P.O. Box 77576 Washington, D.C. 20013

[Update: New bailout text is here. Spending under the new language is likely to be roughly the same. See discussion here.]

The text of bailout legislation that might pass through Congress this coming week is circulating on the blogs (and reliable sources too . . .). I’ve taken it and done a little analysis, based on a few assumptions that I will discuss below.

But here’s the punch line: The bailout will cost about $6,500 per U.S. family, a little over $2,000 per person.

The draft legislation would raise the public debt limit to $11.3 trillion dollars. That’s $116,000 per family, or $37,000 per person, in total governmental debt, which is really your debt.

Because this is draft legislation, and my own estimate rather than an official prediction, I will discuss those assumptions a little bit:

The bill would authorize the Secretary of the Treasury to purchase mortgage-related assets, and it would give him $700 billion dollars to work with. It is possible that the federal government will not expend all of those $700 billion, or even make some money back later on the assets it buys in the near term, but I agree with the blogger who called that laughable.

The Resolution Trust Corporation, which was created to clean up the S&L mess, had an estimated cost of about $50 billion in the early years, but wound up costing about $124 billion. So I assume that the $700 billion made available to the Treasury Secretary will be gone.

These are net present value calculations, made using current interest rates and population figures. I’ve treated the spending as occurring over three years, though most authorities in the draft legislation expire in two. It takes time to ramp up and wind down an operation like this, and it’s very hard to estimate when the spending will happen. This matters because future spending is cheaper than current spending. It’s very difficult to estimate costs when the situation is so fluid, but I think these are fair-to-conservative assumptions.

As I said before, there is almost no way that the government can tax this much money out of us directly. The U.S. government’s credit is obviously weakening, making borrowing more difficult. What will probably happen is that the government will inflate the currency by just printing more dollars. This taxes us a different way by making the cash we have worth less. This also imperils the viability of the dollar as a currency. Loss of confidence in the dollar would make this crisis look like a walk in the park.

The bailout is plainly a sop to the financial services companies whose profits were privatized and whose losses will now be socialized. That’s wrong. The proponents of the bailout, which appear to include most of our political leaders, say that it’s needed to prevent further financial catastrophe. Treasury Secretary Henry Paulson says that reforms will follow.

It’s up to you whom you agree with and whom you believe.

A commenter on one bill says:

I’m shocked that no one seems interested in this bill. It has been introduce [sic] several times and has never made it passed subcommittees. If the public were even vaguely informed they would cringe at the idea of eating food grown on fields fertilized with sewage sludge.

The bill is H.R. 215, the Sewage Sludge in Food Production Consumer Notification Act. It was introduced on the first day or so of the current Congress back in January 2007, and nothing has happened with it since.

The bill would treat food as adulterated if it was produced or raised on land on which sewage sludge had been applied (or if animal feed was produced on this sewage-land) unless there was notice to consumers of the food-sludge connection.

Now, I have no clue about whether sewage sludge is bad for production of food. I’ve eaten a lot of stuff that was grown in compost and bugs and worms and their poo and stuff, and that’s not bad for you. But what the heck – as our friendly commenter said, people should at least be interested in this bill! I mean, we’re talking sewage sludge and food! If you’re not even interested, you must be some kind of sewage-eating freak!

So what do you think? Here’s the current vote on H.R. 215, the Sewage Sludge in Food Production Consumer Notification Act. Click to vote, comment, vomit, learn more, or edit the wiki article about the bill.

One of the dumbest bills I’ve seen in a while was introduced in Congress this week. H.R. 6975 would require aliens to attest that they will not advocate installing a Sharia law system in the United States as a condition of their admission to our country.

First, there’s the simple bureaucratic nonsense of administering this thing: We’re going to ask every Christian, Catholic, Zen Buddhist, and Hindu not to advocate traditional Islamic law? What an utterly stupid waste of time. I don’t want a penny of my money going to pay for this.

But more importantly, a law like this communicates precisely the wrong thing to new immigrants and the world at large. It tells the world that we’re a weak, fearful country, and that we believe Sharia law is possible in the United States. It tells the world that we’ve come off our traditional moorings and that we no longer believe in free speech and tolerance of all opinions, no matter how wrong.

Let’s talk substance, just in case one or two of you out there are weak and fearful: There is no possibility – none – that Sharia law will be established in the United States. Not by any government body at any level. This country can stand to have Sharia advocated by whatever tiny minority might want to – without any risk. In fact, allowing such discussion will help dispel whatever small demand there could be for Sharia, because it would be so obviously incompatible with our way of life.

Whoever introduced this bill doesn’t understand our country’s strength or what this great country is all about.

Here’s the current vote on H.R. 6975. Click to vote, comment (expressions of fear, and advocacy of Sharia law welcome!), learn more, or edit the wiki article about the bill.

Reports have it that the U.S. federal government might spend $1 trillion bailing out financial services firms. That’s about $7,750 per U.S. family, or $2,500 per person.

That’s a net present value calculation – the amount of money you would have to put in an interest bearing account today to cover all future expenses. Running this through the WashingtonWatch.com calculator, I assumed payouts would occur over a period of ten years, which may push the estimate a little low.

There’s almost no way that the government can tax that out of us, and instead it will likely inflate the currency significantly to cover this commitment. Watch for a bigger collapse later if the government moves the country’s entire financial system further out on the limb to grab a hold of these imperiled financial services providers.

Oops. Too bad.