News
Residents react to fed bailout
Thelma Grimes/San Pedro Valley News-Sun
Before Congress voted once last week to defeat the proposed $700 billion bailout of Wall Street, and then on Friday voted to approve it, U.S. Rep. Gabrielle Giffords, D-Ariz., (Congressional District 8) received an unprecedented 2,500 calls and emails from constituents wanting to weigh in on the controversial issue.
The proposed cost of the bailout is more than the $608 billion spent per year on the Social Security program, and according to the U.S. Census Bureau's estimate, every American would have to spend $2,300 to pay the $700 billion debt.
In the sports world, it would take 25,000 baseball players making the same $28 million yearly salary as New York Yankees third baseman Alex Rodriguez to pay the bailout cost.
C.J. Karamargin, Giffords' communications director, said District 8 received numerous calls in their Tucson, Sierra Vista and Washington offices over the last few weeks.
"This high level of contacts is unprecedented," Karamargin said. "The majority of calls and emails were opposed to the legislation that was considered by the House. Many of those who supported the legislation insisted on strict oversight and tough regulation."
Before Friday's vote, Karamargin said Congresswoman Giffords was very concerned about the economy, and wanted Congress to take up financial recovery legislation as soon as possible, but wanted a proposal with tighter language about how taxpayers can recoup the money the treasury department is planning to lend to "troubled financial institutions."
While members of Wall Street shouted messages such as "Congress should be put in jail," last Monday after the first bill was defeated by the House, Julia Robinson of J-Six said the bailout is probably necessary, but is a very bitter pill to swallow.
"This is the result of unbridled, unchecked capitalism," she said. "What I most resent is the privatization of profits and the socialization of losses, they win, and we lose."
Robinson said she was glad the bill failed in the first round, but expected another proposal to be passed sooner rather than later, noting she would like to see some heavy strings attached.
Karamargin said Giffords voted against the first bill because in her view, the legislation was not strong enough in guaranteeing that taxpayers will get their money back. The congresswoman also wants to see stronger language about CEO compensation, a critical issue to the Congresswoman's office.
In approving the second bill on Friday, Giffords praised the move to increase federal deposit insurance and extend solar tax credits. The new bill is said to include provisions to increase the federal insurance caps for bank and credit union accounts and extend tax credits for renewable sources of energy like solar.
Giffords' Republican opponent Tim Bee criticized her rejection of the original bill last Monday, and then for approving Friday's bill with the solar energy stipulations.
"Our Congresswoman wouldn't stand by and say no to the pork," Bee said. "She added her own. I support the extension of solar credits. These credits are important, but can pass on their own without bailing out Wall Street. Her vote to roll over taxpayers was bought with tax credits that a real leader would have passed months ago as part of an all of the above energy package."
The $700 billion bail out approved includes provisions to temporarily increase coverage for individuals' bank accounts to $250,000 by the Federal Deposit Insurance Corporation and National Credit Union Share Insurance Fund. For the last 28 years, the FDIC has insured individuals' de-posits up to $100,000.
"Increasing this cap will restore confidence in our financial institutions and help small businesses and community banks," Giffords said. "With a higher cap, individuals will be encouraged to keep their hard-earned money in our community banks where it contributes to the growth and stability of our local economy."
Michael Hannley, President and CEO of the Bank of Tucson said the FDIC insurance provision is a good addition to the final bill.
"People are concerned about the security of their bank deposits," he said. "This increase in FDIC coverage will reassure the public that their money is safe and secure. It will also be extremely helpful to small businesses whose cash flow needs are higher than the current FDIC coverage. This is a great improvement to the financial rescue legislation."
Despite lawmakers and others praising the passage of the bailout plan, CNN and other media polls showed last week that Americans were overwhelmingly against it.
Economists, however, have said the crisis facing the nation will impact all citizens, especially when it comes to banks having the ability to give loans to citizens looking to buy a home or even a car.
Robert Carreira, director of the Cochise College Center for Economic Research, said a negative outcome of Congress's failing to approve the bailout would have meant even further tightening of the credit market.
"This is because investment in financial institutions would be viewed as riskier than in the past," he said. "The current crisis, if not addressed, will result in less money being available for lending. The result will be higher interest rates and higher qualification standards to borrow. This isn't necessarily a bad thing. When interest rates were low and the banking system was flooded with money to lend, the result was a lowering of standards. The predictable outcome was that loans were granted to those more likely to default, and default they did."
Carreira said many residents treat the current crisis as if it is a black and white issue.
"Either financial institutions are bailed out and we can continue to borrow money; or there is not bailout and financiers will take their money and go home. The latter scenario would, of course, have a devastating impact on the economy. Such a scenario, however, seems unlikely."
The economic crisis is not just a concern for residents and lawmakers, but also school officials and Arizona lawmakers.
David Woodall, superintendent of the Benson School District, said he is concerned about the federal government, but primarily with the state budget. School administrators remain worried that the federal crisis is going to trickle down to the state level and impact schools even more than they already have been.
"The national economy is bad but Arizona's is worse," Woodall said. "The national economy is failing because of the collapse of the mortgage and related home construction industry. Although this impacts each state, the mortgage and home construction industry represented all of Arizona's boom. So Arizona has been hit particularly hard with a deficit running at about $100 million a month.
"Last year saw schools lose their building renewal funds which are utilized to maintain building and replace key equipment and operation systems. In Benson this represents a loss of $200,000 per year - we expect this reduction to continue with possible loss of soft capital funds which fund all student equipment and textbooks. In addition there is discussion of legislative efforts to reduce the 2 percent inflation factor schools receive to address inflationary costs and salary increases."
Woodall said all the district can do now is be fiscally conservative in waiting to find out what programs will be cut by the federal and state governments.
"Our challenge is to continue providing a quality education for our kids and maintain our programs and activities with less money," he said.
Arizona lawmakers are in tough shape, facing a $1 billion shortfall this year, and expecting an even bigger problem in 2009 and 2010.
(Published Oct. 8. 2008)
Before Congress voted once last week to defeat the proposed $700 billion bailout of Wall Street, and then on Friday voted to approve it, U.S. Rep. Gabrielle Giffords, D-Ariz., (Congressional District 8) received an unprecedented 2,500 calls and emails from constituents wanting to weigh in on the controversial issue.
The proposed cost of the bailout is more than the $608 billion spent per year on the Social Security program, and according to the U.S. Census Bureau's estimate, every American would have to spend $2,300 to pay the $700 billion debt.
In the sports world, it would take 25,000 baseball players making the same $28 million yearly salary as New York Yankees third baseman Alex Rodriguez to pay the bailout cost.
C.J. Karamargin, Giffords' communications director, said District 8 received numerous calls in their Tucson, Sierra Vista and Washington offices over the last few weeks.
"This high level of contacts is unprecedented," Karamargin said. "The majority of calls and emails were opposed to the legislation that was considered by the House. Many of those who supported the legislation insisted on strict oversight and tough regulation."
Before Friday's vote, Karamargin said Congresswoman Giffords was very concerned about the economy, and wanted Congress to take up financial recovery legislation as soon as possible, but wanted a proposal with tighter language about how taxpayers can recoup the money the treasury department is planning to lend to "troubled financial institutions."
While members of Wall Street shouted messages such as "Congress should be put in jail," last Monday after the first bill was defeated by the House, Julia Robinson of J-Six said the bailout is probably necessary, but is a very bitter pill to swallow.
"This is the result of unbridled, unchecked capitalism," she said. "What I most resent is the privatization of profits and the socialization of losses, they win, and we lose."
Robinson said she was glad the bill failed in the first round, but expected another proposal to be passed sooner rather than later, noting she would like to see some heavy strings attached.
Karamargin said Giffords voted against the first bill because in her view, the legislation was not strong enough in guaranteeing that taxpayers will get their money back. The congresswoman also wants to see stronger language about CEO compensation, a critical issue to the Congresswoman's office.
In approving the second bill on Friday, Giffords praised the move to increase federal deposit insurance and extend solar tax credits. The new bill is said to include provisions to increase the federal insurance caps for bank and credit union accounts and extend tax credits for renewable sources of energy like solar.
Giffords' Republican opponent Tim Bee criticized her rejection of the original bill last Monday, and then for approving Friday's bill with the solar energy stipulations.
"Our Congresswoman wouldn't stand by and say no to the pork," Bee said. "She added her own. I support the extension of solar credits. These credits are important, but can pass on their own without bailing out Wall Street. Her vote to roll over taxpayers was bought with tax credits that a real leader would have passed months ago as part of an all of the above energy package."
The $700 billion bail out approved includes provisions to temporarily increase coverage for individuals' bank accounts to $250,000 by the Federal Deposit Insurance Corporation and National Credit Union Share Insurance Fund. For the last 28 years, the FDIC has insured individuals' de-posits up to $100,000.
"Increasing this cap will restore confidence in our financial institutions and help small businesses and community banks," Giffords said. "With a higher cap, individuals will be encouraged to keep their hard-earned money in our community banks where it contributes to the growth and stability of our local economy."
Michael Hannley, President and CEO of the Bank of Tucson said the FDIC insurance provision is a good addition to the final bill.
"People are concerned about the security of their bank deposits," he said. "This increase in FDIC coverage will reassure the public that their money is safe and secure. It will also be extremely helpful to small businesses whose cash flow needs are higher than the current FDIC coverage. This is a great improvement to the financial rescue legislation."
Despite lawmakers and others praising the passage of the bailout plan, CNN and other media polls showed last week that Americans were overwhelmingly against it.
Economists, however, have said the crisis facing the nation will impact all citizens, especially when it comes to banks having the ability to give loans to citizens looking to buy a home or even a car.
Robert Carreira, director of the Cochise College Center for Economic Research, said a negative outcome of Congress's failing to approve the bailout would have meant even further tightening of the credit market.
"This is because investment in financial institutions would be viewed as riskier than in the past," he said. "The current crisis, if not addressed, will result in less money being available for lending. The result will be higher interest rates and higher qualification standards to borrow. This isn't necessarily a bad thing. When interest rates were low and the banking system was flooded with money to lend, the result was a lowering of standards. The predictable outcome was that loans were granted to those more likely to default, and default they did."
Carreira said many residents treat the current crisis as if it is a black and white issue.
"Either financial institutions are bailed out and we can continue to borrow money; or there is not bailout and financiers will take their money and go home. The latter scenario would, of course, have a devastating impact on the economy. Such a scenario, however, seems unlikely."
The economic crisis is not just a concern for residents and lawmakers, but also school officials and Arizona lawmakers.
David Woodall, superintendent of the Benson School District, said he is concerned about the federal government, but primarily with the state budget. School administrators remain worried that the federal crisis is going to trickle down to the state level and impact schools even more than they already have been.
"The national economy is bad but Arizona's is worse," Woodall said. "The national economy is failing because of the collapse of the mortgage and related home construction industry. Although this impacts each state, the mortgage and home construction industry represented all of Arizona's boom. So Arizona has been hit particularly hard with a deficit running at about $100 million a month.
"Last year saw schools lose their building renewal funds which are utilized to maintain building and replace key equipment and operation systems. In Benson this represents a loss of $200,000 per year - we expect this reduction to continue with possible loss of soft capital funds which fund all student equipment and textbooks. In addition there is discussion of legislative efforts to reduce the 2 percent inflation factor schools receive to address inflationary costs and salary increases."
Woodall said all the district can do now is be fiscally conservative in waiting to find out what programs will be cut by the federal and state governments.
"Our challenge is to continue providing a quality education for our kids and maintain our programs and activities with less money," he said.
Arizona lawmakers are in tough shape, facing a $1 billion shortfall this year, and expecting an even bigger problem in 2009 and 2010.
(Published Oct. 8. 2008)
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