I usually don’t enjoy watching congressional hearings.
They are often packed with blustering, long-winded, self-serving speeches that are nap-inducing.
But a recent hearing before the domestic policy subcommittee of the House Oversight and Government Reform Committee was riveting. In part, it was because of remarks by Rep. Elijah Cummings, D-Md.
The subject of the hearing was whether the Treasury Department was using bailout funds to increase foreclosure prevention, as Congress intended.
It was Cummings’ questioning of Neel Kashkari, the interim assistant Treasury secretary for financial stability, that had me hollering.
I loved the Cummings tirade so much that I immediately began taping the session as it aired on C-SPAN. I’ve since viewed it a couple more times. You can also watch a video of the tirade on The Herald’s Web site, www.heraldnet.com. Click on this column.
During the hearing, Cummings said what I’ve been feeling for months.
In straight-from-the-‘hood vernacular, Cummings captured what has been done to American taxpayers.
“Mr. Kashkari, in the neighborhood I grew up in, in the inner city of Baltimore, one of the things that you tried to do was make sure that you were not considered a chump,” Cummings said. “And what ‘chump’ meant was that you didn’t want people to see you as just somebody they could get over on.”
Without a doubt, corporate America is playing us like chumps. Treasury Secretary Henry Paulson and the folks he’s assembled to try to get us out of the economic tempest are being played like chumps.
Exhibit A: American International Group.
AIG, the insurance giant, was initially saved from impending failure by an $85 billion loan. Then we hear AIG sponsored a lavish junket at a swank hotel after the infusion of government money — our money.
Most recently, AIG said in its quarterly filing that it would allow employees to collect $503 million in deferred compensation.
“I’m just wondering, do you all say to yourself, ‘Boy, this doesn’t look too good’?” the congressman asked. “I mean, does that go through your head or is it just me? Am I missing something?”
While it’s true the funds AIG wants to release is money its employees have earned, the timing and appearance are horrible.
“I’m just wondering how you feel about an AIG giving $503 million worth of bonuses out of one hand, and accepting $154 billion from hardworking taxpayers,” Cummings, getting visibly agitated, asked Kashkari.
But it’s not just about AIG, Cummings said. More companies are lined up to get a government handout.
Will they be thinking, “Is Kashkari a chump?” Cummings asked.
Kashkari explained AIG’s compensation decision, although he said he was not defending the company’s actions. He testified he was told by his staff that the money was going to be released as an incentive to retain certain AIG employees.
“We need them to keep working, so that they can sell off the assets and pay back the taxpayers,” Kashkari said.
To which Cummings responded: “We need them to keep working, but guess what? There are a whole lot of people that could replace them, because there are so many people losing their jobs. … I guarantee you there are people who are lined up saying, ‘Please quit so I can get a job!’ “
I hollered again.
There’s no question that we, Treasury and Kashkari are being chumped. And it’s not just by AIG.
Originally, Paulson pleaded for the $700 billion bailout money to buy up troubled mortgage assets. But Paulson said Treasury realized this wasn’t going to help fast enough, so it instead decided to pump money into banks and other financial institutions. However, we’ve learned that some of the bailout money can be used by companies to buy competitors.
Now Treasury wants to give some of the bailout funds to credit card companies to help get credit flowing again.
That is definitely a chump move.
It’s ridiculous to give money to companies that for years have been collecting double-digit interest rates on card purchases. That is on top of previous years of record earnings that included revenue from fees when customers went over their limits or paid late.
It’s ridiculous when not enough is being done to directly help individuals who are losing their jobs and their homes.
Just this week, the National Foundation for Credit Counseling (NFCC) reported that the calls for housing guidance it is getting are setting new records each week. The most recent data show those requests up 63 percent year over year.
And an increasing number of consumers taking NFCC’s Mortgage Reality Check are falling into the red danger zone, indicating they are in imminent risk of foreclosure. The self-assessment test, which determines one’s risk of foreclosure, is located at www.HousingHelpNow.org.
What was so great about Cummings’ questioning was that he called on Kashkari and others in Treasury to stop acting so desperate to help the economy that they just throw money at companies.
We can’t “afford to be chumps,” Cummings said. “We can’t afford it!”
Washington Post Writers Group
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