Friday, December 12, 2008

~U.S. Senator Tom Coburn
by Steve Fair
“If I lose an election because I did the right thing- fine,” U.S. Senator Tom Coburn, R-OK, said on Friday morning during a blogger news conference. “The problem in Washington is that we have career politicians who don’t get it,” Coburn continued. “They have no perspective outside of politics.”

Responding to a variety of questions from selected bloggers throughout the United States, Coburn said he projected the Gross Domestic Product will be down 5% in the 4th quarter. The Senator stated next year’s federal budget deficit will be 1.6 trillion dollars. Current estimates of the total budget are 2.9 trillion, which is an 8% increase over the previous year. If the budget deficit is more than 50% of the total budget, it will be the first time since 1945 that has happened.

“I want to give you a tasting of the stupidity that goes on in Washington,” Coburn said. “We have a multitude of empty federal buildings that are not being used, yet we can’t sell them.” “The maintenance costs on those buildings alone is $5-6 billion annually,” Coburn exclaimed. “Are you aware that less than one percent of federal agencies has a metric that measures their effectiveness?” Coburn asked.

Coburn outlined three things that would trim 25% of the expected deficit. First, he proposed that all federal agencies take a 10% cut in their budget next year. “That would save $160 billion dollars.” “They know it’s there and they can do it, but they won’t willingly,” Coburn said. Second 350 billion could be saved on the waste that is in government every year. Third, the Senator said up to eliminating earmarks could save $25 billion.

When asked about the failure of last night’s Big Three bailout bill, Coburn said he did not blame the United Auto Workers. “They did not get them into this mess.” “The car companies got here because they had management in place who was unwilling to risk a strike on their watch,” Coburn said. “Last night’s bill failure was solely because the UAW was unwilling to come to the table and give us a timeline on when they would be wage competitive.” When asked if using the Bank Bailout monies to help the automakers would be a good idea, Coburn said, “It would be a giant mistake.” “You would set a precedence and then every industry or company that is in trouble would expect government help.” “Pilgrims Pride, the countries largest chicken processor, just filed bankruptcy.” “If we help the one industry, then we would have to help all of them,” Coburn said.

Calling the Community Reinvestment Act, “social engineering,” Coburn said it forced banks and lending institutions to make loans they knew were risky and not good business. “But what are you to do, when the bank examiner is threatening to pull your charter if you aren’t compliant with the CRA,” Coburn asked.

When asked by a blogger how Americans can change Washington, Coburn’s passion bubbled to the surface. “We need a different farm team,” he said. “We need to recruit people who get it.” “We need people who are not career politicians and who have the character, integrity and guts to make tough decisions and take tough stands,” Coburn said. When their constituents call elected officials into account that is a powerful tool according to Coburn. “I do a lot of town meetings and when you are questioned in front of 150 people about a vote you made and you have to justify the way you voted, it will make you think when you go back to vote,” Coburn said. “Shame is a powerful tool.”

Coburn said we need citizen legislators and should not be looking to career politicians to fix our countries problems. “What can you do?” “In everything you do, you can put out a clarion call that Americans can change Washington, but they have to do it by sending a different type of person to represent them,” Coburn concluded.

Coburn’s candor is refreshing in politics. So often we have politicians tell us what we want to hear so they can get our vote. Coburn is bluntly honest and his “I don’t care if I stay up here or not” attitude is what makes him so effective and irritating to members of the Senate in both parties. Because of his resolve, it’s critical we implore him to serve another term in the Senate. He is the one member of Congress who could change Washington for the better.


gandalf43 said...

What evidence do you have of a bank examiner(s) threatening to pull a bank's charter if you aren't compliant with the CRA?

Steve Fair is a Jelly Salesman. said...

Thanks for your comment. I was quoting Senator Coburn, but it's a fact that banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don’t comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost large corporations billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

Consequently, banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as “subprime” loans. In order to compensate themselves for the added risk of extending these loans, many lenders have increased the lending fees associated with mortgage loans. This is simply an indirect way of doing what banks always do – and what they must do to remain solvent: charging effectively higher rates of interest on riskier loans.

Here are three links to articles about the CRA- two against it and one pro written just last week.

Thanks for reading the blog and for your comments.


gandalf43 said...

Where is the evidence that the loans in default and foreclosure were made as a result of the enactment of CRA?

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