Unlike some in Congress, I took the time to read the House version of the proposed bailout of Wall Street. It failed and I believe that was the right thing.
In Section 118 of the House bill under “funding” the bill said “the Secretary [of Treasury] may use any authority granted under Section 31 of Title 31 of the US Code to fund the bailout.”
I “Googled” “Title 31, Section 31 of the US Code” and came up with how the government funds itself. But, included in that Title 31, Section 31 was a provision for the Secretary of the Treasury to issue obligations equal to the monthly payments needed under Title II of the Social Security Act.
So I “Googled” “Title II of the Social Security Act” and it seems those are the payments to the elderly recipients of such funds, among other things.
Secretary Paulson apparently could have deemed the monthly obligations payable under Title II of the Social Security Act to be those obligations which fund the bailout.
Wait a minute! So one guy in Washington who spent his whole career on Wall Street could just up and declare the payments to be made under Social Security to be the payments made for the purchase of bad debts from his former colleagues on Wall Street?
Here’s the kicker! The obligations declared for and issued by the Secretary for the bailout are deemed appropriated as soon as the Secretary makes a purchase of the bad debt. And the obligations issued to make monthly Title II Social Security payments are deemed, as a matter of law, to not be part of the debt limit.
And the reverse kicker! The whole deal is done where there is limited review under the law; it’s off-the-books and transfers billions from Social Security to Wall Street. Enron, anyone?
So, the bill that a bunch of far right wing House ideologues shot down was the last gasp of George W. Bush’s efforts to privatize Social Security! Or, if my analysis is wrong, they just made their dying last stand against the tide which will wash out of the Congress the last of the truly bitter partisans which have held our nation hostage. Either way, America wins.