What You Are Writing About

Top concerns from Idahoans for week ending November 21, 2008

Automobile Industry Bailout

Credit Card Industry Practices

Concurrent Disability/Retirement Payments

AIG Bailout Funding

Obama Citizenship

Each year, I hear from thousands of Idahoans who write, e-mail, fax and call my offices to let me know how they feel about issues facing our country today. On average, I receive approximately 1,000 letters and e-mails a week. In recent years, an increasing number of that correspondence has come via electronic means. Even with such a volume of correspondence, I try to respond to each Idahoan as promptly as possible. In an effort to be even more responsive and to fully utilize the technology available through the Internet, this web page features the top five issues of concern from Idahoans and my response on each from the previous week. You may also wish to review information in the Issues Section or details from my Legislative Record, which lists bills I have sponsored and co-sponsored.

 

Automobile Industry Bailout

Many Idahoans have contacted regarding federal government intervention in the American automobile industry.  Ford, General Motors and Chrysler have recently lobbied Congress to provide them with a $25 billion bridge loan because they are rapidly running out of money.  Senate Majority Leader Harry Reid (D–Nevada) attempted to bring this matter before the full Senate for a vote, but significant opposition from Senators prevented any votes from taking place.  At this point, it is likely that the Senate will reconsider this issue in December.   

 

I am opposed to the strategy of providing a $25 billion blank check with no accountability.  If this proposal continues to lack details for an appropriate business plan to curb future problems, I will oppose it, just as I have done with previous bailout packages before the Senate.  The automobile companies need to provide detailed answers to what the problem is, why it exists, what the solution should be, and how that solution fixes the problem.  Spending another $25 billion to delay difficult decisions until February or June is the wrong way to proceed.      

 

Congress has already appropriated $25 billion in funding to the automakers through the Energy Independence and Security Act, passed in December 2007.  This law authorized a program to provide loans to automakers and parts suppliers for the production of fuel-efficient cars and light trucks.  Some Senators have advocated for this loan program to be utilized by the domestic automobile companies as an alternative strategy to addressing this matter. 

Please rest assured that protecting the taxpayer will continue to be my top priority as Congress further considers this and related proposals. 

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Credit Card Industry Practices

There are numerous laws that make up the legal framework which provides for the regulation of credit card issuers.  The Truth in Lending Act (TILA) has the broadest application.  The stated purpose of TILA is to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.”  The law requires written disclosure of such items as the finance charge, which can include interest charges,

finder’s fees, credit loss premiums, and the annual percentage rate, which must be specifically calculated. 

 

The Federal Reserve Board is reviewing TILA to determine whether the regulation needs to be updated.  This particular review is intended to focus on the portions of TILA that address open-ended or credit card type accounts.  The Board will determine what, if any, changes are needed.   I look forward to receiving the Board’s findings and reviewing them with my colleagues on the Senate Banking Committee.

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Concurrent Disability/Retirement Payments

Concurrent receipt of disability compensation and retirement pension has been the issue of much consideration in recent years and continues to be discussed by Members of Congress.  Concurrent receipt allows retired members of the military to receive both retirement pensions from the Department of Defense and disability pay from the Department of Veterans Affairs (VA) for injuries or illnesses incurred or aggravated during active service.  I have consistently supported measures that expand concurrent receipt for retired servicemen.  It is essential that our government fulfill its commitment to care for our nation’s veterans.

I have been a co-sponsor of legislation that would have permitted the concurrent receipt of disability compensation and military retired pay not already permitted under law.  These measures, which unfortunately have not been brought to a vote, did not apply to veterans who retired before completing 20 years of service.  Measures concerning concurrent receipt in the past have not related to those who did not serve 20 years in the military.  Currently, former servicemen who retired early due to a combat related injury can receive a form of concurrent receipt through Combat Related Special Compensation.  However, those who have illness or injury not related to combat, regardless if they incurred the malady while serving in the military, do not qualify for concurrent receipt.

Though I support measures to compensate our veterans, the current fiscal climate in our nation limits our ability to extend concurrent receipt to those who did not complete 20 years of service.  Congress has made important improvements in providing concurrent receipt to veterans in recent years and I hope that we will be able to further extend these benefits in the future as appropriate. 

On January 31, 2007, Senator Harry Reid (D-Nevada) introduced the Retired Pay Restoration Act (S. 439).  This legislation would permit certain retired members of the uniformed services who have a service-connected disability to receive both disability compensation from the Department of Veterans Affairs and either retired pay for their years of military service or Combat-Related Special Compensation.  This legislation was not enacted into law during the 110th Congress and must be reintroduced again in the 111th Congress to be considered further.

The Senate passed similar provisions in the Fiscal Year (FY) 2008 Defense Authorization bill. The provision would authorize veterans rated by the VA as 100 percent disabled and classified unemployable to receive concurrent receipt of retired pay and veterans’ disability compensation.  The payments would be retroactive to December 31, 2004, and will continue throughout FY 2008.     

I share your support for our nation’s veterans and military retirees and have long pressed for increased benefits for those who placed their lives on the line for our country.  Our nation is indebted to those individuals who have served in the Armed Services and it is important that our nation’s troops and veterans know Congress will support their needs.  Please rest assured that I will continue to work with my colleagues in Congress to improve the benefits and programs available to our nation’s veterans and military retirees in a fiscally-responsible manner.

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AIG Bailout Funding

I have heard from a number of Idahoans regarding the American Insurance Group (AIG) and the need for congressional oversight of the financial services industry.  Let me begin by stating that I am not convinced that government intervention in the financial sector to date has adequately protected taxpayers against as yet unknown financial losses, which is why I voted against the $700 billion rescue package.  As a member of the Senate Banking Committee, I have been pushing aggressively for enhanced oversight of this unprecedented government intervention to make sure the taxpayer is being protected while putting our financial system back on solid footing.  However, I am disappointed that the Senate Banking Committee has not held an oversight hearing to determine what sequence of events occurred and what choices were made to place AIG in its current state of affairs. 

 

As to the events directly related to AIG, on September 16, the Treasury Department authorized the Federal Reserve Bank of New York (FRBNY) to lend up to $85 Billion to AIG.  The interest rate on the loan was approximately 11.5 percent and the U.S. government received a 79.9 percent equity interest in the company.  At the same time, AIG’s CEO was fired and replaced. Several weeks later, AIG borrowed an additional $37.8 billion from the FRBNY.  After the federal government intervened, AIG executives embarked on a lavish retreat, which cost $444,000.  AIG claimed that the trip was a reward for top-performing employees which was planned before the government intervened.  Furthermore, on October 17th, the Associated Press reported that AIG executives took part in a hunting trip costing $86,000.  This news came just days after AIG received the second loan from the Federal Reserve Bank of New York. 

 

On November 10, 2008, the Treasury Department announced changes to its AIG intervention plan.  Among other things, the Treasury will purchase $40 billion in newly issued AIG senior preferred stock with funds from the Troubled Asset Relief Program (TARP).  Additionally, the FRBNY will modify the September 16th secured credit facility from $85 billion to $60 billion, extend its duration from three to five years, and change the interest rate from 8.5 percent to 3 percent, among other things. 

These developments provide another example of the need for stronger taxpayer protections when the government intervenes to assist private institutions.  Going on expensive junkets after receiving billions in taxpayer funds to shore up the company is entirely inappropriate.  As we move forward, please rest assured that I will continue to play an active role in determining how we got to this point, what officials did wrong, and what we need to do in the future to make sure that we do not find ourselves in a cycle of massive taxpayer buyouts of troubled financial institutions.  

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Obama Citizenship

Some have raised questions about the eligibility of President-elect Barack Obama (D-Illinois) and Senator John McCain (R-Arizona) for the office of President of the United States.  Having confidence in the electoral process and our public officials is critical to maintaining public confidence in our democracy.  As such, the voters must be confident in the integrity of the electoral process and our electoral institutions. 

 

The Constitution and federal law require that, among other things, only native-born U.S. citizens (or those born abroad, but only to parents who were both American citizens) may be President of the United States.  In President-elect Obama's case, some individuals have filed lawsuits in state and federal courts alleging that he has not proven that he is an American citizen, but each of those lawsuits have been dismissed.  Furthermore, both the Director of Hawaii's Department of Health and the state's Registrar of Vital Statistics recently confirmed that Mr. Obama was born in Honolulu, Hawaii on August 4, 1961, and, as such, meets the constitutional citizenship requirements for the presidency.  If contrary documentation is produced and verified, this matter will necessarily be resolved by the judicial branch of our government under the Constitution.

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