Rep Cmte Financial Services

Bachus Response to Chairman Frank's Argument That Bailout Burdens be "Borne by the Taxpayers" But Not Wall Street Banks


"We've come to the core issue of this conference, and that is - who pays? If we're going to bail out someone, does Wall Street pay?  Or do the American people pay? That's the question."

June 24, 2010


- Financial Services Committee Ranking Member Spencer Bachus today made the following statement during the so-called "Wall Street Reform" conference upon hearing "concerns" from Chairman Barney Frank and other Democrats that a Republican amendment would transfer the responsibility of bailout costs from the American taxpayer to Wall Street banks. 


During the course of today's negotiations, Chairman Frank argued on behalf of the Wall Street mega-banks, saying they fear the amendment may be "cost shifting to them...costs that were currently to be borne by the taxpayers" and that he thinks "that's a legitimate concern."


Rep. Mel Watt (D-N.C.) said that he, too, had been contacted by the major financial institutions concerned about the costs shifting from taxpayers to Wall Street firms, and that it must be made clear the financial institutions will not be on the hook for bailing out the mortgage giants. 

Below is a partial transcript of Bachus' response: 

"Mr. Chairman, I think finally this debate has crystallized. And I think we've come to the core issue of this conference. And that is who pays?  I see this as if we're going to bail out someone, does Wall Street pay?  Or do the American people pay? That's the question.

"Now, for two or three weeks if not two or three months, what the American public has heard from my Democratic colleagues is that Wall Street ought to pay.  Now, all of a sudden today, you're doing a 180.  When Mr. Hensarling offers an amendment that says the taxpayer shouldn't have to pay, it's all of a sudden they're no longer the "big Wall Street" banks.  All of a sudden they're "financial institutions which have concerns" because they might have to fund a bailout.

"I thought for two months the message the American people were hearing is we're not going to put this on the backs of the taxpayers.  The large financial institutions, or Wall Street -- you've used that term -- they ought to pay. So that's what this amendment is all about.

"You've accused us of defending Wall Street.  What are you doing now? It's the largest bailout of them all.  What are you doing now?  You're saying they shouldn't have to pay.

"Who sold Fannie Mae and Freddie these mortgages? Was it the American people? Was it the taxpayer?  I don't think it was....Now, if that's true, should the taxpayers have to pay? I would say no. If you're going to defend the mega-financial institutions who have called you this week and told you don't put this on us, then go ahead and do it.  But the American people are going to figure out that with the biggest bailout of all, by far -- and Mr. Garrett has demonstrated several times this week -- that this is a $1 trillion obligation.  If you want to put it on the American people, do it.  If you want to assure your friends on Wall Street that you won't do anything to hurt them, that you'll send this bill to the taxpayers, then do it.  

"I mean, now's the moment of truth.  And the ball is in your court.  We have consistently said if you're going to design a bailout system, you're not going to put it on the taxpayer."