Congress Demands a Blank Check for Bailout

With all the sweeteners, the bailout could pass, but its opponents should hold firm.

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When talk of the bailout first began last week, lawmakers insisted they wouldn't simply hand a "blank check" to the Treasury Department. But now that's what Congress wants from Treasury.

To win enough votes for passage, negotiators for the $700 billion bailout are now adding $120 billion more in "sweeteners." Some of these—like ensuring mental health problems receive better coverage from insurance companies—have absolutely nothing to do with market priming. Others are only tangentially related. Among the latter are hurricane tax relief, modest alternative minimum tax reform, more subsidies for renewable energies, and tax exemptions for businesses.

On their own, some of these sweeteners aren't half bad. I'm certainly not one to oppose tax breaks, for example. (Al Regnery, publisher of the American Spectator, once wrote that a tax cut is a lot like sex—even when it's not that good, it's still good.)

But if the goal is to make the legislation more palatable, shouldn't the enhancements at least have something to do with that legislation? The current sweeteners amount to little more than unrelated bribes for lawmakers to go along with what only a few days ago was deemed an unacceptable bill. As Rep. Joe Barton, a Texas Republican, noted, "The bill they are going to send back is the same bill that I voted against two days ago. Why would I turn around and vote for it?"

Regardless, the add-ons appear to be working, and it seems the bailout will pass in some form this time around. My only wish is that lawmakers who were so dead set on principle the first time wouldn't be distracted by these bauble bribes and instead demanded the full dismantlement of the vehicles that brought us here. Namely, Fannie Mae and Freddie Mac.

Incidentally, for those who are genuinely flummoxed as to how anyone could oppose the bailout, check out Harvard economist Jeffrey Miron's piece over at CNN. It's respectably and respectfully argued and raises a lot of good issues.