BREAKING NEWS: Republicans Speak Out Against “The Blank Check Act”

The Republican Caucus held a press conference at 5:00pm PST, outlining the party’s grievances with the Authority for System Significant Financial Companies Act of 2009. In their press conference, Senate Minority Leader Mitch McConnell (R-KY) stood before a large group of united Republicans on the steps of the Capitol and delivered a passionate statement calling for support against the “Blank Check Act.”

The act is an effort by the Democratic Party to ease the economic crisis that has ripped through the financial services industry over the past few months. In a statement issued by Secretary of the Treasury Timothy Geithner, the Democrats remark that the US government needs additional authority to handle a financial collapse on the scale of the AIG or Lehman Brothers. The Democratic statement observes that the government only has two options in the current environment: 1). Give the struggling financial firm funds; 2). Allow the firm to fail. In the statement, the Democrats mention that “those options do not provide the government with the necessary tools to manage the resolution of the firm efficiently and effectively in a manner that limits the systemic risk with the least cost to the taxpayer.”

As a solution to the current situation, the Authority for System Significant Financial Companies Act of 2009 would give the government the power to put the firm into a conservatorship or receivership the government decided to reorganize or liquidate of the firm. The act would further reduce the burden on taxpayers by giving the government the ability to pay off a company’s debt obligations through the sale of assets.

According to the statement attached to the act, the proposed legislation would be financed by the government’s ability to liquidate firm’s assets. Any additional funding would come from the FDIC, ex-ante or ex-post taxation.

The Republican caucus firmly opposes this legislation because it effectively gives the government a “blank check” and unregulated authority when dealing with struggling financial institutions. Senator McConnell remarked that the act gave the government “unprecedented and irresponsible” levels of power. McConnell observed that the act would effectively give the government a blank check in bailing out non-bank financial firms, without any mention of where the funds would be appropriated from.

Senator Grassley (R-IA) was most especially concerned with the bill’s provision that gives the government the ability to seize power of an organization for 30 days without any regard for the shareholders of the company. Grassley remarked that this effectively gives the government the ability to do whatever they want with a company without regulation or oversight.

Finally, Senator Specter (R-PA) drew on his experience as a former prosecutor and took issue with the constitutionality of the potential for ex-post-facto taxation. He directly referenced the constitution, demonstrating that ex-post-facto taxation is explicitly unconstitutional.

The Republican press conference closed with the GOP proclaiming that they are dedicated to fighting this legislation in order to protect the freedoms that Americans hold to be self-evident.