Washington - U.S. Senator Robert Menendez (D-NJ) today introduced Wall Street accountability legislation that would effectively end the need for future taxpayer bailouts of "too big to fail" corporations. The Ending Taxpayer Bailouts By Making Wall Street Pay Act would require huge corporations to pre-pay into a fund that, in cases of financial crisis, would help wind down failed corporations in order to minimize collateral damage to the economy.
"Families facing tough times don't expect huge corporations to save them, just as corporations should never again expect taxpayers to save them when they struggle," said Menendez. "Corporations should have to pay for their own insurance policy like families do. As we implement Wall Street accountability that aims to prevent future collapses, we also need a safety net that is paid for by corporations themselves. By ensuring that corporations pay up front for this security, we can eliminate the prospect of taxpayer bailouts in the future."
Background on bill:
ENDING TAXPAYER BAILOUTS BY MAKING WALL STREET PAY ACT
Sponsored by Senator Robert Menendez
The Ending Taxpayer Bailouts by Making Wall Street Pay Act would require very large companies that pose risks to the whole economy to insure against the possibility of their failure. Risky firms would have to pay into a fund that would be available to wind down any risky firm that fails. Assessments would be based on the risk posed to the system. In the case of failure, shareholders would pay first; the fund would be used only to prevent spillover effects of a failure and wind down the firm, not to bail out a firm or keep it going.
The legislation would:
• Guarantee taxpayers will NOT be on the hook the next time a very large and risky company fails.
• Make firms pay to insure against their own demise.
• Keep in check and discourage risky activity since bigger, riskier firms will pay the most in assessments.
• Guarantee money will be available for a wind-down, averting possible market panic
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