EDMAY710

While the financial sector has fought successfully to eliminate the Orderly Liquidation Fund and replacing it with giving the authority to the FDIC to unwind failing financial institutions, the Senate appears to be willing to tap the large bank resources to fund any necessary FDIC interventions.

The Senator Tester (D-MT) amendment shows some common sense and not only provides necessary funds but does it in a way that gives some relief to smaller banks. Tester's amendment revises the formula by which bank premiums for FDIC insurance is based. The current system determines the fees on deposits. Larger banks can boast extensive assets and Tester would take those assets into consideration when determining their fees.

The importance of available cash for dissolving those institutions is essential to buffering the economy from the impact of a large bank failure. While the OLF seems more reliable because the funds are there, other fees can do the job if there is time to collect them.

The Boxer amendment asserting that no taxpayer dollars may be used to clean up a financial disaster seems an understatement, but having that text in the final bill binds lawmakers to look elsewhere for funds.

As we have seen, banks can fall rapidly and seemingly without notice. Under S 3217 the FDIC will have the reach to watch closely and hopefully act before the bank's assets disappear.

Tester and Boxer take the bill in the right direction as far as protecting the national financial system and economy is concerned but the bill must, as it promises, be passed allowing for stringent FDIC scrutiny for safeguards to work. ##

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Historical Highlights

from the Clerk of the US House

The formation of the National Aeronautics and Space Administration (NASA)

May 6, 1965

On this date, the House voted in favor of a $5.1 billion authorization for the National Aeronautics and Space Administration (NASA).

In 1961, during a Joint Session before Congress, President John F. Kennedy challenged America to send a man to the moon before the end of the decade.

President Lyndon B. Johnson continued his predecessor’s fervent support for the civilian space program and stressed the need for adequate federal funding to ensure that the U.S. keep pace with the Soviet Union in the increasingly competitive space race during the Cold War. “If any fault is to be found hereafter with the progress of our space program,” Claude Pepper of Florida remarked during floor debate about the continuation of funding for NASA’s quest for a moon landing, “I do not want it to be on my hands at least and more importantly, I do not want it to be on the hands of this House of Representatives.”

Although the majority of Representatives in the 89th Congress (1965–1967) favored the substantial appropriation for space exploration, Congressman H. R. Gross of Iowa voiced the concerns of the few dissenters. “It seems to me that we had better think in terms of pulling back on this moonshot business until we can catch up with ourselves in the matter of spending.”

Ultimately, the House reaffirmed its support for Kennedy’s lofty goal by overwhelmingly backing the measure by a vote of 389 to 11. ##