Washington – Barack Obama’s new economic plan is exactly the opposite of what the country needs right now.

First, the Democratic senator called for a 90-day moratorium on bank foreclosures. There are several problems with this plan:

• Senator Obama opposed such a moratorium during the Democratic primary when Hillary Clinton proposed it. In fact, an Obama advisor told the Wall Street Journal, “A mandatory moratorium [on foreclosures] and rate freeze … could deter them [banks] from re-entering the market and would delay the return of liquidity.” We couldn’t have said it better ourselves.
• Obama’s plan will forbid banks from foreclosing on defaulted mortgages for 90 days, thereby forcing them to incur losses in interest income and possibly sell the home at lower prices than they might otherwise get for it. The moratorium harms banks precisely at a time when American banks need help.
• The plan also has a powerful chilling effect on the issuance of new mortgages. If banks know the government stands ready to suspend their right to foreclose, they will be less inclined to issue mortgages. New home buyers will be forced to pay higher mortgages to compensate banks for the additional risk Obama wants to impose on them. There could not be a worse time to impose higher home ownership costs on credit worthy borrowers.

Second, Obama’s plan to implement a $3,000 tax credit for each additional full-time job a business creates will do little to actually create new jobs. For starters, the tax credit is temporary and scheduled to end in 2010, while creating new jobs is a long-term endeavor. Additionally, the government shouldn’t be in the business of picking particular activities to subsidize—whether we are talking about creating new jobs, or investing in research and development, or any other activity. Instead, the obvious rational thing to do is lower the tax burden for businesses so the business can decide for itself which of these activities will help it to grow.

“Senator Obama’s plan may sound good on television, but the truth is, he is offering the American people tax gimmicks and new, costly burdens,” said Club for Growth President Pat Toomey. “Gimmicks won’t help the economy grow and imposing new costs will only weaken it further. The American economy needs broad tax cuts and the freedom to make independent business decisions—not top-down dictates from politicians.”

Washington – If voters in Michigan’s Seventh Congressional District want to know what kind of low-down depths Mark Schauer will sink to in order to win his congressional race, they should take a look at his latest ad.

The ad deliberately takes a Walberg quote out of context in order to attack the congressman’s character. In 2006, Walberg responded to critics who argued that Club for Growth members’ support for him would influence his voting, saying sarcastically: “If I go to Congress and lower taxes, reduce pork-barrel spending and kill the tax codes of the IRS, you can say, ‘Yep, I’m bought and paid for by them.’”

In the ultimate act of deceit, Schauer excerpts Walberg’s quote to make it look like the congressman actually admitted to being “bought and paid for.” Schauer sinks to further lows when he uses an actor in the ad to make it sound like Walberg’s voice. When Schauer attempted the same distortion in a press release last week, the Jackson Citizen Patriot lashed out at Mark Schauer, saying “only a moron can believe” Schauer’s interpretation of Walberg’s quote.

This may be difficult for Schauer to understand—given his support for higher taxes in the Michigan legislature—but voting for lower taxes and reducing wasteful spending is what voters in Michigan-07 actually expect from their congressman. Walberg’s fiscal conservative record means he is just doing the job voters sent him to do.

“It is clear that Schauer is sinking to distortions and half-truths because his record on economic issues is so appalling,” said Club for Growth President Pat Toomey. “Mark Schauer voted to raise income taxes, raise sales taxes, and raise the gas tax in the Michigan legislature—no wonder he is trying to distract voters from his record. In contrast, Rep. Walberg has consistently fought for taxpayers, voting to lower taxes and to reduce government spending. Mark Schauer should remove this deceitful ad from the air and explain to voters in Michigan-07 why he supported higher taxes so many times. Don’t voters deserve as much?”

PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – The Club for PAC endorsed Colorado Secretary of State Mike Coffman in Colorado’s Sixth Congressional District.

Mike Coffman has a long career of fighting for taxpayers no matter what position he has served in. In the Colorado Legislature, first as a representative and then as senator, Coffman had one of the most pro-growth records of all legislators. He has a proven track record of supporting lower taxes, less government spending, and other limited-government policies.

“The Club for Growth PAC is proud to support such a pro-growth candidate like Mike Coffman,” said Club for Growth President Pat Toomey. “We are confident Coffman will win his general election and will bring the same commitment to free-market, limited-government policies in the U.S. House of Representatives as he has throughout his political service in Colorado.

PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – Today, the Club for Growth released two new ads in Maryland’s First Congressional District. The $200,000 ad buy will run on broadcast television in the Baltimore and Salisbury markets.

Both ads are designed to tell voters in Maryland-01 just how liberal and out-of-touch Frank Kratovil is on economic issues. The first ad talks about Kratovil’s support for universal healthcare which could cost taxpayers billions of dollars and put personal healthcare decisions in the hands of government bureaucrats. The second ad informs voters about Kratovil’s cozy relationship with Big Labor. Kratovil has taken thousands of dollars from big labor unions whose top priority is passing the infamous “Card Check” bill which would strip workers of their right to a secret ballot election. It is clear that Frank Kratovil is too liberal for Maryland’s First Congressional District.

“Frank Kratovil is trying to hoodwink voters into thinking he is a moderate, but it is clear from his positions that he is a liberal lackey who will march in lockstep with Nancy Pelosi if elected to Congress,” said Club for Growth President Pat Toomey. “If voters in Maryland-01 want to be represented by someone who will fight for lower taxes and greater economic freedom, then Frank Kratovil is the last place they should turn. Instead, they should vote for State Senator Andy Harris who has a proven record of fighting for taxpayers.”

PAID FOR BY CLUB FOR GROWTH AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – The Club for Growth PAC urges Senator John McCain to seize the mantle of leadership on the economy in tonight’s second presidential debate.

In order to do so, Senator McCain will need to do two things. First, he needs to explain to the American people exactly how we got to this crisis point. There is a temptation to use Wall Street and the free-market as a scapegoat, but this revisionist history is factually wrong and will only lead to counterproductive government responses. Instead, Senator McCain should explain how the federal government caused this debacle with an inflationary monetary policy, legislation pushing banks to lend to un-creditworthy borrowers, and politicians who refused to properly regulate and capitalize Fannie Mae and Freddie Mac.

After all, Senator McCain has long encouraged reforming Fannie and Freddie, while Senator Obama remained silent and his Democratic colleagues actively resisted regulatory reforms. Politicians on both sides of the aisle—led by the Democrats—pushed irresponsible housing legislation including the Community Reinvestment Act and the American Dream Downpayment Initiative. Senator McCain should ask Senator Obama why the American people should trust him and the Democratic Party to fix this crisis when they played such a big role in creating it.

Second, Senator McCain should list specific, targeted steps Congress can take to alleviate the current crisis. These include:

• Call for an immediate and temporary FDIC guarantee of 100% of transaction accounts for all banks that choose to pay the corresponding insurance premiums.
• The Treasury’s recent guarantee of money market funds necessitates this measure to ensure confidence in banks and prevent unnecessary runs on banks
• Insist on new accounting rules for assets without a market.
• In highly illiquid markets, mark-to-market rules are inappropriate, misleading, and damaging to banks as the resulting paper losses pressure them to sell assets at fire-sale prices.
• Eliminate the capital gains tax as a way to spur investment, help the equity markets recover, and help recapitalize banks.
• Eight European countries have already eliminated individual capital gains taxes and more are considering doing so. The United States should be ahead of this curve, not behind it.
• Call for a cut in corporate tax rates to 12.5%.
• McCain’s call to lower this rate to 25% is a good start, but the current crisis calls for bolder measures. Our current tax regime puts us at a large competitive disadvantage vis-à-vis other countries. Countries like Ireland, who cut their corporate tax rate to 12.5%, have experienced an explosion in economic growth. There is no reason why the U.S. should be lagging behind.
• Announce a 5% across-the-board cut in government spending, excluding only defense, Social Security, veteran programs, and Medicare.
• McCain’s call to freeze portions of the federal budget is a huge improvement over the enormous spending increases proposed by Obama, but Americans have come to appreciate how wasteful the federal government is and would welcome a modest spending cut.

“Tonight, Senator McCain has an opportunity to demonstrate to the American people that he has the judgment and experience to tackle the economic crisis,” said Club for Growth President Pat Toomey. “He also has an opportunity to demonstrate that Barack Obama’s Democratic Party has been wrong from the very beginning. We encourage Senator McCain to seize that opportunity.”

PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – Today, the Club for Growth PAC begins running a TV ad on Mark Schauer’s tax record in Michigan’s Seventh Congressional District. The $175,000 ad buy will run on broadcast television in the Lansing market and on cable stations throughout the Seventh District.

Mark Schauer’s record on taxes is abysmal, and voters have a right to know just how much Mark Schauer voted to raise their taxes before they make their decision on Election Day. His record is all the more insulting when you consider how Michigan taxpayers are struggling in these hard economic times. Over his years in the Michigan House of Representatives and in the State Senate, Schauer voted to raise taxes multiple times and is supporting further tax increases today:

• In 1997, Schauer voted to raise Michigan’s gas tax (House Journal 69, RC #777, 07/16/97)
• In 2007, Schauer voted to raise Michigan’s income tax (Senate Journal 100, RC #397, 10/01/07)
• In 2007, Schauer voted to raise Michigan’s sales tax (Senate Journal 100, RC #398, 10/02/07)
• Schauer says he is open to raising Social Security taxes (Detroit News, 09/08/08)

“In the State Legislature, Mark Schauer voted to raise taxes non-stop,” said Club for Growth President Pat Toomey. “So why should voters in Michigan send him to Congress? No doubt, he will vote to raise taxes in Congress just as much if not more. If voters want a representative who will fight for lower taxes and oppose outrageous measures like raising Social Security taxes, they should vote to reelect Rep. Tim Walberg. Walberg has a proven record of fighting against the Democratic tax-raising machine.”

PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – Club for Growth Pat Toomey released the following statement on the House’s defeat of the bailout plan today:

“The Club for Growth commends the House of Representatives for voting today to take a different approach in addressing the current financial crisis,” said Club for Growth President Pat Toomey. “We urge Congress to immediately pass a measure that suspends mark-to-market rules for banks and lifts the cap on the FDIC’s guarantee on transaction accounts for banks. These two relatively non-controversial measures will help stabilize the markets and shore up confidence in our financial institutions. There is no reason why any member of Congress—Democrat or Republican—should oppose these commonsense provisions.”

Washington – The Club for Growth urges all members of Congress to reject the latest “compromise” bailout bill.

Although conservatives in the House convinced Congress to strip many of the worst elements of the previous “compromise” bailout bill, the legislation remains fundamentally flawed. The bill increases the federal debt by billions of dollars, rewards bad decisions made by failing banks, and establishes a dangerous precedent for government bailouts down the road. This bill should be defeated, and it is clear from the precipitous drop in the Dow this morning that the markets are equally unimpressed with this legislation.

Instead of passing this bill, Congress should do two things immediately to help our credit markets. First, Congress should immediately suspend mark-to-market rules for banks. Second, Congress should lift the cap on the FDIC’s guarantee on transaction accounts at banks. Last week, the government instituted an unlimited guarantee on money market funds, creating an incentive to withdraw deposits from banks. The last thing the government should be doing is encouraging a run on banks. The best way to fix this under current circumstances is to lift the FDIC’s cap.

“For years, Congress played a central role in creating and encouraging the current crisis,” said Club for Growth President Pat Toomey. “With this bill, Congress further undermines our free-market system. If Congress really wants to stabilize the markets and restore financial confidence, it should suspend mark-to-market rules and lift the cap on the FDIC’s guarantee on transaction accounts. No member of Congress should leave town without getting this done.”

The Club for Growth will be key-voting the vote on the bailout bill, urging all members to vote “No.” Key votes are included in our Congressional Scorecard for the 110th Congress. The scorecard provides a comprehensive rating of how well or how poorly each member of Congress supports pro-growth, free-market policies.

Washington – Club for Growth President Pat Toomey released the following statement on President Bush’s speech on the economy:

“We understand the political temptation to take quick and decisive action, but a multi-hundred billion dollar taxpayer-funded bailout is the wrong answer. President Bush is predicating the need for a government bailout on the assumption that the credit markets are ‘frozen,’ but we see no evidence of a general freezing of credit markets. As Robert Higgs of the Independent Institute reports on the St. Louis Fed’s data, total outstanding bank credit is at or near record highs. While certainly some financial institutions are under great stress, eighteen months into this financial crisis their problems have not spread widely. The economy continues to grow; productivity growth is strong; and unemployment, while increasing, is not close to levels it has routinely reached in past recessions.”

“The bailout plan is fundamentally unfair to American taxpayers and responsible borrowers and lenders. The bailout misallocates capital, risks massive inflation, invites political manipulation, and sets a bad precedent for future bailouts down the road. Already we are witnessing other industries lining up for their share of the government’s handouts.”

“Instead of acting rashly, Congress needs to take a deep breath and enact pro-growth policies like a stable dollar policy and lower taxes on capital gains and corporate income. In addition, mark-to-market accounting for banks should be suspended and Congress should implement an expedited Chapter 11 process for financial institutions that become insolvent. We encourage all members of Congress to reject a massive bailout plan.”

Washington – The Club for Growth condemned the massive government bailout proposed by the Treasury and the Bush administration as unnecessary, unfair to taxpayers, and fraught with serious costs to the American economy.

Eighteen months into the credit crunch, many largely capitalized financial services firms are experiencing serious difficulties but the overall economy continues to grow. GDP growth over the past 12 months was 2.25 percent and 3.5 percent when excluding the drag imposed by the housing sector. Even within the financial sector, many banks are doing well. Regional bank indices had risen significantly since the lows of last July—prior to the bailout announcement—and thousands of community banks are thriving. It is extraordinary that a massive government intervention in the economy is considered inevitable when the economy is not even in a recession.

At the same time, socializing economic risks come at a great cost to the American economy by misallocating capital, inviting political manipulation, and putting taxpayers on the hook for possibly a trillion dollars. Such a large takeover by the government will surely be accompanied by adverse, unintended consequences. Already, other companies and industries are lining up at government’s door asking for their own bailout. And if the government incurs $700 billion in debt to finance the purchase of bad bank assets, the danger that it will eventually monetize that debt and trigger dramatic inflation is very worrisome.

“The Treasury’s bailout proposal will likely cause more harm than good,” said Club for Growth President Pat Toomey. “Instead of launching the largest government bailout since the Great Depression, the government should be implementing policies to stimulate the economy. These include, at a minimum, cutting the tax on capital gains, cutting corporate taxes, reviewing and considering repeal of FAS 157 which requires banks to mark-to-market most securities, and emphasizing the need for a strong dollar.”

“Finally, many politicians are using the current struggle to make free-market capitalism the scapegoat for the economy’s troubles, when in fact, government played a major role in getting us into this mess in the first place. Free-market capitalism is alive and well, and we should be embracing its tenets, not rejecting them.”

Washington – The Club for Growth PAC expressed disappointment with Senator John McCain’s support for a plan to provide $25 billion in government loans in a politically motivated bailout of the auto industry.

It is important to make a distinction between the bailout of financial institutions whose failures might cause systemic devastation to the country’s financial system and those that won’t. Reasonable people can debate the merits of the former, but it is indefensible to put taxpayers on the hook for a bailout of an industry that poses no systemic risk to the American economy as a whole.

The bailout of the auto industry is nothing more than a politically motivated transfer of wealth from taxpayers to a favored special interest headquartered in a political swing state. When governments transfer wealth from one group of Americans to another out of political motivation, they misallocate capital resources and diminish economic growth and the prosperity of our country generally. In addition to being fundamentally unfair and wrong on principle, this bailout will prove economically harmful as well.

The auto industry bailout continues a growing and dangerous trend of socializing the risks inherent in a free economy, setting a precedent for future industries down the road. The expectation that government will swoop in to save the day when times get tough encourages companies and industries to take risks they would not otherwise take. At the end of the day, taxpayers are forced to foot the bill for irresponsible decisions that would not have been made without government hovering in the background.

“In these tough financial times, the government must resist the temptation to hand out a check to every industry that comes knocking at its door,” said Club for Growth President Pat Toomey. “Throughout his career, Senator McCain has been a very vigilant watchdog of taxpayer dollars, leading the fight against unnecessary and wasteful spending in the past. We urge McCain to apply that admirable vigilance to the recent spate of government bailouts.”

PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – In light of the latest crisis on Wall Street, Club for Growth President Pat Toomey released the following statement:

“While our hearts go out to the employees of Lehman Brothers and their families, we commend Treasury Secretary Paulson for his courage in resisting another bailout. Clearly, a line had to be drawn, and while the risks associated with the Lehman bankruptcy are not small, the long-term risks of undermining our free-enterprise system by socializing failures would have been much greater.”

“Already, after bailouts in different forms of Bear Stearns, Fannie Mae and Freddie Mac, the American car companies are begging Congress for their own taxpayer handout. If they succeed, the airlines, home builders, and every struggling industry will not be far behind. Resisting another bailout was a smart move. It should be followed up with a round of corporate income tax cuts and cuts on capital gains which would help ailing firms on Wall Street and Main Street to preserve and, where necessary, to attract capital.”

Washington – Senator Obama’s attacks against Sarah Palin on the Bridge to Nowhere are an example of political hypocrisy at its worst. The Club for Growth PAC calls on Senator Obama to disavow his 2005 vote in favor of the Bridge to Nowhere.

Barack Obama spent the better portion of yesterday attacking Sarah Palin for supporting the Bridge to Nowhere once upon a time even though she had the courage to get rid of it as governor. Yet, when Barack Obama had a chance to kill Alaska’s Bridge to Nowhere and spend the money on Katrina victims, he voted—drum roll please—No.

And over the last three years, Barack Obama hasn’t changed his tune one bit. He has not disavowed his 2005 vote in favor of the Bridge to Nowhere. And he continues to vote to save specific, egregious earmarks. In 2007, Obama was given the opportunity to vote for an amendment to transfer money earmarked for bicycle paths to fixing America’s bridges. He voted against the amendment. He was given the opportunity to vote for an amendment to eliminate earmarks for a Peace Garden in North Dakota and a baseball field in Montana. Barack Obama voted against the amendment.

In contrast, Sarah Palin stood up to the biggest porkers in her state when she refused to spend taxpayer dollars on the Bridge to Nowhere. Some in the media have claimed that Congress killed the Bridge first. This is not true. Congress removed the requirement to fund the bridge, leaving the choice up to the state. Once given the choice, Palin refused to spend taxpayer dollars on the wasteful Bridge to Nowhere. Standing up to Ted Stevens and Don Young in Alaska is nothing to sneeze at. Clearly, Barack Obama didn’t have the same courage in 2005.

“While Barack Obama attacks Sarah Palin, we still have not heard him disavow his 2005 vote in favor of the Bridge to Nowhere and admit his mistake,” said Club for Growth President Pat Toomey. “Sarah Palin deserves credit for recognizing how harmful and corrupt the pork process has become. Barack Obama has had three years to come to the same realization, and we’re still waiting. We call on Senator Obama to disavow his 2005 vote in favor of the Bridge to Nowhere.”

PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.

Washington – As the federal government prepares to nationalize the dominant players in the mortgage industry, the Club for Growth announced its disappointment with the White House’s handling of the Fannie and Freddie bailout today. While the bailout was inevitable at this point in the game, Treasury Secretary Henry Paulson missed a vital opportunity to shrink the size of Fannie and Freddie and put them on the path towards complete privatization.

Fannie and Freddie’s inadequate capital and enormous size, attained through its reliance on an implicit government backing, has created a grave risk to our financial system. Rather than force Fannie and Freddie to begin the process of shrinking their balance sheets so that they could be sold off in smaller, less systematically risky pieces, Paulson has delayed this process until 2010. Instead, Fannie and Freddie are actually given permission by the federal government to grow over the next year and a half, making the prospect of eventually shrinking and privatizing them very dubious. This is akin to Congress saying, “we’re going to spend an extra $100 billion this year, but don’t worry, we’ll start saving money in a couple of years.” We all know the promised savings never materialize. In the meantime, taxpayers are on the hook for all of Fannie and Freddie’s liabilities.

Unfortunately, there is little reason to believe that Congress will follow through on Paulson’s instructions come 2010. House Financial Services Committee Chairman Barney Frank has no interest in truly privatizing the mortgage industry. And there is no guarantee that a future administration will want to undertake such a daunting task—especially after the mortgage security giants continue to grow for another year and a half.

“The circumstances we face today are a direct result of a fundamentally flawed business model operating with an indirect taxpayer subsidy,” said Club for Growth President Pat Toomey, “but the administration’s refusal to begin an immediate process of fundamentally reforming the model by turning it into its rightful form as a fully private venture only exacerbates a dire situation. Secretary Paulson’s intervention today misses a unique opportunity to fix this mess. American taxpayers could end up paying a very dear price for this mistake.”

Washington – The Club for Growth wished Senator Barack Obama congratulations on finally recognizing that tax increases will hurt the country’s economy, but questioned why he is determined to raise them anyway.

Over the weekend, Senator Obama said he would delay rescinding the Bush tax cuts if the economy is in a recession, saying, “I think we’ve got to take a look and see where the economy is. I mean, the economy is weak right now.” At the same time, Barack Obama said he would not extend the Bush tax cuts when they expire in 2010. This is tantamount to saying, “I know tax increases are bad for the economy but I’m going to raise them anyway.”

“It is high time Barack Obama recognized what has been obvious for decades—high taxes are like a dead weight on economic growth,” said Club for Growth President Pat Toomey. “High taxes punish work, savings, investment, profit, and risk taking. Conversely, cutting taxes encourages all of these vital activities and thereby promotes economic growth. So now that Obama has recognized that tax increases hurt the economy, why is he so determined to raise them? The logical conclusion from Obama’s own observation is that he should be supporting making the 2001 and 2003 tax cuts permanent.”