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Bill proposed to end government ownership of private industries

Posted by Ellen Krafve - email

Released by Sally-Shannon Scales with the office of Sen. John Cornyn:

WASHINGTON D.C. - U.S. Sen. John Cornyn, R-Texas, joined with Sen. John Thune, R-S.D., in introducing legislation today that would require the federal government to end its ownership of the private industries it has acquired over the past 15 months, at the expense of the taxpayers.  Their bill, the Government Ownership Exit Plan Act of 2009, would protect taxpayers from the significant liabilities they have been exposed to as a result of the federal government's takeover of several industries, including the banking and auto industries.

"The unprecedented Washington takeover of numerous private industries has left taxpayers on the hook for trillions-not to mention ownership of bankrupt companies," said Sen. Cornyn.  "This legislation provides the federal government with an exit strategy to protect American taxpayers and ensure that the unprecedented government intervention into the private market is only temporary.  This bill will also contain the government's footprint on our free market system, which has set a dangerous precedent and could lead to serious conflicts of interest between the federal government and the private sector."

The Government Ownership Exit Plan Act of 2009 would:

  • Require the federal government to sell any ownership stake of a private entity by July 1, 2010, with any revenue from the asset sale required to be put toward reducing the federal debt. The Treasury Dept. would have some flexibility to hold assets for an additional year, if those assets are undervalued and there is a reasonable expectation that they will increase to their original purchase value.
  • Prohibit the federal government from acquiring any additional ownership stake of private entities or making management decisions for companies currently owned by the federal government.
  • Require the Secretary of Treasury, within 90 days of enactment of this legislation, to submit a plan to Congress detailing how the government will end its conservatorship of Fannie Mae and Freddie Mac.
  • Enhance transparency by requiring the Treasury Dept. to report to Congress on any government-held ownership stake in a private entity and any loan or loan guarantee made by the Federal Reserve, as well as report on the progress of the divestiture process, which will be overseen by the TARP oversight board.
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