U.S. Sen. Richard Shelby, R-Ala., said Monday that the Senate should be spending most of its time working on solving the credit crunch instead of passing a hastily-written stimulus bill he believes will not stimulate the economy.
Shelby said the key to getting out of the economic recession is finding a way to make banks feel more comfortable lending to each other again, and that as many as 100 additional banks could fail before things turn around.
“There are some good things in the stimulus bill,” Shelby said Monday during a county meeting at the Wiregrass Rehabilitation Center in Dothan. “But it’s not going to turn the economy around. If banks aren’t lending, then there is no job growth.”
Shelby said he is prepared to filibuster the proposed economic stimulus bill, but fears enough Republicans will side with Senate Democrats to override any attempt to block the bill’s passage.
The Senate is expected to debate a proposed $900 billion stimulus bill this week. A similar measure passed the House last week. Shelby said the plan will not provide the quick boost the economy needs, and would like to see the bill “shelved.”
“Are we prepared to filibuster? Hope so,” Shelby said. “But I’m afraid we may have two or three (Republicans) that might jump ship.”
Democrats control 58 seats in the Senate. Sixty votes are needed to end a filibuster.
Shelby is the ranking member of the Senate Banking Committee. He said he would like to see Congress and the White House explore a government-run “bad bank” that would take most of the banks’ toxic assets off the books and aggregate them into a single place.
“I think we should explore the idea,” Shelby said. “It might work, but I have to see the details. But that has to be our priority. How do we straighten up the financial institutions?”
Shelby said he has been a vocal opponent of government intervention into the private market, but said the magnitude of the financial crisis calls for the government to act.
“How did we get here? Money was cheap. Money was available. All you had to do to get it was show up. Maybe you didn’t even have to show up. I think it was just too easy.
“I feel like we have to restructure our whole regulatory system,” Shelby said.
Shelby also criticized President George W. Bush for supporting the Troubled Asset Relief Program (TARP) — a $700 billion program designed to provide relief to banks and other financial institutions — without adequate oversight.
“(Bush) listened to (Treasury Secretary Henry) Paulson, who came out of Wall Street, who came out of Goldman Sachs,” Shelby said.