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Senate’s Wall Street Bailout Measure Insures Bank Deposits of the Wealthiest

By David Kravets October 01, 2008 | 7:07:39

The Senate on Wednesday is poised to vote on a $700 billion Wall Street bailout package that includes provisions insuring the bank deposits of the wealthiest Americans.

In a bid to shore up Senate votes, believe it or not, the Senate bill increases to $250,000 from $100,000 the amount Uncle Sam will insure for a single bank deposit.

As The New York Times described it Tuesday, "Republicans and Democrats vied to claim the idea as their own. Republicans said that Mr. Obama was stealing an idea that Republican lawmakers championed during last weekend’s heated negotiations over the scope of the bailout bill, but that Democratic leaders had rejected it."

Two key supporters of the increase are presidential hopefuls Barack Obama and John McCain.

We know the divorce rate in the United States is about 50 percent. But the rate appears to be about 100 percent when it comes to lawmakers and their constituents.

According to Census figures (.pdf) released in August, the median household income in the United States last year was $50,000 and some change. Households earning $250,000 or more accounted for 1.9 percent of the U.S. public.

And according to the U.S. Department of Commerce, the "personal savings rate" in the United States is hovering at under 3 percent of "disposable personal income."

McCain, however, urged an increase in the insurance ceiling, saying "we cannot allow a crisis in our financial system to become a crisis in confidence."

The proposed legislation comes with tax breaks for business and alternative energy sources, and might make it easier for small businesses to conduct business within a single bank account. Still, Obama said the increase in the insurance level would help "families."

"One step we could take to potentially broaden support for the legislation and shore up our economy would be to expand federal deposit insurance for families and small businesses across America who have invested their money in our banks," Obama said.

Even stranger, Obama wants to levy more taxes on the families who might benefit from the increase in deposit insurance. Obama’s tax package includes new levies on people earning $250,000 or more.

He wants to apply the 6.2 percent Social Security payroll tax to taxpayers earning more than $250,000 a year. The tax is now only applied to wages of up to $102,000 annually.