Members of Nevada’s House Delegation, Congresswoman Dina Titus, Congresswoman Shelley Berkley, and Congressman Dean Heller, sent a letter today to Secretary of Education Arne Duncan urging him to support a waiver should the Governor request one for education funding in the American Recovery and Reinvestment Act.  The waiver would make Nevada eligible to receive education dollars through the State Fiscal Stabilization Fund. 

Below is the text of the letter:

March 13, 2009

Dear Secretary Duncan,

It is paramount that the residents of Nevada have full access to the State Fiscal Stabilization Funds allocated under H.R. 1, The American Recovery and Reinvestment Act.  Therefore, we respectfully ask for your support when the Governor requests a waiver for the maintenance-of-effort requirement. 

As you know, The American Recovery and Reinvestment Act stipulates that as part of a state’s application for State Fiscal Stabilization Funds, it must provide assurance that it will maintain the same level of support for elementary, secondary and higher education in Fiscal Year 2009 through 2011 as it did in FY 2006.  

Nevada has been one of the states hardest hit by the recent economic downturn.  Our unemployment rate is at 9.4 percent– well above the national average.  Nevada also has the highest foreclosure rate and the highest rate of personal bankruptcy filings in the nation.  In short, the economic situation is particularly grim for Nevadans.  With state revenues lower than ever, the Governor has proposed a budget for state programs of $6.17 billion – 9.3 percent less than in 2007.

Such staggering economic statistics extend to Nevada’s ability to fund education programs in the state.  In Fiscal Year 2006, the state spent $555.9 million on higher education.  In the Governor’s recommended budget for Fiscal Year 2010, higher education is budgeted at only $424.3 million.  At a time when the state is already stretched so thin, a $131.6 million gap will be extremely difficult to restore.  While we certainly agree that states should be held accountable for maintaining appropriate levels of funding for education programs on their own balance sheets, we also know that it simply not an economic reality for states facing the worst budget shortfalls, like Nevada. 

Without the waiver that The American Recovery and Reinvestment Act grants you the power to provide, Nevada will miss out on critical funding.

Nevada students and their families are already experiencing the effects of tough economic times to a greater degree than their peers around the nation.  Now, more than ever, Nevada needs assistance.  We must invest in education now, both to avoid further losses of jobs and revenue, and to ensure that we have a better prepared workforce capable of filling the high-tech jobs of the 21^st century. 

We respectfully urge you to grant the state of Nevada a maintenance-of-effort waiver so that Nevadans may receive their much-needed share of the State Fiscal Stabilization Funds.

Sincerely,

Representative Dina Titus           Representative Shelley Berkley         Representative Dean

Pelosi and House Leaders Announce Action to Recoup Taxpayers Dollars from AIG and Other Companies

Following a House Democratic leadership meeting this afternoon, Speaker Nancy Pelosi announced that House leaders have directed the Committees on Ways and Means, Financial Services, and Judiciary to present legislation this week enabling taxpayers to recoup misspent public dollars from companies, such as American International Group, that have received billions in dollars in assistance from the U.S. Treasury.

 “We have repeatedly called on executives at corporations that have taken our financial system to the brink of collapse with irresponsible business practices to return their bonuses and other financial rewards,” Pelosi said. “Most appallingly, while millions of Americans struggle through this economy, those who have received the largest measure of taxpayer assistance from the Treasury Department have shown no restraint. 

 “Congress has already passed legislation signed into law by President Obama last month that protects taxpayers from excessive executive compensation and we will continue to pursue all effective means to curb such abuses of the public trust.”

The House committees are considering several actions to recoup taxpayer dollars, such as:

·         Authorizing the U.S.  Attorney General to recover prior and future excessive compensation payments made by companies, such as AIG, that received federal financial assistance;

·         Prohibiting abuse of retention bonuses by companies receiving capital infusions from Treasury; and   

·         Recouping a substantial portion of the bonuses through special taxation legislation.

The House could consider legislation as early as this week.  Tomorrow (March 18,) the CEO of AIG will appear before a subcommittee of the House Financial Services Committee, where he will face tough questioning from Members.

Berkley: We Are Reclaiming Excessive AIG Bonuses

Legislation Effectively Limits Bonus Payments by TARP Companies

Congresswoman Shelley Berkley will vote later today (March 19, 2009) in favor of legislation that will allow taxpayers to reclaim excessive bonuses paid to executives of insurer AIG.  The legislation also applies to other companies that have received TARP funds in excess of $5 billion, including Fannie Mae and Freddie Mac.  

 “Clearly AIG management should have never handed out these bonuses, so now we are taking the steps needed to reclaim millions of taxpayer dollars.  This bill effectively erases the ability of executives to keep bonuses they do not deserve and should not have been awarded and will prevent other companies that have taken TARP funds from ‘pulling an AIG’,” said Berkley.  “I hope other executives will see the outrage that AIG’s bad decision created and will move to voluntarily forfeit these bonuses.  And if they do not, then this law will enable the American taxpayer to take back millions in future bonuses.”

The legislation supported by Berkley, H.R. 1586, imposes a 90% tax on bonuses paid after December 31, 2008, by companies that have received over $5 billion in TARP funds, Fannie Mae, and Freddie Mac.  The tax would also apply to bonuses paid by entities affiliated with these companies.  Three-fourths of the TARP funds that have been spent went to companies that would be covered under the bill.  This tax will not apply to any bonus that is returned to the company in the same taxable year that the bonus is paid.  The bill would not affect taxpayers with adjusted gross incomes below $250,000 or employees of companies that have received $5 billion or less in TARP funds.  

Please click here to view text of H.R. 1586