Assemblyman Ted Lieu of Torrance, chair of the Assembly Rules Committee and former chair of the Assembly Banking and Finance Committee, took issue August 14th with proposed state budget language to provide tax breaks to subprime lenders.
“Gov. Arnold Schwarzenegger’s budget proposal to bail out subprime lenders with huge tax breaks is outrageous,” said Lieu. “Irresponsible subprime lending during the mortgage boom hurt millions of families and sent the economy on a downward spiral resulting in budget deficits across state and local governments.
“We should not be rewarding and enabling bad behavior by bailing out subprime lenders with large tax breaks.”
Lieu is also the lead author of several mortgage reform bills in the Legislature.
“Our top priorities are to protect education, preserve health care and the environment, and maintain public safety,” he said. “Bailing out subprime lenders should be nowhere on that priority list.
“Even in the best of times, there are a million other more worthy causes than helping subprime lenders.
“Now in bad times, when the governor is laying off state workers, giving corporate welfare to subprime lenders is not just morally wrong, it is idiotic.”
Lieu was referring to the governor’s decision earlier this month to reduce the salaries of certain state workers to the federal minimum wage level of $6.55. Controller John Chiang has vowed not to institute the governor’s order, and Schwarzenegger has since filed a lawsuit to compel Chiang to follow his executive order.