157-440: Bowles–Simpson Commission 2007–2008 financial crisis 2013 budget sequestration Related events The National Commission on Fiscal Responsibility and Reform (often called Simpson–Bowles or Bowles–Simpson from the names of co-chairs Alan Simpson and Erskine Bowles ; or NCFRR ) was a bipartisan Presidential Commission on deficit reduction, created in 2010 by President Barack Obama to identify "policies to improve
314-501: A Juris Doctor degree from George Washington University , Reid began his public career as the city attorney for Henderson, Nevada , before being elected to the Nevada Assembly in 1968. Gubernatorial candidate Mike O'Callaghan , Reid's former boxing coach, chose Reid as his running mate in 1970 ; following their victory Reid served as the 25th lieutenant governor of Nevada from 1971 to 1975. After being defeated in races for
471-401: A Tea Party supporter, stated that the proposed changes to entitlement spending should take effect sooner instead of in future decades but praised the proposal for also having "some good ideas". The Concord Coalition , a non-profit and non-partisan anti-deficit activist group, applauded the report and labeled it a "promising start." The final plan, released on December 1, 2010, aimed to reduce
628-569: A " saving glut ". Harry Reid Harry Mason Reid Jr. ( / r iː d / ; December 2, 1939 – December 28, 2021) was an American lawyer and politician who served as a United States senator from Nevada from 1987 to 2017. He led the Senate Democratic Caucus from 2005 to 2017 and was the Senate Majority Leader from 2007 to 2015. After earning an undergraduate degree from Utah State University and
785-408: A $ 30 billion planned golf course development, Coyote Springs , a project heavily criticized by environmental groups for reasons including its projected effects on several endangered species. Whittemore served a two-year prison sentence after being found guilty in 2013 of funneling $ 133,400 in illegal contributions to Reid's reelection campaign. Reid scored a lifetime conservative rating of 19% from
942-687: A 60-vote bar for passage of bills without a Democratic filibuster . Conservatives criticized Reid for his extensive use of the procedural tactic known as " Filling the tree " to prevent amendments on important bills. In 2007, while he was the Senate Majority Leader, Reid initiated the Advanced Aerospace Threat Identification Program to study unidentified flying objects at the urging of Reid's friend, Nevada billionaire and governmental contractor Robert Bigelow , and with support from
1099-505: A baseline called the "Plausible Baseline", which closely resembled the Congressional Budget Office's Alternative Fiscal Scenario, the plan proposed roughly $ 2 in spending cuts to $ 1 in revenue increases. The Plausible Baseline built off of a current law baseline by assuming that the 2001/2003 tax cuts were extended except for those above $ 250,000, the estate tax and Alternative Minimum Tax would continue at 2009 levels,
1256-526: A bill modeled on the plan, with, according to analyst Ezra Klein , "somewhat less in tax increases," to a vote in the House where it was rejected 382 to 38. 22 Democrats and 16 Republicans supported the bill. There was mixed reaction to the plan. Some praised the recommendations of the proposal while others attacked it. One proponent, Maya MacGuineas at the Committee for a Responsible Federal Budget, said of
1413-402: A company he claimed manufactured the device, alleging the device was defective. In 2019, a jury rejected his claim for lack of evidence. On May 14, 2018, Reid had surgery for pancreatic cancer at Johns Hopkins Cancer Center after a tumor was found on his pancreas during a routine screening. In a January 2019 interview with The New York Times , it was revealed that he was confined to
1570-662: A country (such as the US) running a current account deficit also have a capital account (investment) surplus of the same amount. Hence large and growing amounts of foreign funds (capital) flowed into the U.S. to finance its imports. All of this created demand for various types of financial assets, raising the prices of those assets while lowering interest rates. Foreign investors had these funds to lend either because they had very high personal savings rates (as high as 40% in China) or because of high oil prices. Ben Bernanke referred to this as
1727-566: A deal based on the Simpson–Bowles framework. Critics on the left, such as Democratic Representative Jan Schakowsky (a Commission member) and economist Paul Krugman , opposed the Simpson–Bowles proposal because it would cut entitlement and social safety net programs, including Social Security and Medicare . Critics on the right, such as Republican commission members Paul Ryan , Jeb Hensarling , and Dave Camp , and anti-tax activist Grover Norquist of Americans for Tax Reform , objected to
SECTION 10
#17327903537801884-450: A further collapse, encourage lending, restore faith in the integral commercial paper markets, avoid the risk of a deflationary spiral , and provide banks with enough funds to allow customers to make withdrawals. In effect, the central banks went from being the " lender of last resort " to the "lender of only resort" for a significant portion of the economy. In some cases the Fed was considered
2041-495: A global economic shock, resulting in several bank failures . Economies worldwide slowed during this period since credit tightened and international trade declined. Housing markets suffered and unemployment soared, resulting in evictions and foreclosures . Several businesses failed. From its peak in the second quarter of 2007 at $ 61.4 trillion, household wealth in the United States fell $ 11 trillion, to $ 50.4 trillion by
2198-483: A housing bubble to replace the Nasdaq bubble". Moreover, empirical studies using data from advanced countries show that excessive credit growth contributed greatly to the severity of the crisis. Additional downward pressure on interest rates was created by rising U.S. current account deficit, which peaked along with the housing bubble in 2006. Federal Reserve chairman Ben Bernanke explained how trade deficits required
2355-736: A job as this one does in getting us back on a sound fiscal course." Senator Judd Gregg , the senior Republican on the Senate Budget Committee, noted that the report was a "starting point." The proposal was dismissed as "unserious" by New York Times columnist Paul Krugman for its large cuts in income tax rates. Krugman dismissed the idea that current marginal rates are a drag on economic growth. Further, he doubted that proposed combination of rate cuts and removal of deductions and loopholes will be revenue neutral, let alone increase revenue. Union leaders such as Richard Trumka and several Democrats Representative Raul Grijalva rejected
2512-567: A liberal budget plan that would cut the deficit by $ 441 billion. Schakowsky's plan would raise revenue (by eliminating the FICA cap ; eliminating the foreign earned income exclusion , raising the taxes on capital gains , dividends, and bonds, and establishing a cap-and-trade system taxing corporate carbon emissions ); cut defense spending by $ 110 billion and non-defense spending by $ 33 billion; and spend $ 200 billion on infrastructure and other measures aimed at boosting economic growth. Dean Baker of
2669-597: A lower level. Additionally, the CLASS Act was enacted as Title VIII of the Patient Protection and Affordable Care Act but was repealed January 1, 2013. 2007%E2%80%932008 financial crisis The 2007–2008 financial crisis , or the global financial crisis ( GFC ), was the most severe worldwide economic crisis since the 1929 Wall Street crash that began the Great Depression . Causes of
2826-592: A man and a woman", but abandoned that position in favor of same-sex marriage in 2012. In regard to local issues, Reid firmly opposed construction of the proposed Yucca Mountain federal nuclear waste repository in Nevada. Reid initially opposed the legalization of online poker , but in 2010 it was reported his position had evolved – a move some argued was influenced by "the hundreds of thousands of dollars Las Vegas casinos contributed to his re-election campaign ". Reid called immigration reform one of his priorities at
2983-465: A member of The Church of Jesus Christ of Latter-day Saints . On January 1, 2015, Reid was injured while exercising in his home—he said a piece of equipment he was using broke (later "slipped"), causing him to fall. As a result, he suffered broken ribs and broken facial bones, and was at risk of permanent vision loss in his right eye. On January 26, 2015, he underwent surgery to remove a blood clot from his right eye and repair facial bones. He later sued
3140-532: A net worth of between $ 2.9 million and $ 9.3 million. Most of Reid's net worth was in municipal securities and in land and mineral rights in southern Nevada and Arizona; a blind trust managed the liquid assets of Reid and his wife. Reid lived in the Anthem area of Henderson, Nevada . Reid (who was raised agnostic ) and his wife (who was born to Jewish immigrant parents and grew up in Henderson) converted to
3297-610: A police officer for the United States Capitol Police , and he earned his Juris Doctor in 1964. Reid returned to Nevada after law school and served as Henderson city attorney before being elected to the Nevada Assembly for the multi-member fourth district of Clark County in 1968. In 1970, at age 30, Reid was chosen by O'Callaghan as his running mate for Lieutenant Governor of Nevada . Reid and O'Callaghan won their respective races, and Reid served as lieutenant governor from 1971 until 1974, when he ran for
SECTION 20
#17327903537803454-484: A polished figure in Washington. That is not Harry Reid." Reid was known for his skills in political organizing and getting out the vote , and his voter coalition known as the "Reid Machine" was credited with being the driving force behind several statewide Democratic wins, including Hillary Clinton in the 2016 United States presidential election in Nevada and Catherine Cortez Masto 's election to succeed Reid in
3611-545: A really bad economy. In other words, the borrowers did not cause the loans to go bad-it was the economy. Between 1998 and 2006, the price of the typical American house increased by 124%. During the 1980s and 1990s, the national median home price ranged from 2.9 to 3.1 times median household income. By contrast, this ratio increased to 4.0 in 2004, and 4.6 in 2006. This housing bubble resulted in many homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by
3768-494: A restricted right to abortion, stating that "abortions should be legal only when the pregnancy resulted from incest, rape, or when the life of the woman is endangered ". He voted several times to ban the intact dilation and evacuation , or "partial-birth abortion" procedure. Reid supported embryonic stem cell research . Over the time, Reid shifted his support towards more progressive views. Regarding same-sex marriage , Reid initially believed that "marriage should be between
3925-404: A significant increase in subprime lending . Subprime had not become less risky; Wall Street just accepted this higher risk. Due to competition between mortgage lenders for revenue and market share, and when the supply of creditworthy borrowers was limited, mortgage lenders relaxed underwriting standards and originated riskier mortgages to less creditworthy borrowers. In the view of some analysts,
4082-489: A single pool from which specific securities draw in a specific sequence of priority. Those securities first in line received investment-grade ratings from rating agencies. Securities with lower priority had lower credit ratings but theoretically a higher rate of return on the amount invested. By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid
4239-615: A speech at Brigham Young University to about 4,000 students on October 9, 2007, in which he expressed his opinion that Democratic values mirror Mormon values. Several Republican Mormons in Utah contested his faith because of his politics, such as his statements that the church's backing of California's Proposition 8 wasted resources. Reid was the co-chairman of the Board of Selectors of Jefferson Awards for Public Service . In April 2015, Reid confirmed former U.S. Senator Larry Pressler as
4396-400: A supermajority during voting on December 3, with 11 of 18 votes in favor. Voting for the report were Bowles , Coburn , Conrad , Crapo , Cote , Durbin , Fudge , Gregg , Rivlin , Simpson , and Spratt . Voting against were Baucus , Becerra , Camp , Hensarling , Ryan , Schakowsky , and Stern . On March 28, 2012, Representatives Jim Cooper (D-TN) and Steve LaTourette (R-OH) put
4553-457: A vast web of derivatives linked to those MBS, collapsed in value . Financial institutions worldwide suffered severe damage, reaching a climax with the bankruptcy of Lehman Brothers on September 15, 2008, and a subsequent international banking crisis . The prerequisites for the crisis were complex. During the 1990s, the U.S. Congress had passed legislation intended to expand affordable housing through looser financing. In 1999, parts of
4710-483: A video to his YouTube account announcing that he would not seek reelection in November 2016. Reid endorsed Senator Chuck Schumer from New York to succeed him as Minority Leader. Former Nevada Attorney General and fellow Democrat Catherine Cortez Masto was elected to succeed Reid as a U.S. senator from Nevada. On January 1, 2017, two days before the end of his term, Reid surpassed Senator John P. Jones to become
4867-593: A vote, has received significant attention since its inception. The National Journal noted that, "Hardly a day goes by in Congress or on the hustings without some lawmaker extolling Simpson–Bowles as the kind of potent fiscal medicine Americans must swallow if the country is to fix its debt and deficit problems, reform government and revive the economy." The Simpson–Bowles framework and its goal of $ 4 trillion of deficit reduction has been used by other, such as President Obama and Speaker Boehner in their negotiations during
National Commission on Fiscal Responsibility and Reform - Misplaced Pages Continue
5024-425: A way to avoid the fiscal cliff. Additionally, during the spring of 2012, a Budget Resolution based in part on the Simpson–Bowles plan was voted on in the House of Representatives. The plan was voted down 382–38. Simpson and Bowles have done further outreach themselves. In November, 2011, Simpson and Bowles submitted written testimony to the "supercommittee" charged with making budget adjustments by Congress, urging
5181-468: Is Nevada's longest-serving senator, surpassing John P. Jones 's record by two days. Reid was succeeded as the Senate Democratic leader by Chuck Schumer , whose leadership bid had been endorsed by Reid. Along with Alben W. Barkley and Mike Mansfield , Reid was one of only three senators to have served at least eight years as majority leader. Harry Reid International Airport , which serves
5338-492: Is going on" and stated that "hundreds and hundreds of papers" have been available since the program was completed and that "Most all of it, 80 percent at least, is public" adding "I wanted it public, it was made public, and you guys have not even looked at it." A 2009 letter by Reid was published by KLAS-TV investigative journalists George Knapp and Matt Adams, where the Senator states that AATIP has made "much progress" with
5495-544: Is important. It offers nothing on Medicare that isn't already in the Affordable Care Act . And it raises the Social Security retirement age because life expectancy has risen completely ignoring the fact that life expectancy has only gone up for the well-off and well-educated, while stagnating or even declining among the people who need the program most." Bowles-Simpson, while never officially coming to
5652-649: Is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. In the table, the names of emerging and developing economies are shown in boldface type, while the names of developed economies are in Roman (regular) type. The twenty largest economies contributing to global GDP (PPP) growth (2007–2017) The expansion of central bank lending in response to
5809-480: The Los Angeles Times suggested that Reid had introduced legislation and imposed pressure on regulatory agencies to advance the business interests of his close friend Harvey Whittemore , a Nevada attorney-lobbyist who contributed heavily to Reid's campaigns and leadership fund and who employed Reid's son Leif as his personal attorney. With Reid's help, Whittemore was able to proceed with construction of
5966-530: The 111th Congress , Reid shepherded the Patient Protection and Affordable Care Act (PPACA) through the Senate. Reid was initially a centrist Democrat, and he held anti-abortion views and supported gun rights and opposed illegal immigration . He was considered fiscally liberal and socially conservative. He believed that Roe v. Wade should be overturned, and in 1999, voted against an amendment that supported Roe . In 1998, he stated that he believed in
6123-637: The American Conservative Union (ACU), and a 2008 liberal rating of 70% from the Americans for Democratic Action (ADA). Other independent ratings include a 29% rating in 2003 from NARAL , the abortion rights lobbyists , an 85% rating from Planned Parenthood in 2013, and a "B" rating from the NRA Political Victory Fund . Reid spearheaded several initiatives while in Congress. In 2006, Reid co-sponsored
6280-600: The Center for Economic and Policy Research in Washington criticized the deficit report for omitting a tax on the financial industry, as was recommended by the International Monetary Fund . Economist and New York Times columnist Paul Krugman wrote, "Simpson–Bowles is terrible. It mucks around with taxes, but is obsessed with lowering marginal rates despite a complete absence of evidence that this
6437-583: The Colorado River , among other projects, "incredibly good news for Nevada" in a news release after the passage of the 2006 transportation bill. He owned 160 acres (65 ha) of land several miles from the proposed bridge site in Arizona. The bridge could add value to his real estate investment. A year later it was reported that Reid had used campaign donations to pay for $ 3,300 in Christmas gifts to
National Commission on Fiscal Responsibility and Reform - Misplaced Pages Continue
6594-582: The Dodd–Frank Wall Street Reform and Consumer Protection Act was passed, overhauling financial regulations. It was opposed by many Republicans , and it was weakened by the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018. The Basel III capital and liquidity standards were also adopted by countries around the world. The recession was a significant factor in the 2010s European debt crisis . The crisis sparked
6751-538: The Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%. This was done to soften the effects of the collapse of the dot-com bubble and the September 11 attacks , as well as to combat a perceived risk of deflation . As early as 2002, it was apparent that credit was fueling housing instead of business investment as some economists went so far as to advocate that the Fed "needs to create
6908-604: The Glass–Steagall legislation (passed in 1933) were repealed , permitting institutions to mix low-risk operations, such as commercial banking and insurance , with higher-risk operations such as investment banking and proprietary trading . As the Federal Reserve ("Fed") lowered the federal funds rate from 2000 to 2003, institutions increasingly targeted low-income homebuyers, largely belonging to racial minorities , with high-risk loans; this development went unattended by regulators. As interest rates rose from 2004 to 2006,
7065-550: The Great Depression . This matters for credit decisions. A homeowner with equity in her home is very unlikely to default on a car loan or credit card debt. They will draw on this equity rather than lose their car and/or have a default placed on their credit record. On the other hand, a homeowner who has no equity is a serious default risk. In the case of businesses, their creditworthiness depends on their future profits. Profit prospects look much worse in November 2008 than they did in November 2007 ... While many banks are obviously at
7222-753: The Great Recession , which, at the time, was the most severe global recession since the Great Depression. It was also followed by the European debt crisis, which began with a deficit in Greece in late 2009, and the 2008–2011 Icelandic financial crisis , which involved the bank failure of all three of the major banks in Iceland and, relative to the size of its economy, was the largest economic collapse suffered by any country in history. It
7379-512: The John McCain campaign in 2008, when he was being vetted for the vice-presidential nomination. McCain said, "[n]othing in these tax returns showed that he did not pay taxes." In a 2015 interview on the subject, Reid said "Romney didn't win, did he?" The following year, Reid called the attack "one of the best things I've ever done," while reiterating that Romney had not released his tax returns. In 2021, Reid stated in an interview that after
7536-543: The Las Vegas Valley , was named after Reid on December 14, 2021, two weeks before his death from cancer. The airport was previously named after Pat McCarran , one of Reid's Senate predecessors. Harry Mason Reid Jr. was born on December 2, 1939, in Searchlight, Nevada , the third of four sons of Harry Reid, a rock miner, and Inez Orena (Jaynes) Reid, a laundress for local brothels. At that time, Searchlight
7693-467: The Senate Democratic majority controversially invoked the " nuclear option " to eliminate the 60-vote requirement to end a filibuster for presidential nominations , other than nominations to the U.S. Supreme Court . Republicans took control of the Senate following the 2014 United States Senate elections , and Reid served as Senate Minority Leader from 2015 until his retirement in 2017. Reid
7850-580: The Treasury Department to purchase troubled assets and bank stocks. The Fed began a program of quantitative easing by buying treasury bonds and other assets, such as MBS, and the February 2009 American Recovery and Reinvestment Act , signed by newly elected President Barack Obama , included a range of measures intended to preserve existing jobs and create new ones. Combined, the initiatives, coupled with actions taken in other countries, ended
8007-627: The U.S. Supreme Court . A 3/5 supermajority was still required to end filibusters unrelated to those nominees, such as for legislation and Supreme Court nominees. The Democrats' stated motivation for the " nuclear option " was expansion of filibustering by Republicans during the Obama administration , in particular blocking three nominations to the United States Court of Appeals for the District of Columbia Circuit . Reid's invocation of
SECTION 50
#17327903537808164-561: The United States House Committee on Financial Services held a hearing, at the urging of the administration, to assess safety and soundness issues and to review a recent report by the Office of Federal Housing Enterprise Oversight (OFHEO) that had uncovered accounting discrepancies within the two entities. The hearings never resulted in new legislation or formal investigation of Fannie Mae and Freddie Mac, as many of
8321-667: The United States House of Representatives , but population growth in the 1970s resulted in the state picking up a second district. Reid won the Democratic nomination for the 1st district , based in Las Vegas, in 1982, and easily won the general election. He was re-elected in 1984 . Reid was instrumental in the establishment of Great Basin National Park , sponsoring the bill creating it in 1986 and ensuring
8478-500: The concurrent Senate election . A veteran of the Reid political machine, Megan K. Jones , has gone on to be a senior advisor to Vice President and 2024 Democratic presidential candidate Kamala Harris . Harry Reid (formerly McCarran) International Airport , which serves the Las Vegas Valley , was named after Senator Reid on December 14, 2021, just two weeks prior to his death. Reid met his wife, Landra Gould, in high school. Gould
8635-481: The longest-serving U.S. Senator from Nevada . From 1999 to 2005, Reid served as Senate Democratic Whip , as minority whip from 1999 to 2001, and again from 2003 to 2005. Reid was majority whip from 2001 to 2003, except for a brief period from January to June 2001. He was the ranking member of the Environment and Public Works Committee in from January to June 2001 (succeeding Max Baucus ) before relinquishing
8792-501: The mortgage-backed security and the collateralized debt obligation that were assigned safe ratings by the credit rating agencies . In effect, Wall Street connected this pool of money to the mortgage market in the US, with enormous fees accruing to those throughout the mortgage supply chain , from the mortgage broker selling the loans to small banks that funded the brokers and the large investment banks behind them. By approximately 2003,
8949-403: The "buyer of last resort". During the fourth quarter of 2008, these central banks purchased US$ 2.5 (~$ 3.47 trillion in 2023) trillion of government debt and troubled private assets from banks. This was the largest liquidity injection into the credit market, and the largest monetary policy action in world history. Following a model initiated by the 2008 United Kingdom bank rescue package ,
9106-468: The "identification of several highly sensitive, unconventional aerospace-related findings" that will "likely lead to technology advancements" and recommends the creation of a special access program for specific parts of AATIP. On November 21, 2013, under Reid's tenure as Majority Leader, the Democratic majority Senate voted 52–48 to eliminate the 60-vote requirement to end a filibuster against all executive branch nominees and judicial nominees other than to
9263-485: The 110th Congress. He supported the DREAM Act (Development, Relief, and Education for Alien Minors Act), which would give certain high school graduates who had arrived in the U.S. illegally, conditional legal status so they could attend college or enlist in the military. They could then obtain permanent legal residency after completing two years of military service or two years of college. Reid supported use of force in
9420-470: The 12 supercommittee members to "go big" toward the $ 4 trillion in savings the NCFRR had recommended v. the $ 1.2 trillion deficit reduction most discussed by the committee of congresspeople and senators . Simpson and Bowles also warned that failure to reach some agreement "might result in another downgrade ", though separately Moody's said such failure alone would not result in a change in U.S. ratings, as
9577-605: The 2007 documentary film Sand and Sorrow , which details the genocide in Sudan . Reid was elected to the Gaming Hall of Fame in 2001. In 2013, adviser Jim Margolis said of Reid, "He is unique in this city. And you see it in so many different ways. Is he the best TV talking head? No. He'd be the first to tell you that. Should he smile more? Yes. Should he say goodbye on the phone when he's done talking to you? Probably. But those are things you'd assume are part and parcel of
SECTION 60
#17327903537809734-764: The 2008 financial crisis, consumer regulators in America have more closely supervised sellers of credit cards and home mortgages in order to deter anticompetitive practices that led to the crisis. At least two major reports on the causes of the crisis were produced by the U.S. Congress: the Financial Crisis Inquiry Commission report, released January 2011, and a report by the United States Senate Homeland Security Permanent Subcommittee on Investigations entitled Wall Street and
9891-541: The 2012 election he and Mitt Romney and their wives met privately and reconciled, with Reid concluding that "I admire Mitt Romney. I think he's a very very fine human being." Part of Reid's confrontation with Frank Rosenthal while chair of the Nevada Gaming Commission is reenacted in the 1995 movie Casino . Reid had a role in the movie Traffic (2000), in which he played himself. He appeared, with Senators Sam Brownback and Barack Obama , in
10048-529: The CRA. They contend that there were two, connected causes to the crisis: the relaxation of underwriting standards in 1995 and the ultra-low interest rates initiated by the Federal Reserve after the terrorist attack on September 11, 2001. Both causes had to be in place before the crisis could take place. Critics also point out that publicly announced CRA loan commitments were massive, totaling $ 4.5 trillion in
10205-528: The Church of Jesus Christ of Latter-day Saints while he was a college student. In a 2001 interview he said, "I think it is much easier to be a good member of the Church and a Democrat than a good member of the Church and a Republican." He went on to say that the Democrats' emphasis on helping others, as opposed to what he considered Republican dogma to the contrary, is the reason he was a Democrat. He delivered
10362-514: The Democratic nomination with 75% of the vote in the June 8 primary. He then faced a very competitive race for the U.S. Senate in Nevada in the 2010 general election . Reid engaged in a $ 1 million media campaign to "reintroduce himself" to the state's voters. He defeated Republican challenger Sharron Angle in the November election, 50.3% to 44.6%. In January 2015, Reid suffered severe injuries in an exercise accident. On March 27, 2015, Reid uploaded
10519-609: The Federal Reserve Alan Greenspan , Senator John McCain and Democratic Minority Whip Steny Hoyer . As time has gone on, there has been increased support for the plan, including some who initially opposed it such as former union leader Andy Stern and Democratic leader Nancy Pelosi . The plan was not universally praised. Commission member Jan Schakowsky, who voted against the Bowles-Simpson plan, released an alternative plan of her own, proposing
10676-491: The Financial Crisis: Anatomy of a Financial Collapse , released April 2011. In total, 47 bankers served jail time as a result of the crisis, over half of which were from Iceland , where the crisis was the most severe and led to the collapse of all three major Icelandic banks. In April 2012, Geir Haarde of Iceland became the only politician to be convicted as a result of the crisis. Only one banker in
10833-420: The House of Representatives Nancy Pelosi and Senate Majority Leader Harry Reid pledged to bring its recommendations for an up or down vote. The Commission included 18 members and one executive director appointed by the president. This included six members of the U.S. House of Representatives , and six members of the U.S. Senate. The first vote on the final recommendations, originally set for December 1, 2010,
10990-486: The LMI borrowers targeted by the CRA, especially in the years 2005–2006 leading up to the crisis, nor did it find any evidence that lending under the CRA rules increased delinquency rates or that the CRA indirectly influenced independent mortgage lenders to ramp up sub-prime lending. To other analysts the delay between CRA rule changes in 1995 and the explosion of subprime lending is not surprising, and does not exonerate
11147-464: The Medicare physicians pay freeze would continue and war spending would decrease based on current administration policy. The final plan was broken down into six major components (savings are 2012–2020): The plan also proposed an additional $ 673 billion in savings, due to lower projected spending interest payments as a result from lower deficits. The plan, released on December 1, 2010, fell short of
11304-727: The Middle East, but in September 2007, called for a drastic change in strategy. In January 1991, Reid voted to authorize the first Gulf War , quoting John F. Kennedy 's 1963 State of the Union speech on the Senate floor, saying "the mere absence of war is not peace." He also voted in support of the 2003 invasion of Iraq . In March 2007, he voted in favor of "redeploying U.S. troops out of Iraq by March 2008", and later that year, said, "As long as we follow [President Bush's] path in Iraq,
11461-650: The Prevention First Amendment with Hillary Clinton , which would fund abortion prevention efforts such as giving women broader access to contraception. The bill faced Republican opposition and failed. In January 2007, Reid brought a Senate ethics reform bill to a vote to bar congressional members from accepting gifts, meals, and trips from lobbyists and organizations employing lobbyists, to bar Senators from borrowing corporate jets for travel, and to compel Senators to disclose names of sponsors, or authors, of bills and projects. The bill passed 96–2. In
11618-600: The SEC's December 2011 securities fraud case against six former executives of Fannie and Freddie, Peter Wallison and Edward Pinto estimated that, in 2008, Fannie and Freddie held 13 million substandard loans totaling over $ 2 trillion. In the early and mid-2000s, the Bush administration called numerous times for investigations into the safety and soundness of the GSEs and their swelling portfolio of subprime mortgages. On September 10, 2003,
11775-481: The Senate Republicans had previously refused to take up Merrick Garland 's nomination by President Obama in 2016. Reid was criticized during his tenure for several potentially self-enriching tactics. In 2005, Reid earmarked a spending bill to provide for building a bridge between Nevada and Arizona that would make land he owned more valuable. Reid called funding for the construction of a bridge over
11932-608: The Senate after the 2006 United States Senate elections , and Reid became the Senate Majority Leader in 2007. He held that position for the final two years of George W. Bush 's presidency and for the first six years of Barack Obama 's presidency. As majority leader, Reid helped pass major legislation of the Obama administration , such as the Affordable Care Act , the Dodd–Frank Act , and the American Recovery and Reinvestment Act of 2009 . In 2013, under Reid's leadership,
12089-535: The Simpson-Bowles proposal because it would raise taxes. The original proposal for a commission came from bipartisan legislation that would have required Congress to vote on its recommendations as presented, without any amendment. In January 2010, that bill failed in the Senate by a vote of 53–46, when six Republicans who had co-sponsored it nevertheless voted against it. Thereafter, President Obama established
12246-596: The U.S. Senate seat that was being vacated by Alan Bible . He lost by fewer than 700 votes to former governor Paul Laxalt . In 1975, Reid ran for mayor of Las Vegas and lost to Bill Briare . Reid served as chairman of the Nevada Gaming Commission from 1977 to 1981. When Jack Gordon offered Reid a $ 12,000 bribe to get approval of new games for casinos, Reid brought in the FBI to tape Gordon's bribery attempt and arrest him. After FBI agents interrupted
12403-474: The U.S. housing market, were on the verge of collapse; the Housing and Economic Recovery Act enabled the government to take over and cover their combined $ 1.6 trillion debt on September 7. In response to the growing crisis, governments around the world deployed massive bail-outs of financial institutions and other monetary and fiscal policies to prevent a collapse of the global financial system . After
12560-549: The U.S. to borrow money from abroad, in the process bidding up bond prices and lowering interest rates. Bernanke explained that between 1996 and 2004, the U.S. current account deficit increased by $ 650 billion, from 1.5% to 5.8% of GDP. Financing these deficits required the country to borrow large sums from abroad, much of it from countries running trade surpluses. These were mainly the emerging economies in Asia and oil-exporting nations. The balance of payments identity requires that
12717-553: The United States Senate and mayor of Las Vegas , Reid served as chairman of the Nevada Gaming Commission from 1977 to 1981. From 1983 to 1987, Reid represented Nevada's 1st district in the United States House of Representatives . Reid was elected to the United States Senate in 1986 and served in the Senate from 1987 to 2017. He served as the Senate Democratic whip from 1999 to 2005 before succeeding Tom Daschle as Senate Minority Leader. The Democrats won control of
12874-409: The United States did not have wealth declines at all during the crisis because they generally did not own financial investments whose value can fluctuate. The Federal Reserve surveyed 4,000 households between 2007 and 2009, and found that the total wealth of 63% of all Americans declined in that period and 77% of the richest families had a decrease in total wealth, while only 50% of those on the bottom of
13031-487: The United States served jail time as a result of the crisis, Kareem Serageldin , a banker at Credit Suisse who was sentenced to 30 months in jail and returned $ 24.6 million in compensation for manipulating bond prices to hide $ 1 billion of losses. No individuals in the United Kingdom were convicted as a result of the crisis. Goldman Sachs paid $ 550 million to settle fraud charges after allegedly anticipating
13188-421: The accusation on the Senate floor on August 2, 2012. According to CBS News , Romney stated, "Let me also say, categorically, I have paid taxes every year – and a lot of taxes. So Harry is simply wrong." PolitiFact.com 's Truth-O-Meter rated the accusation as "Pants on Fire!" The Washington Post ' s Fact Checker gave it "Four Pinnocchios". CBS reported that Romney had submitted 23 years of tax returns to
13345-515: The aftermath of publicity surrounding the AATIP, Reid expressed pride in his accomplishment, and was quoted as saying "I think it's one of the good things I did in my congressional service. I've done something that no one has done before." Reid explained the reasoning behind his sponsorship of the program by saying "I'm interested in science, and in helping the American public understand what the hell
13502-559: The bailout to Fannie Mae and Freddie Mac exceeds $ 300 billion (c. $ 401 billion in 2023 ) (calculated by adding the fair value deficits of the entities to the direct bailout funds at the time). Economist Paul Krugman argued in January 2010 that the simultaneous growth of the residential and commercial real estate pricing bubbles and the global nature of the crisis undermines the case made by those who argue that Fannie Mae, Freddie Mac, CRA, or predatory lending were primary causes of
13659-535: The bailouts, such as in the case of the AIG bonus payments controversy , leading to the development of a variety of "decision making frameworks", to help balance competing policy interests during times of financial crisis. Alistair Darling , the U.K.'s Chancellor of the Exchequer at the time of the crisis, stated in 2018 that Britain came within hours of "a breakdown of law and order" the day that Royal Bank of Scotland
13816-486: The bankruptcy of Lehman Brothers , the fourth largest U.S. investment bank, on September 15, the next day the Fed bailed out the American International Group (the largest U.S. insurance company), and on September 25 the government seized Washington Mutual (the largest savings and loan firm ). On October 3, Congress passed the $ 800 billion Emergency Economic Stabilization Act , which authorized
13973-726: The brink, consumers and businesses would be facing a much harder time getting credit right now even if the financial system were rock solid. The problem with the economy is the loss of close to $ 6 trillion in housing wealth and an even larger amount of stock wealth. ... the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity
14130-696: The bubble burst, Australian economist John Quiggin wrote, "And, unlike the Great Depression, this crisis was entirely the product of financial markets. There was nothing like the postwar turmoil of the 1920s, the struggles over gold convertibility and reparations, or the Smoot-Hawley tariff , all of which have shared the blame for the Great Depression." Instead, Quiggin lays the blame for the 2008 near-meltdown on financial markets, on political decisions to lightly regulate them, and on rating agencies which had self-interested incentives to give good ratings. Lower interest rates encouraged borrowing. From 2000 to 2003,
14287-436: The commission by Executive Order 13531 . Former Republican Senator Alan Simpson (Wyo.), after his appointment to co-chair the commission, criticized the former supporters who had voted against the bill, saying that their purpose "was to stick it to the president." In the absence of special legislation, the commission's proposals are not guaranteed to be considered by Congress in a single up-or-down vote, although then-Speaker of
14444-463: The commission's blueprint. Proponents of the plan praised it for hitting all parts of the federal budget and for putting the national debt on a stable and then downward path. Prominent supporters include JPMorgan Chase CEO Jamie Dimon , House Speaker Nancy Pelosi (although at first she opposed the proposal), then- Secretary of State Hillary Clinton , and Republican Senator Tom Coburn ; Democratic Representative Chris Van Hollen has called for
14601-501: The committee members refused to accept the report and instead rebuked OFHEO for their attempt at regulation. Some, such as Wallison, believe this was an early warning to the systemic risk that the growing market in subprime mortgages posed to the U.S. financial system that went unheeded. A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $ 467 billion of mortgage lending
14758-708: The conference. In 2015, Reid received a lifetime achievement award from the League of Conservation Voters , and the following year he was honored by the Conservation Lands Foundation for "historic contributions to conservation." During the summer of 2012, Reid said in an interview with The Huffington Post that he had received information from an unidentified investor in Bain Capital that presumptive Republican presidential nominee Mitt Romney did not pay any taxes for 10 years. He repeated
14915-589: The cost of mortgages rose and the demand for housing fell, causing property values to decline. In early 2007, as more U.S. mortgage holders began defaulting on their repayments, subprime lenders went bankrupt, culminating in April with the bankruptcy of New Century Financial . As demand and prices continued to fall, the contagion spread to worldwide credit markets by August, and central banks began injecting liquidity . By July 2008, Fannie Mae and Freddie Mac , companies which together owned or guaranteed half of
15072-403: The crisis and selling toxic investments to its clients. With fewer resources to risk in creative destruction, the number of patent applications was flat, compared to exponential increases in patent application in prior years. Typical American families did not fare well, nor did the "wealthy-but-not-wealthiest" families just beneath the pyramid's top. However, half of the poorest families in
15229-446: The crisis in commercial real estate and related lending took place after the crisis in residential real estate. Business journalist Kimberly Amadeo reported: "The first signs of decline in residential real estate occurred in 2006. Three years later, commercial real estate started feeling the effects." Denice A. Gierach, a real estate attorney and CPA, wrote: ... most of the commercial real estate loans were good loans destroyed by
15386-465: The crisis included predatory lending in the form of subprime mortgages to low-income homebuyers and a resulting housing bubble , excessive risk-taking by global financial institutions , and lack of regulatory oversight, which culminated in a " perfect storm " that triggered the Great Recession , which lasted from late 2007 to mid-2009. The financial crisis began in early 2007, as mortgage-backed securities (MBS) tied to U.S. real estate , as well as
15543-437: The crisis was not only confined to the Federal Reserve 's provision of aid to individual financial institutions. The Federal Reserve has also conducted a number of innovative lending programs with the goal of improving liquidity and strengthening different financial institutions and markets, such as Freddie Mac and Fannie Mae . In this case, the major problem among the market is the lack of free cash reserves and flows to secure
15700-591: The crisis. As part of national fiscal policy response to the Great Recession , governments and central banks, including the Federal Reserve , the European Central Bank and the Bank of England , provided then-unprecedented trillions of dollars in bailouts and stimulus , including expansive fiscal policy and monetary policy to offset the decline in consumption and lending capacity, avoid
15857-509: The crisis. In other words, bubbles in both markets developed even though only the residential market was affected by these potential causes. Countering Krugman, Wallison wrote: "It is not true that every bubble—even a large bubble—has the potential to cause a financial crisis when it deflates." Wallison notes that other developed countries had "large bubbles during the 1997–2007 period" but "the losses associated with mortgage delinquencies and defaults when these bubbles deflated were far lower than
16014-603: The current fiscal situation such as the fiscal cliff at the end of 2012 and are widely quoted in the press on fiscal issues. In addition, Simpson and Bowles have helped form two organizations that are working in part for their plan—the Moment of Truth Project and the Campaign to Fix the Debt. Finally, some aspects of the Simpson–Bowles plan have become law. The Budget Control Act of 2011 included discretionary spending caps, albeit at
16171-501: The deficit by $ 4 trillion, reformed Social Security and the tax code and included health-care savings and an illustrative savings of $ 200 billion of discretionary cuts. After the chairmen's briefing to the commission members, two Democratic Party members, Senator Durbin and Representative Schakowsky, publicly criticized the plan. Senator Kent Conrad (D-ND), however, declined to criticize the proposal, saying "[i]nstead of shooting this down propose an alternative. But one that does as good
16328-792: The designation of about 5.1 million acres (21,000 km ) of U.S. federal land in Nevada as protected land, shielding them from development. Among these were the Tule Springs Fossil Beds National Monument , the Basin and Range National Monument , and the Gold Butte National Monument . Reid was also the champion of the Southern Nevada Public Lands Management Act, 1998 legislation that has redirected more than $ 4 billion in proceeds from
16485-469: The end of the first quarter of 2009, resulting in a decline in consumption, then a decline in business investment. In the fourth quarter of 2008, the quarter-over-quarter decline in real GDP in the U.S. was 8.4%. The U.S. unemployment rate peaked at 11.0% in October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate. The average hours per work week declined to 33, the lowest level since
16642-557: The end product." Essentially, investment banks and hedge funds used financial innovation to enable large wagers to be made, far beyond the actual value of the underlying mortgage loans, using derivatives called credit default swaps, collateralized debt obligations and synthetic CDOs . By March 2011, the FDIC had paid out $ 9 billion (c. $ 12 billion in 2023 ) to cover losses on bad loans at 165 failed financial institutions. The Congressional Budget Office estimated, in June 2011, that
16799-496: The eve of the first Commission meeting. Simpson's latter appearance, particularly as it bore on entitlements , attracted comment from the Columbia Journalism Review and James Ridgeway , among others. On November 10, co-chairs Simpson and Bowles released a draft proposal for consideration by other commission members providing the basis for the final report to be released later. The co-chairs proposal reduced
16956-524: The federal gasoline tax ). The commission's recommendations were politically controversial. Under the executive order that created the commission, a supermajority of 14 of the 18 commissioners had to agree to a recommendation before it was sent to Congress for a vote. In a vote in December 2010, the commission fell short of that requirement, with only 11 out of the 18 commissioners (five Republicans , five Democrats , and one independent) voting to endorse
17113-400: The federal deficit by nearly $ 4 trillion, stabilizing the growth of debt held by the public by 2014, reduce debt 60 percent by 2023 and 40 percent by 2035. Outlays would equal 21.6 percent of GDP in 2015, compared to 23.8 percent in 2010 and would fall to 21.0 percent by 2035. Revenues would rise from 14.9 percent in 2010 to 19.3 percent in 2015 and would equal 21.0 percent in 2035. Built off
17270-473: The federal funds rate to drop below where it was supposed to be. However, in October 2008, the Federal Reserve was granted the power to provide banks with interest payments on their surplus reserves. This created a motivation for banks to retain their reserves instead of disbursing them, so reducing the need for the Federal Reserve to hedge its increased lending by decreases in alternative assets. Money market funds also went through runs when people lost faith in
17427-426: The financial system and got banks to start lending again, both to each other and to people. Many homeowners who were trying to keep their homes from going into default got housing credits. A package of policies was passed that let borrowers refinance their loans even though the value of their homes was less than what they still owed on their mortgages . While the causes of the bubble and subsequent crash are disputed,
17584-592: The fiscal situation in the medium term and to achieve fiscal sustainability over the long run". The 18-member Commission, consisting of 12 members of Congress and six private citizens, first met on April 27, 2010. A report was released on December 1, recommending a combination of spending cuts (including an increase in the Social Security retirement age and cuts to military, benefit, and domestic spending) and tax increases (including restricting or eliminating certain tax credits and deductions and increasing
17741-457: The government began collecting the data in 1964. The economic crisis started in the U.S. but spread to the rest of the world. U.S. consumption accounted for more than a third of the growth in global consumption between 2000 and 2007 and the rest of the world depended on the U.S. consumer as a source of demand. Toxic securities were owned by corporate and institutional investors globally. Derivatives such as credit default swaps also increased
17898-506: The governments of European nations and the United States guaranteed the debt issued by their banks and raised the capital of their national banking systems, ultimately purchasing $ 1.5 trillion newly issued preferred stock in major banks. The Federal Reserve created then-significant amounts of new currency as a method to combat the liquidity trap . Bailouts came in the form of trillions of dollars of loans, asset purchases, guarantees, and direct spending. Significant controversy accompanied
18055-421: The higher payments associated with rising interest rates and began to default. During 2007, lenders began foreclosure proceedings on nearly 1.3 million properties, a 79% increase over 2006. This increased to 2.3 million in 2008, an 81% increase vs. 2007. By August 2008, approximately 9% of all U.S. mortgages outstanding were either delinquent or in foreclosure. By September 2009, this had risen to 14.4%. After
18212-489: The late senators Ted Stevens (R-Alaska) and Daniel Inouye (D-Hawaii). The program began in the DIA in 2007 and was budgeted $ 22 million over its five years of operation. The United States Air Force facility Homey Airport, commonly known as Area 51, is located on Groom Lake in Reid's home state of Nevada, and has been rumored to house materials allegedly retrieved from the 1947 Roswell UFO incident. When interviewed in
18369-578: The linkage between large financial institutions. The de-leveraging of financial institutions, as assets were sold to pay back obligations that could not be refinanced in frozen credit markets, further accelerated the solvency crisis and caused a decrease in international trade. Reductions in the growth rates of developing countries were due to falls in trade, commodity prices, investment and remittances sent from migrant workers (example: Armenia ). States with fragile political systems feared that investors from Western states would withdraw their money because of
18526-505: The loans. The Federal Reserve took a number of steps to deal with worries about liquidity in the financial markets. One of these steps was a credit line for major traders, who act as the Fed's partners in open market activities. Also, loan programs were set up to make the money market mutual funds and commercial paper market more flexible. Also, the Term Asset-Backed Securities Loan Facility (TALF)
18683-428: The losses suffered in the United States when the 1997–2007 [bubble] deflated." According to Wallison, the reason the U.S. residential housing bubble (as opposed to other types of bubbles) led to financial crisis was that it was supported by a huge number of substandard loans—generally with low or no downpayments. Krugman's contention (that the growth of a commercial real estate bubble indicates that U.S. housing policy
18840-650: The majority report of the Financial Crisis Inquiry Commission, conservative American Enterprise Institute fellow Peter J. Wallison stated his belief that the roots of the financial crisis can be traced directly and primarily to affordable housing policies initiated by the United States Department of Housing and Urban Development (HUD) in the 1990s and to massive risky loan purchases by government-sponsored entities Fannie Mae and Freddie Mac. Based upon information in
18997-599: The market. To keep it from getting worse, the Fed said it would give money to mutual fund companies. Also, Department of Treasury said that it would briefly cover the assets of the fund. Both of these things helped get the fund market back to normal, which helped the commercial paper market, which most businesses use to run. The FDIC also did a number of things, like raise the insurance cap from $ 100,000 to $ 250,000, to boost customer trust. They engaged in Quantitative Easing , which added more than $ 4 trillion to
19154-418: The midst of a statewide Republican sweep. In 2004 , Reid won reelection with 61 percent of the vote, defeating Richard Ziser . Ensign was elected to Nevada's other Senate seat in 2000. Ensign and Reid had a very good relationship despite their bitter contest in 1998. The two frequently worked together on Nevada issues until Ensign resigned his Senate seat in 2011 due to an ethics scandal. In 2010, Reid won
19311-683: The near-term." The chairmen's proposal was also criticized by conservative interest groups such as defense contractors, for cutting spending on defense , and Americans for Tax Reform , a group opposed to both increases in marginal rates and overall Federal revenue. The proposal was better received by the Democrat-affiliated think tank Third Way , the Progressive Policy Institute, Representative Jim Cooper (D-Tenn.), Senator Ron Wyden (D-Oregon) and Harvard economist Greg Mankiw . Senator-elect Rand Paul (R-KY),
19468-512: The nuclear option on judicial nominations was controversial as, on April 6, 2017, Senate Republicans similarly invoked the nuclear option to remove the Supreme Court exception created in 2013, allowing the Trump administration to appoint Justices on party lines. This was after Senate Democrats filibustered the nomination of Neil Gorsuch to the Supreme Court of the United States and after
19625-427: The plan saying it cut spending, especially on Social Security, too much. The Economic Policy Institute calculated that the proposed spending cuts would reduce payroll employment by roughly 1.9 million jobs by 2014, and that the resulting loss in the government's tax revenues would cut the proposal's deficit-reducing effect in half. The institute called instead for "budgeting for more desperately needed fiscal stimulus in
19782-494: The plan, "the Commission released not only a credible plan, but an excellent plan. Of course it is filled with things people don't like—that is the nature of deficit reduction. And yet the plan received bipartisan support from a majority of the Commission at a time where, up until now, fiscal leadership has been in short supply" Other prominent supporters of the plan include New York mayor Michael Bloomberg , former Chairmen of
19939-619: The position to allow Jim Jeffords to switch parties and become chair, having given Democrats the majority. From 2001 to 2003, he served as chairman of the Senate Ethics Committee . Reid succeeded Tom Daschle as Minority Leader in 2005; he became Majority Leader after the 2006 election until 2015. He was again Minority Leader until his retirement in 2017 and was succeeded by Chuck Schumer . Liberal critics argued that Reid allowed Senate Republicans to create
20096-588: The precipitating factor for the Financial Crisis of 2007–2008 was the bursting of the United States housing bubble and the subsequent subprime mortgage crisis , which occurred due to a high default rate and resulting foreclosures of mortgage loans , particularly adjustable-rate mortgages . Some or all of the following factors contributed to the crisis: The relaxing of credit lending standards by investment banks and commercial banks allowed for
20253-501: The price appreciation. In a Peabody Award -winning program, NPR correspondents argued that a "Giant Pool of Money" (represented by $ 70 trillion in worldwide fixed income investments) sought higher yields than those offered by U.S. Treasury bonds early in the decade. This pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with products such as
20410-451: The promotion of thousands of small mortgage brokers, and by their close relationship to subprime loan aggregators such as Countrywide . Depending on how "subprime" mortgages are defined, they remained below 10% of all mortgage originations until 2004, when they rose to nearly 20% and remained there through the 2005–2006 peak of the United States housing bubble . The majority report of the Financial Crisis Inquiry Commission , written by
20567-463: The protection of Wheeler Peak and groves of bristlecone pine . In 1986 , Reid won the Democratic nomination for the seat of retiring two-term incumbent Republican Senator Paul Laxalt . Reid defeated former at-large U.S. Representative Jim Santini , a Democrat who had turned Republican, in the November election. Reid ran for reelection in 1992 which he won by a double-digit margin. In 1998 he narrowly defeated U.S. Representative John Ensign in
20724-400: The pyramid suffered a decrease. The following is a timeline of the major events of the financial crisis, including government responses, and the subsequent economic recovery. There is a really good reason for tighter credit. Tens of millions of homeowners who had substantial equity in their homes two years ago have little or nothing today. Businesses are facing the worst downturn since
20881-416: The relatively conservative government-sponsored enterprises (GSEs) policed mortgage originators and maintained relatively high underwriting standards prior to 2003. However, as market power shifted from securitizers to originators, and as intense competition from private securitizers undermined GSE power, mortgage standards declined and risky loans proliferated. The riskiest loans were originated in 2004–2007,
21038-550: The sale of public lands in Nevada to conservation initiatives, environmentally sensitive land acquisitions, new parks and trails, and capital projects for federal land management agencies. Reid was criticized as one of the main culprits for the failure of the 2009 United Nations Climate Change Conference , as the Democrats ' majority in Congress during that time had not been used to enact climate-protection legislation prior to
21195-610: The six Democratic appointees, the minority report, written by three of the four Republican appointees, studies by Federal Reserve economists, and the work of several independent scholars generally contend that government affordable housing policy was not the primary cause of the financial crisis. Although they concede that governmental policies had some role in causing the crisis, they contend that GSE loans performed better than loans securitized by private investment banks, and performed better than some loans originated by institutions that held loans in their own portfolios. In his dissent to
21352-516: The staff at the condominium where he resided; federal election law prohibits candidates from using political donations for personal use. Reid's staff stated that his campaign attorneys had approved this use of the funds, but that Reid would personally reimburse his campaign for the expenses. Citizens United filed a complaint with the Federal Election Commission to investigate the matter. A series of investigative reports in
21509-470: The summer of 2011. A Senate "Gang of Six", with Senators Mark Warner, Kent Conrad, Richard Durbin, Tom Coburn, Mike Crapo and Saxby Chambliss , was formed attempting to forge a consensus on deficit reduction. Later, Senators Mike Bennett and Mike Johans. The Gang of 6 released their plan during the summer of 2011, during the Debt Ceiling negotiations, but since then has continued to work on ways to forge
21666-464: The supply of mortgages originated at traditional lending standards had been exhausted, and continued strong demand began to drive down lending standards. The collateralized debt obligation in particular enabled financial institutions to obtain investor funds to finance subprime and other lending, extending or increasing the housing bubble and generating large fees. This essentially places cash payments from multiple mortgages or other debt obligations into
21823-426: The time of the commission, the co-chairs spent time holding public hearings and appearing on various media outlets. There were six public meetings of testimony and deliberation of the commission, with numerous private ones. In April 2010, Al Simpson was interviewed by Neil Cavuto on Fox News , covering tax-vs-spending balance in the commission's work. Simpson and Bowles were also interviewed by Chris Wallace on
21980-596: The transaction, as prearranged, Reid lost his temper and attempted to choke Gordon, saying "You son of a bitch, you tried to bribe me!" before agents stopped him. Gordon was convicted in 1979 and sentenced to six months in prison. Reid presided over the 1979 hearing that refused to issue a gaming license to casino operator Frank Rosenthal because of his ties to organized crime groups such as the Chicago Outfit and particularly his close personal association with mobster Anthony Spilotro . Reid later stated that "Rosenthal
22137-434: The trigger would still result in $ 1.2 trillion in cuts. In that regard, Simpson and Bowles stated, "the only thing worse than failure by the committee to agree on savings would be removing the 'sequester' [or 'trigger' ] mechanism for automatic cuts". Bowles said in verbal testimony that "[c]ollectively, I'm worried you're going to fail". Both Simpson and Bowles have appeared on numerous media outlets discussing their plan and
22294-601: The war is lost." Reid was a strong advocate of recognizing the Armenian genocide . Reid was a staunch defender of Obamacare both online and in speeches. He advocated outlawing prostitution in Nevada . On May 15, 2013, Reid revealed to reporters that his niece is a lesbian as he spoke about his hope that the Employment Non-Discrimination Act would be signed into law. Reid supported land conservation in Nevada. He successfully secured
22451-545: The worst of the Great Recession by mid-2009. Assessments of the crisis's impact in the U.S. vary, but suggest that some 8.7 million jobs were lost, causing unemployment to rise from 5 percent in 2007 to a high of 10 percent in October 2009. The percentage of citizens living in poverty rose from 12.5 percent in 2007 to 15.1 percent in 2010. The Dow Jones Industrial Average fell by 53 percent between October 2007 and March 2009, and some estimates suggest that one in four households lost 75 percent or more of their net worth . In 2010,
22608-622: The years between 1994 and 2007. They also argue that the Federal Reserve's classification of CRA loans as "prime" is based on the faulty and self-serving assumption that high-interest-rate loans (3 percentage points over average) equal "subprime" loans. Others have pointed out that there were not enough of these loans made to cause a crisis of this magnitude. In an article in Portfolio magazine, Michael Lewis spoke with one trader who noted that "There weren't enough Americans with [bad] credit taking out [bad loans] to satisfy investors' appetite for
22765-464: The years of the most intense competition between securitizers and the lowest market share for the GSEs. The GSEs eventually relaxed their standards to try to catch up with the private banks. A contrarian view is that Fannie Mae and Freddie Mac led the way to relaxed underwriting standards, starting in 1995, by advocating the use of easy-to-qualify automated underwriting and appraisal systems, by designing no-down-payment products issued by lenders, by
22922-527: Was a small, impoverished town. His father died of suicide in 1972, at the age of 58, when Harry was 32 years old. His paternal grandmother was an English immigrant from Darlaston, Staffordshire . Reid's boyhood home was a shack with no indoor toilet, hot water or telephone. Since Searchlight had no high school, Reid boarded with relatives 40 miles (64 km) away, in Henderson , so that he could attend Basic High School , where he played football and
23079-524: Was among the five worst financial crises the world had experienced and led to a loss of more than $ 2 trillion from the global economy. U.S. home mortgage debt relative to GDP increased from an average of 46% during the 1990s to 73% during 2008, reaching $ 10.5 (~$ 14.6 trillion in 2023) trillion. The increase in cash out refinancings , as home values rose, fueled an increase in consumption that could no longer be sustained when home prices declined. Many financial institutions owned investments whose value
23236-478: Was an amateur boxer . While at Basic High, he met future Nevada governor Mike O'Callaghan , who was a teacher there and served as Reid's boxing coach. Reid attended Southern Utah University and graduated from Utah State University in 1961, where he double-majored in political science and history. He also minored in economics at Utah State's School of Commerce and Business Administration . He then attended George Washington University Law School while working as
23393-450: Was bailed-out. Instead of financing more domestic loans, some banks instead spent some of the stimulus money in more profitable areas such as investing in emerging markets and foreign currencies. In July 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act was enacted in the United States to "promote the financial stability of the United States". The Basel III capital and liquidity standards were adopted worldwide. Since
23550-542: Was based on home mortgages such as mortgage-backed securities , or credit derivatives used to insure them against failure, which declined in value significantly. The International Monetary Fund estimated that large U.S. and European banks lost more than $ 1 trillion on toxic assets and from bad loans from January 2007 to September 2009. Lack of investor confidence in bank solvency and declines in credit availability led to plummeting stock and commodity prices in late 2008 and early 2009. The crisis rapidly spread into
23707-444: Was delayed until December 3 when the commission fell short of the supermajority of 14 of 18 votes needed to approve the report. The eleven voting for it were five Democrats (Bowles, Conrad, Durbin, Rivlin, Spratt) and five Republicans (Coburn, Cote, Crapo, Gregg, Simpson) and one Independent (Fudge); the seven voting against it were four Democrats (Baucus, Becerra, Schakowsky, Stern) and three Republicans (Camp, Hensarling, Ryan). During
23864-603: Was from a Jewish family and her parents objected to the relationship because Reid was not Jewish. The two eloped in 1959 when they were in college. The Reids had five children; a daughter and four sons. Their eldest son, Rory , was an elected commissioner for Clark County, Nevada , of which he became chairman, and 2010 Democratic nominee in the election for Governor of Nevada . Another son, Josh Reid, unsuccessfully sought municipal office in Cottonwood Heights, Utah . In 2014 financial disclosure reports, Reid reported
24021-550: Was made by Community Reinvestment Act (CRA)-covered lenders into low and mid-level income (LMI) borrowers and neighborhoods, representing 10% of all U.S. mortgage lending during the period. The majority of these were prime loans. Sub-prime loans made by CRA-covered institutions constituted a 3% market share of LMI loans in 1998, but in the run-up to the crisis, fully 25% of all subprime lending occurred at CRA-covered institutions and another 25% of subprime loans had some connection with CRA. However, most sub-prime loans were not made to
24178-461: Was not the cause of the crisis) is challenged by additional analysis. After researching the default of commercial loans during the financial crisis, Xudong An and Anthony B. Sanders reported (in December 2010): "We find limited evidence that substantial deterioration in CMBS [commercial mortgage-backed securities] loan underwriting occurred prior to the crisis." Other analysts support the contention that
24335-522: Was put in place thanks to a joint effort with the US Department of the Treasury. This plan was meant to make it easier for consumers and businesses to get credit by giving Americans who owned high-quality asset-backed securities more credit. Before the crisis, the Federal Reserve's stocks of Treasury securities were sold to pay for the increase in credit. This method was meant to keep banks from trying to give out their extra savings, which could cause
24492-441: Was the only person that I was ever afraid of." Rosenthal loudly and publicly confronted Reid after the hearing, telling gathered reporters that he had performed many personal favors for Reid. Reid conceded under heated interrogation from Rosenthal that the two men had met for lunch at his Stardust Resort and Casino and that he had asked Rosenthal to cover up undesirable news stories. FBI wiretaps captured mobsters claiming that Reid
24649-421: Was under their control, causing governor Robert List to feel pressure to ask Reid to resign. However, List believed Reid's assertions that the accusations were baseless. In 1981, Reid's wife found a bomb attached to the family station wagon; Reid suspected it was placed by Rosenthal or Gordon, although this has never been proven in court. Before the 1980 Census , Nevada had only a single at-large member of
#779220