Matt Stoller at Open Left has reproduced a letter from progressive Democrats in the Congress demanding changes to the proposed bailout package. Barbara Lee and Lynn Woolsey are the two lead authors, and other California members of Congress who have signed it include Hilda Solis and Pete Stark.

The letter insists that 4 kinds of reform be included in any bailout:

• A 0.25% tax on all stock trades and "exotic transactions" such as derivatives trading as a kind of "progressive PAYGO" to ensure that the taxpayers won't be paying the costs of the bailout.



• Equity shares in any companies that benefit from the bailout



• "Major bankruptcy reform" including homeowner renegotiation of mortgages. Obama undercut progressives on this when he said bankruptcy reform didn't need to be part of the package, perhaps a telltale sign of how unprogressive an Obama administration might be. But it's still a necessary part of any financial solution.



• A detailed list of new regulations to protect consumers and provide more stable, responsible regulation of the financial industry to prevent a recurrence of this crisis.

The progressives' move in Congress comes as more economic observers question the need for a bailout. It's possible that this represents the first move by the 74 members of the Progressive Caucus to block a bill that in particular lacks bankruptcy reform. Even so, an axis of Bush Dogs, House Republicans, and timid/weak/complicit House Democratic leadership may prove to be too much for the Progressive Caucus to overcome.

Still, this letter is a welcome move by California progressives like Barbara Lee and Lynn Woolsey. The bailout needs to be either made a fundamentally progressive policy move or stopped entirely. If a progressive coalition is to come together to stop it leadership from the Progressive Caucus is a necessary component. Even if it is too little too late, it potentially marks the beginning of a push for truly progressive solutions to our economic crisis - the kind that FDR and the Democratic Party stood for 75 years ago, but that current Democratic leaders from Obama on down have now eschewed.