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Dear Mr. [deleted for security reasons]:
Thank you for contacting me with your views regarding the Emergency Economic Stabilization Act, which was passed by the Senate on October 1, 2008. This bill was subsequently passed by the House of Representatives and signed into law on October 3, 2008. I appreciate the extraordinary amount of input I have received on this issue – much frustration and angst, as well as expert opinions – and I used this valuable input as I worked with my colleagues to improve this bill. The original bill sent to Congress by the Bush Administration was unacceptable.
Our nation’s economy is in crisis, the likes of which we haven’t seen since the 1930s. For years, we have traveled a disturbing path: foreclosures and unemployment are up while median income and purchasing power are down. CEO pay has skyrocketed while regular Americans are suffering. Economic growth has slowed because tight credit has forced businesses large and small to put investments for the future on hold while they focus on making sure they have capital to buy inventory or even make payroll. But in just the last few weeks, we have seen that this path is leading to a cliff, and we needed to act quickly to prevent our economy from sliding over the edge.
The reasons we are near this cliff are many. The path we have traveled has been marked by an appalling lack of oversight by the regulators of the marketplace. Wall Street has run amok with greed while the Bush Administration and others urged them on in the name of deregulation. As in the run-up to the Great Depression, our free markets are running wild. We have reduced capital requirements, removed the authority of the Securities and Exchange Commission to regulate swaps, and speculators took over the majority of some commodity trading, like oil. Cops have been taken off the beat in our financial markets; stoplights to put a hold on free markets running wild have been dismantled; and now, regular Americans are suffering, and face even more dire consequences. There is plenty of blame to go around, and the excesses that continue to surface as this unfolds will no doubt be shocking. In the immediate term, however, the most pressing issue is how we turn our unstable economic situation around to avoid an even more dire result.
Without this swift Congressional action, pensions and savings could quickly be decimated by a wrecked stock market, and Americans could suffer through significant job losses and have less ability to buy everything from groceries to a new car or house. Small businesses and even large ones could see their access to capital further reduced, home mortgages could become even more difficult to acquire or refinance, foreclosures could further skyrocket, and auto and student loans could be much more difficult to obtain. Construction jobs would likely disappear, automakers would cut back even further on production and lay off workers, and retail and service jobs would be cut. Retirees who are counting on a 401(k) or other type of pension could see their nest eggs shattered. If the stock market crashes, investments – even those made years or decades ago in supposedly “safe” assets – would be drowned.
It is clear to me that we cannot allow our nation’s economy to fall off this cliff. Doing nothing was not an option. I reluctantly voted for this rescue plan, because it is not entirely clear that it will unlock enough credit and stop enough foreclosures to turn things around. It is also evident that this plan only includes the first steps toward getting regulatory cops back on the beat to make sure our markets are not allowed to continue running wild. But there also was no better alternative at this time. I voted for this plan with the hope that getting capital into faltering financial institutions will restore flexibility and credit to businesses and consumers before Americans suffer even greater consequences. In addition, if done right, the government can use this plan to purchase, modify, refinance, and re-sell mortgages that are based on accurate home values, have fair, longer-term repayment terms that homeowners can meet, and return mortgage repayment rates to their historic high levels of dependability and profitability. If that’s how this program is carried out, it can avert a disaster. Unlocking credit and restructuring mortgages will also help soothe investor concerns, and therefore, protect pensions, savings and investments.
I could not have supported the original plan sent to Congress by the Bush Administration. It did nothing to protect taxpayers or to provide any oversight. It also did nothing to address the core of the problem, which is the foreclosure crisis. I think, however, that we in Congress have decided that if taxpayer dollars are used to clean up the financial mess, the Administration is going to have to accept taxpayer safeguards and taxpayer oversight.
Congress has done significant work to add in some of the needed taxpayer protections, and to make sure that this plan is grounded in helping regular Americans. Among other safeguards, this rescue bill will provide the government, and thus the taxpayers, with options to acquire an equity stake in companies that take advantage of the program.
The bill also includes limits on executive compensation for entities that take advantage of government assistance, though, like other provisions, the effectiveness of these provisions will depend upon how well they are implemented.
The bill also imposes needed controls and oversight provisions to make sure this unprecedented power and amount of money is used responsibly. These controls include immediate public reporting of the assets purchased, including the price paid; GAO audits of those financial reports; and Inspector General oversight to prevent fraud, favoritism, waste of taxpayer dollars, and abuse of power. In addition, a special House-Senate oversight panel will be established to track this program and to ensure that taxpayer interests are protected. These protections are important. Still more important is that Congress revamp oversight and regulation of our financial markets to prevent future financial disasters like this one.
I am also pleased that this bill includes provisions to maximize assistance for homeowners and minimize foreclosures to keep families in their homes. Rampant foreclosures are at the core of this economic crisis, and a recovery can only come when the housing market turns around. As the owner of loans that are at risk to be foreclosed upon, the government will be able to consent to modifications and rework mortgages so that the homeowner can continue to make payments. Homeowners, communities and taxpayers generally would be better off than if these mortgages go into foreclosure.
The financial mess we are in is the result of eight years of inadequate regulation of U.S. financial markets by the Bush Administration. It is long past time to strengthen market oversight. The regulatory gaps are everywhere. Unfortunately, due to the urgency of adopting this legislation, many much-needed reforms were simply not included in the rescue plan.
I voted for this rescue package with many concerns, but with the hope that it will prevent even greater harm to our economy and hard working American families. It is clear that a financial regulatory overhaul should be one of the first priorities of the next President and the new Congress.
Again, thank you for contacting me.
By voting for this bill, you have ensured that you have not earned my vote. This was the largest waste of money in the history of the United States.
This was in fact the Bush Administrations last ditch effort to extort and rob the treasury of this country of anything he can. And you helped him do it.
This will fix nothing, repeat, this will fix nothing.
By voting for this bill you have shown that you do not care about your constituency, you do not care about the American people that you swore to serve, and only care about greedy Wall Street executives.
Furthermore by sending me a form letter you have further added insult to injury by ignoring your voting constituency.
I will be sure to not vote for you in your next election bid.
[deleted for security reasons]