Economic Stabilization Act Passes
Press Release
Today, my friends and colleagues in the House of Representatives from both sides of the aisle came together and did the right thing by passing the financial rescue package. America is facing an economic crisis as serious as any in the memory of most citizens alive today, and it was imperative that we put aside our differences and worked together to do what's right for the country. While this is bitter medicine, I am convinced that it is what had to be done. As Mick Jagger of The Rolling Stones sang: "You can't always get what you want, but if you try sometimes, you might find you get what you need."
Following Monday's failed vote in the House to approve the economic rescue package, the stock market plunged, costing the American economy more than $1.2 trillion. Many Americans instantly saw their 401Ks and pension plans lose tremendous value. Without the decisive action we took this afternoon, most experts believe that our economic situation would only grow worse as credit markets freeze and Main Street suffers.
Unfortunately, the Bush Administration has not explained to the American people the necessity and urgency for this legislation. This is not a bailout of Wall Street, this is an attempt to protect Main Street from the greed and excesses of Wall Street. The Congress has worked from day one to improve the Administration's financial rescue plan to stabilize our economy to ensure that American taxpayers are protected and the interests of Main Street are addressed.
As opposed to what the Bush Administration requested, our bill includes:
* Strong independent oversight, transparency, and accountability requiring Congressional review after the first $350 billion is disbursed
* Limits on excessive compensation for CEOs and executives of participating financial institutions
* A plan that would ensure taxpayers are repaid in fullor even make a profit
* Property tax relief for up to 30 million homeowners - extending a new $1,000 per couple property tax deduction for non-itemizers
* Requiring the government to help homeowners renegotiate their mortgages, so as to prevent a further flood of two million projected foreclosures that would devastate our communities.
I am particularly proud that a bill that I introduced last week became a key negotiating component of this legislation. On Monday, September 22, 2008, I introduced H. R. 6986, the Individual Depositor and Community Bank Protection Act of 2008 in the House of Representatives which would raise the maximum federal deposit insurance coverage from the FDIC from $100,000 to $200,000. I offered a similar proposal to House Financial Services Chairman Barney Frank (MA-04) as an amendment to the financial rescue plan.
On Tuesday, Sen. Obama endorsed a measure which would raise the FDIC cap to $250,000 as part of a revised financial rescue package. I welcomed his support and, subsequently, the support of his Republican rival, Sen. McCain. On Wednesday, the Senate included this provision in their bill and the House passed it today. This proposal will give consumers more protection in this uncertain environment, and it was long past due. This plan also has the added benefits of helping small businesses who need to keep large sums of money in bank accounts to make payroll, and it is a good way for small, community banks to raise much-needed capital as consumers and traders flee from banks to the safety and security of treasury bills.
Additionally, this bill included numerous provisions that I have been fighting for throughout the session, notably the extension of the state and local sales tax deduction from federal income for Tennesseans. I introduced H.R. 5744, to permanently extend the state and local sales tax deduction, on April 9, 2008; and I worked with Senators Alexander and Corker, as well as Congressmen Tanner, Gordon and Cooper to make sure that we included this important provision in the final rescue package. This will help Tennesseans who are hurting from the economic downturn and help put more money in their pockets. The deduction will mean an average of $400 in tax relief for nearly 600,000 Tennesseans each year. While this bill extends the deduction for two years, we still need a permanent fix, and my colleagues from Tennessee and I will continue to fight for legislation that does just that.
The Economic Stabilization Act also included an extension of the suspension Alternative Minimum Tax, which I have voted to support numerous times throughout the session. The AMT was originally designed to guarantee that very wealthy individuals don't avoid paying income tax. However, the tax now threatens to impact middle-income families, including teachers and firefighters. This bill is just a start, though, because these families will be threatened with the AMT again next year. That is why I support a permanent fix to the AMT to make sure that these taxes never again threaten middle-income families for whom they were never intended. This will cut taxes for more than 25 million of America's working families, and over 20,000 citizens in the 9th District, and I am proud that we were able to help these people in troubled economic times by including this in the bill.
This legislation offers additional relief for middle-income families, American businesses and communities, including:
* The extension of the R&D tax credit by providing up to 30 million homeowners with property tax relief to ensure the competitiveness of American businesses by helping 4.5 million families better afford college with the tuition deduction, helping families of 13 million children by expanding the child tax credit to those earning $8,500 a year (from $12,050 in current law), and saving 3.4 million teachers money with a deduction for classroom expenses
* Tax credits for wind and solar energy production, which will create jobs in the 9th District
* Mental Health Parity to end discrimination against patients seeking treatment for mental illnesses ($3.9 billion)
No one is happy about this current crisis, and this bill is far from perfect. I'm very disappointed that the Senate felt the need to include "sweeteners" to pass this legislation, but sometimes you have to swallow hard and do what's best for the country. While some members of Congress have chosen to politicize this vote, I'm pleased that many have put partisanship aside to put our economy back on track. My friend, House Financial Services Chairman Barney Frank said it well: "If we aren't prepared to accept some of the things we don't like, we will not have the power to deliver for the people we care about." The people we care about are the families unable to take out a loan to buy an appliance or pay for college; Americans who have worked their whole lives, only to see their retirement accounts threatened; and millions of workers fearing a pink slip they did nothing to earn.
Very soon, Wall Street fat cats will have to answer to the Congress and the American people for their greed and irresponsibility. We are committed to examining the roots of this crisis and ensuring that we never have another situation like this. The era of the Bush Administration's reckless "hand-off" policy of deregulation for financial markets and tax breaks for Wall Street is over. We will work to restore sensible and effective oversight to our financial markets. And because record foreign borrowing and massive debt has shaken the world's confidence in our financial system, we must put America back on the path of financial responsibility.
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