Emergency Economic Stabilization Act of 2008

Floor Speech

EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 -- (House of Representatives - September 29, 2008)

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Ms. SCHAKOWSKY. Madam Speaker, I rise to say that I will support H.R. 3997, the Emergency Economic Stabilization Act, not happily, and not because I think the titans of Wall Street are deserving of our help. I am casting my yes vote because I am concerned about hardworking families in my district, the homeowners, small businesses and those who rely on modest pensions and investments. These are the people who knew well before the President or Wall Street woke up to the fact that our economy was in serious trouble, because they have friends and loved ones who have lost their jobs or house; they saw the price of gas and milk hit $4 a gallon, and they are struggling to afford good health insurance.

Yes, we must do something and today is the day. But we must also recognize how we got here. This is, in fact, the predictable result of years of misguided policies of the Bush Administration, the misguided belief that regulation of the markets, any regulation, was bad. Couple this with a lack of enforcement of regulations that did exist, and now we have a financial crisis that requires government intervention.

As a freshman member of the House Financial Services Committee, I was one of only 57 Members of Congress to vote against the Gramm-Leach-Bliley Act in 1999. By deregulating the financial services industry and removing consumer protections, that legislation set in motion the crisis that we are facing today. My colleague and friend, Barney Frank, now the chairman of the Financial Services Committee, a true progressive and the chief negotiator for this bill, also voted against that reckless measure.

I have consulted with many of the Nation's top economists, including top progressive economists, and virtually all have agreed that a failure to act would have devastating effects on the global economy--including your block and mine. Without quick action, employers might fail to make payroll, private student loans are already drying up, pensions would continue to lose value, and mortgages would become sparse. While I am not certain that this legislation will be able to fully stabilize the economic turmoil, I believe that we need to vote for the possibility of success over the certainty of failure.

The House Democratic leadership, and especially Chairman Frank, has worked to make the very bad bill presented by President Bush and Treasury Secretary Henry

Paulson better. The administration came to Congress with a breathtakingly arrogant plan--a mere three pages, 800 words, which basically said give us $700 billion for a plan that is ``non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.'' Today, we are offering our 110-page reply, and while it is certainly not perfect, I believe it is substantially improved.

Today we are saying ``no'' to a blank check! Congress cut in half the Administration's automatic $700 billion, requiring Congressional review for future payments. We are making sure

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that none of the CEO's who have run their companies into the ground and created this mess will retire with a ``Golden Parachute.'' We make sure that taxpayers get a share of the profits of participating companies, and require the next President to submit a plan to ensure that taxpayers are repaid in full by Wall Street. We help prevent home foreclosures destroying our neighborhoods by allowing Government to work with loan servicers on new mortgage terms. Finally, we ensure tough, independent oversight and transparency, including judicial review of the Treasury Secretary's actions.

Unfortunately, because of the need to obtain bipartisan support to move a bill quickly, this bill is by no means perfect. I believe that this legislation should have included bankruptcy protections and mandatory mortgage restructuring for homeowners in or at risk of foreclosure. I believe that we need to crack down on the lobbying practices and stop campaign contributions from companies which are clearly too irresponsible to manage themselves.

I am extremely disappointed that, even as we address part of the economic crisis, we failed to enact a second economic stimulus that would immediately create jobs and put money in the pockets of middle class families and struggling State and local governments. Unfortunately, the plan to extend unemployment compensation, increase food stamp and health care funding, and create jobs by rebuilding our infrastructure failed in the Senate last week. This is clearly unfinished business.

Today's vote represents the first step in reforming Wall Street and restarting our economy. For the first time in history, this Congress is addressing the excesses in executive compensation. This legislation gives the Treasury Secretary authority that could be used, if he or the next Secretary so choose, to significantly help low-income and working families. Finally, we are setting in motion the process of a comprehensive reform of the financial services industry.

Wall Street better get the message that Congress will never be ready with a blank check to clean up the messes that they made in the first place. I look forward to working with the next Administration and my colleagues in Congress to enact sensible regulations to ensure that this will not happen again.

Mr. COSTELLO. Madam Speaker, I rise today to oppose H.R. 3997, the Emergency Economic Stabilization Act. While I realize this bill is a product of intense and lengthy negotiations between Congress and the Bush administration and between Democrats and Republicans--and I greatly appreciate the efforts of Speaker PELOSI, Leader HOYER and Chairman FRANK--I remain unconvinced that this bill will solve the problems we face on Wall Street.

This bill is an unprecedented $700 billion bailout of the financial industry on the backs of the American taxpayer. I oppose this bill because I am not convinced that it is imperative we act right now; I believe we are moving too quickly to rush this proposal through and have not adequately considered other approaches to solving the problem of bad debt and tight credit. Numerous economists have expressed that this proposal might actually make the problem worse. We should take more time to consider alternatives, as the deadline we are up against today has been set solely by the Bush administration.

American taxpayers are being told by the President that they must rescue Wall Street, despite the fact that the Bush administration and Wall Street have opposed Government oversight in the financial industry for years. I believe the financial industry should help pay for any program to heal the economy. $700 billion is too much to ask taxpayers to bear without a requisite sacrifice from the industry that bears much of the responsibility for bringing us to this point.

Madam Speaker, this is a historic vote, and we should be taking more time to ensure we have considered all options. I am not convinced that this is the best way to proceed, so I must, and will, vote no.

Mr. UDALL of Colorado. Madam Speaker, for eight years, the Bush administration and its allies in Congress have allowed Wall Street to gamble with America's economy, and the results have been devastating for Main Street. The Administration consistently ignored the experts and failed to adequately oversee America's financial markets. Administration officials were warned that Wall Street's risky investments, combined with the mortgage industry's irresponsible practices, could produce a perfect storm that would threaten Americans' homes, jobs and life savings. Yet they did nothing.

When Wall Street's dangerous behavior began to undermine America's economy, the Bush Administration proposed a bailout that would have given the Treasury unprecedented power to spend taxpayer money without adequate oversight or an actual plan for fixing the systemic problems that led America to this crisis. At the time, I spoke out against the Bush bailout and called for a better proposal, one that would protect taxpayers, help homeowners and benefit Main Street, not just Wall Street. More importantly, I demanded that any plan to shore up America's financial markets include reasonable rules to ensure that Wall Street does not continue to gamble with our future.

We could have, and we should have, taken the time to do this right. Four hundred of the country's top economists, including three Nobel laureates, asked Congress to take more time to improve this proposal. With a proposal this far-reaching and complex, we had a responsibility to produce the best possible piece of legislation. The bill we are voting on today falls short. Instead of reforming Wall Street, we are using taxpayer dollars to insulate financial firms from the consequences of their own actions. The American taxpayer is on the hook for $700 billion to cover Wall Street's mistakes, and that is not right. Even worse, Wall Street is not being forced to change its behavior. This can only encourage more irresponsibility.

At the same time, the provisions that limit executive compensation in this bill are weak, meaning that corporate executives who ran their companies into the ground could still walk away with millions in taxpayer-funded compensation in the forms of golden parachutes or other lavish benefits packages. Again, this sends exactly the wrong message to Wall Street. This legislation may still use taxpayer dollars to reward executives who have failed their companies and subsequently hurt the American economy.

In addition, at a time when America's middle class is severely stretched to make ends meet, this $700 billion bailout not only seeks to rescue our

taxpayer dollars to bail out foreign comapnies. We must protect American taxpayers before we seek to rescue foreign companies while their governments do nothing.

Finally, this legislation does too little to help responsible homeowners. As a result, tens of thousands of families could lose their homes. More importantly, families who had nothing to do with failed mortgages could lose billions in assets as foreclosures continue to drive down property values.

I believe strongly that Washington must act to protect Main Street from the crisis on Wall Street. I supported an economic stimulus plan that puts working families before corporate CEOs by creating jobs, protecting children's access to healthcare and ensuring that struggling families do not go hungry. I have consistently supported strong action to protect middle class New Mexicans. But I could not vote to give Wall Street $700 billion of taxpayer money without solving the underlying problems with our economy.

I will continue working with my colleagues to reform America's financial markets, so Wall Street is not allowed to make the same mistakes over and over again. I will also continue fighting to support middle class New Mexico families that find themselves struggling in an economy devastated by the irresponsible acts of others. They are the true victims of the Bush administration's malign neglect of our economy. We must do what's right for them.

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