Emergency Economic Stabilization Act of 2008

Floor Speech

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

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Mr. VAN HOLLEN. Madam Speaker, let's be clear: we are facing this crisis today because of the reckless economic policies of the Bush Administration and its deregulatory ideology run amok. No one likes the choice before us. But we must deal with the world as it is today, not the world that might have been had the Bush policies not driven the economy and our financial system to the brink of collapse. If this rescue plan were simply an effort to indemnify Wall Street from the consequences of its own excesses, I would have none of it. Unfortunately, that's not why we're here today.

We're here because we cannot let the toxic contagion on Wall Street spill over to Main Street. We must not let the colossal failures of irresponsible corporate executives wipe out innocent small businesses and citizens who had nothing to do with this mess. At the end of the day, we are here out of the conviction that acting decisively now will mean less expense and pain than waiting for the crisis to get even worse.

Make no mistake: this legislation is a far cry from the original blank check the Administration so brazenly requested. Secretary Paulson and his successor at Treasury will have real time oversight regarding the decisions they make--and robust judicial review of those decisions after the fact. There will be no golden parachutes for the corporate executives whose poor judgment and failed leadership created this crisis. Qualified homeowners struggling to pay their mortgages will get the help they need to stay in their homes. The $700 billion authorized in this bill will be broken up and made available in separate tranches so that Congress can exercise ongoing oversight before additional funds are spent. And taxpayers will receive additional, vital protections in the form of a non-voting equity or senior creditor interest in the companies they are helping to rescue, a preferred position for distribution of assets should a company fail and the ability to resell the assets the government purchases at a potential profit once the markets recover.

In that regard, while no one has a crystal ball, the Congressional Budget Office has testified that it believes the final cost for this rescue package will be substantially less than $700 billion because the assets the government will be purchasing will have at least some value. Moreover, it is reasonable to expect that at least some of these assets could over time actually increase in value, giving taxpayers the opportunity to make money on their investments and help recoup the initial costs of this plan. However, in the event a full recovery of taxpayer funds is not complete within five years, this legislation requires the President to submit a plan that would impose a fee on the financial industry to make up the difference and make the taxpayers whole.

Finally, Madam Speaker, we would not be doing our job today if we did not assure our constituents that, even as we address the immediate crisis before us, we are firmly committed to analyzing what went wrong and fixing it so that this kind of crisis never happens again. In addition to the provisions in this legislation requiring a top to bottom review of our regulatory system, Congress--and the House Oversight and Government Reform Committee on which I sit--will immediately begin an investigation designed to give this Congress a comprehensive blueprint for 21st century regulatory reform.

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