Emergency Economic Stabilization Act of 2008

Floor Speech

EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 -- (House of Representatives - October 03, 2008)

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Ms. ZOE LOFGREN of California. Madam Speaker, there's much not to like in this bill and there's a lot to be angry about how we got here, and if this passes, our job will not be done. We will have further efforts that will be required, especially to stabilize the housing market.

I chair the California Democratic Delegation. I want to share with Members the communications we have received from California's Governor and the Treasurer of the State of California.

The Governor tells us, and this is a quote, ``It is daunting that California, the eighth largest economy in the world, cannot obtain financing in the normal course of its business to bridge our annual lag between expenditures and revenues. This means that California may soon be forced to delay payments for critical services, such as teachers, law enforcement, and nursing homes. The same thing would happen to California cities and counties.''

Our Treasurer, Bill Lockyer, has told us, ``For 10 days, State and local governments have been closed out of credit markets--long-term and short-term--in spite of the fact they represent no default risk and provide a good tax return to investors.'' He says, ``Without prompt Federal action to address the economic crisis, we may have no market access. That means the State's cash reserves will be exhausted near the end of October. Payments for teachers' salaries, nursing homes, law enforcement, and every other State-funded service would stop or be significantly delayed. California's 5,000 cities, counties, school districts, and special districts would face the same fate.''

There is a $7 billion revenue anticipation note that the State needs to float to meet cash flow needs, and they cannot sell those revenue anticipation notes because of the credit freeze.

Folks, what this means is that the State of California, the eighth largest economy in the world, will not be able to meet payroll by the end of this month unless we take action to unfreeze these credit markets. I wanted to make sure that every Californian and, really, every American knew.

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