Schakowsky Votes for Financial Rescue Plan

SCHAKOWSKY VOTES FOR FINANCIAL RESCUE PLAN

U.S. Representative Jan Schakowsky (D-IL) today voted for H.R. 3997, the Emergency Economic Stabilization Act of 2008. H.R. 3997, which failed by a vote of 205 to 228, would have allowed the Treasury Secretary to purchase troubled assets from financial institutions so banks can resume lending. The majority of House Democrats voted for the bill, while a majority of the House Republicans voted against the measure. The financial crisis on Wall Street has frozen the credit markets making it very difficult for Americans to get access to student loans, home loans, and car loans and for businesses to make payroll. Congresswoman Schakowsky and her Democratic colleagues are prepared to return to Washington to pass a bill that will strengthen the economy and protect the American taxpayer.

Congresswoman Schakowsky released the following statement before the House voted on H.R. 3997.

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 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 pocket 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.

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