With panic on Wall Street and gridlock in Washington, Wisconsin's 1st District Congressman Paul Ryan successfully fought on behalf of Wisconsin workers and Wisconsin taxpayers to secure a much improved economic rescue package. Ryan remains outraged at the fact that Americans find themselves in this present crisis, but rather than sit on the sidelines, Ryan rolled up his sleeves and fought for a better deal to stabilize our economy, preserve American jobs, and protect American taxpayers.
With growing alarm over the freezing of our credit markets, urgent action is needed to prevent this crisis from crippling our economy and devastating the lives of Wisconsin families. While there has been widespread agreement on the need for action, an intense debate continues on how to best address this crisis. On Monday, September 22, Treasury Secretary Henry Paulson and the Bush Administration sought to ram a taxpayer-funded Wall Street bailout through Congress. Regarding this effort by the Bush Administration, Ryan argued, "My top priority in Congress has always been to protect the taxpayer. The Bush Administration bailout included no oversight, no limits on executive compensation, and no expectation that Wall Street share in the costs of their recovery. This rightfully offended the American people, and I fought to secure a better deal."
Acknowledging the gravity of the financial crisis and the logjam in Congress, Ryan went to work with his colleagues last week to craft an alternative economic rescue plan. On Thursday, September 25, Ryan and his fellow House Republicans unveiled a commonsense alternative to the Paulson plan, and refocused the debate on the exposure placed on taxpayers. Ryan's proposal would ensure that Wall Street help bail itself out, while unlocking the frozen credit at the heart of the crisis. Working across party lines, across chambers of Congress, and across branches of government, the House Republicans were successful in securing a better deal for taxpayers and the American people. Ryan and his staff worked through the weekend to negotiate a better deal, while keeping the office open to respond to constituent concerns. Paul Ryan and his colleagues were able to secure the following key provisions in the final package:
* Reduces Taxpayer Exposure - Rather than a $700 billion blank check, as requested by the Bush Administration, $250 billion would be available immediately to the Treasury Secretary with stringent oversight. Any additional funds would require additional government action and Congressional approval.
* Guaranteed Taxpayer Protections - Requires any participating institution that sells their troubled assets to the government to provide equity warrants to the U.S. Treasury. Ryan fought for this provision to guarantee that taxpayers will be the first to benefit from any future growth of companies that take part in this recovery effort.
* Strengthens Support for Homeowners - Keeping the focus on Main Street over Wall Street, additional assistance is provided for those facing the prospect of foreclosure. In addition to assisting struggling financial institutions, the Treasury Department is directed to develop an action plan to help mitigate home foreclosures.
* Wall Street Helps Bail Itself Out - The House Republican alternative, crafted by Ryan, focused on an insurance model, rather than a purchase model, to address the frozen assets clogging up the financial system. Participating institutions holding these assets would pay the insurance premiums - in effect helping bail themselves out rather than rely on taxpayers' hard-earned money. An insurance program was included in the final agreement.
* Eliminates Special Interest Giveaways - House Republicans were able to remove unrelated and costly provisions that would funnel funds to special interest groups, such as ACORN. Instead of creating a special interest slush fund, all funds recouped will be returned to the taxpayer to pay down the debt.
* Increased Oversight and Transparency - While the Paulson proposal explicitly removes any judicial oversight and lacks transparency provisions, the negotiated economic rescue package establishes a bipartisan oversight committee that requires honest and transparent reporting to Congress and the public. In addition, the programs will be monitored by a Special Inspector General, and reviewed and audited by the Government Accountability Office.
* Caps on Executive Compensation - Limits executive compensation to ensure that bad actors who contributed to this crisis are not rewarded with golden parachutes or severance pay.
On Monday, September 29th, H.R. 3997, the Emergency Economic Stabilization Act of 2008, failed to pass the U.S. House of Representatives, despite Ryan's vote in favor of the bill. On Wednesday, October 1st, the U.S. Senate passed H.R. 1424, a similar economic rescue package including an increase in the FDIC insurance cap. Earlier today, with Ryan's support, H.R. 1424 was passed by the U.S. House of Representatives. Following today's vote on the House floor, Ryan issued the following statement:
"The Bush Administration offended the American people with a three-page request for a blank check from Congress. Trust us' simply wouldn't do. I personally fought to make sure that taxpayers were protected. I fought to make sure that once these troubled institutions start making profits, the taxpayers benefit first and foremost. I fought to make sure Wall Street executives don't profit personally as a result of their irresponsible decisions. I wrote the provision to ensure that Wall Street shares in the cost of their own recovery. I got in the arena these past two weeks and fought for a better deal for the American taxpayer and those I serve in Wisconsin.
"Our communities in Southern Wisconsin have endured devastating economic hardships as of late, and I could not sit idly by with so much at stake. At the end of the day, this package is about the American taxpayer and American jobs. Failing to act on a viable alternative would have been devastating to American families and American workers. To stabilize our economy and to preserve American jobs, this bill moves us in the right direction. We are facing a Wall Street crisis that is now becoming a banking crisis - a Main Street crisis. There are still many difficult days ahead. This bill is not designed to prevent a recession, but rather to prevent a crash. This bill is about protecting working families' access to credit - so students can secure college loans, farmers can make their needed investments, seniors can secure their retirement, and businesses can pay their employees.
"I am outraged that we find ourselves in this situation, and we must hold those responsible to account. I will continue to push for additional reforms, working to modernize the regulatory framework and increase the transparency of our financial system. As Congress works to address our current financial crisis, reforms must be put in place to prevent this situation from being repeated in the future."