In the days that have passed since Congress approved the $700 billion financial rescue package, there have been several positive developments amidst all the economic turmoil. I continue to stand behind my vote against both versions of a bailout package that was far too expensive and did nothing to deal with the underlying problem: Falling home values for 12 million people who may face foreclosure. The initial Treasury strategy to invest taxpayers' funds in toxic securities of uncertain value weeks or months into the future was unlikely to stabilize the market. It also puts us in a weaker position if another financial shoe were to fall.
The stock market's verdict? The Dow Jones Industrial Average fell almost 500 points from the moment we started to vote to approve the package. The market continued in free fall for the next week, indicating that the financial sector felt it was too little, too late, or that at least it was not an adequate response.
Since then, the Treasury Department has made a U-turn and is now going to inject capital directly into banks instead of buying dubious assets. After the Bush administration rejected this idea during earlier discussions with Congress, they did an about-face after Great Britain showed the lead and other interventions weren't working. I find this very encouraging-it will help put money where it's needed in a matter of days, rather than relying on an uncertain process that could take months.
I'm also heartened by the renewed emphasis on the problems facing millions of Americans whose mortgage balances are now more than their homes are worth. This downward spiral of home values continues to destabilize the market. Senator Obama has announced that, if elected, he would address this issue in the first days of his administration. He has already called for a short-term foreclosure moratorium. I feel momentum is building towards stabilizing the housing market, not just for families, but for communities and the economy.
I have long argued and worked to provide homeowners with the same bankruptcy protection enjoyed by businesses and those with multiple vacation homes. This simple change would greatly reduce the number of foreclosures, the extreme distress felt by many families, and preserve a vital asset for a greater number of Americans.
The other extraordinarily positive development is that resistance to a broader economic stimulus package is melting away. With the economy continuing in free fall, the concerns about critical infrastructure projects, and with both presidential candidates looking for ways to bolster the economy immediately, an economic stimulus package looks more and more likely to be passed when Congress returns for a near certain lame-duck session in November.
There's no denying that the United States has been living beyond its means. Not only do we need to reassess regulatory oversight; in the short term we need significant, dramatic action. I will continue to fight for initiatives that maximize value for American taxpayers and provide benefits for families, communities, and the economy.
Even if we are successful in enacting a broad economic stimulus bill, the hard work has just begunI fear things may continue to get worse before they get better. I remain deeply concerned about our weakened economy, and look forward to continuing conversations at home with Oregonians about policies and practices that are going to help us manage the turmoil and reverse the trend.