A Main Street Work-Out, Not a Wall Street Bail-Out

Statement

A Main Street Work-Out, Not a Wall Street Bail-Out

Yesterday, the House of Representatives had the opportunity to vote on the Emergency Economic Stabilization Act—legislation to stave off a potential global economic crisis that would have helped to protect the financial security of every American. While not a perfect solution, this bill provided the best prospect to infuse a volatile market with oversight and stability.

We swung and missed.

I believe there was a fundamental misunderstanding regarding the ultimate intention of the bill that failed on Monday. What was voted on was not a bailout of Wall Street, but a good faith effort to work-out the illiquidity in certain toxic mortgaged backed securities, which ultimately affects every person on Main Street and protects the long-term prospects of financial and non-financial businesses.

This was not the solution I would have chosen but with the current make up of Congress, this may have been the best possible bill available for a vote. With its failure, we are staring at an uncertain future that is likely to include legislation similar to the one originally proposed by Democratic leadership.

Congressional Democrats, led by Nancy Pelosi, Chris Dodd and Barney Frank, three people directly responsible for our current economic situation, unilaterally fabricated a bailout for Wall Street with government giveaways that promoted a near socialized economy.

Their bill included an "affordable housing" slush fund that would have provided twenty percent of revenues to liberal cronies like ACORN; a giveaway to trial lawyers, in the form of new regulations that would have allowed bankruptcy judges to arbitrarily rewrite and reduce mortgage terms; and a payoff to Big Labor, which would have given union bosses seats on the boards of participating financial companies.

Through the hard work of Republican negotiators, we were able to remove these completely unpalatable provisions and craft a pro growth bill that gave taxpayers maximum protection and the ability to use profits and cash flows from purchased assets to help pay down government debt.

The Republican influenced package included greater oversight by cutting the up-front Treasury authority in half, and requiring administrators of the program to continually report to an equally bipartisan accountability board. The bill ensured that the irresponsible executives whose reckless practices led to this predicament would not benefit from the program, but would have to forgo golden parachutes and heavy severance packages in order to participate. By including an insurance program that makes Wall Street share the burden of funding the rescue, the legislation protected taxpayers and ensured that costs would be fully paid for by participating companies.

Let me be clear: I am fundamentally opposed to government intervention in the private marketplace. I do not believe in government bailouts for industries whose irresponsible business practices result in financial loss—those are the risks of the free market.

That being said, the failure of America's financial institutions in our global marketplace could yield a catastrophic result for every American whose retirement funds, children's college tuitions and ultimate fiscal stability is intertwined in the solvency of the major financial institutions.

The events that transpired on the floor of the House of Representatives left Republican Members of Congress in the unenviable position of supporting an economic rescue package that on certain principles we disagreed with, but ultimately had to support for the financial security of our constituents.

I sincerely hope that Speaker Pelosi does not try to further advance her morally reprehensible liberal agenda by forcing a bill similar to what she crafted without Republican input; a bill that I could never support, will not become law and will further delay necessary action to stem our current economic crisis. One need not look further than the record setting decline of the stock market (777 points) after the failure of the Emergency Economic Stabilization Act on Monday to understand the gravity of our economic situation.

I understand the concerns expressed by many of my conservative colleagues who voted against this legislation and I share them. However, I am afraid that Congress missed an opportunity to take action and address the needs of the country.

This do-nothing Democrat controlled Congress has an all time low approval rating and yesterday's vote epitomizes Speaker Pelosi's lack of leadership. Americans want a Congress that represents their values and that will work for them.

As Congress continues to work on this vital economic issue, I promise to work with my colleagues towards a responsible, taxpayer friendly solution that puts Main Street ahead of Wall Street.

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