Statement on Testimony of CBO Director Orszag before the House Budget Committee
Washington, D.C. (Wednesday, September 24, 2008)U.S. Representative Tom Allen, a senior member of the House Budget Committee, issued the statement below following the Committee's hearing this morning, "Federal Responses to Market Turmoil: What's the Impact on the Budget?" with witness Dr. Peter Orszag, Director of the non-partisan Congressional Budget Office (CBO).
"CBO Director Orszag confirmed that failure to respond to the current market turmoil would curtail the availability of credit. This would make it increasingly difficult for individuals, families and businesses to borrow money. Such a credit crunch will affect the availability and cost of mortgages, automobile and student loans and other services. Dr. Orszag expects that the actual cost to taxpayers will be considerably less than $700 billion.
"Maine families and small businesses are justifiably anxious about the impact the financial crisis will have on their economic security. They worry that it will undermine their retirement plans and their hopes for a college education and prosperous future for their kids. I share their outrage at the Administration and its congressional supporters whose economic policies and failure to enforce regulations led to this disaster. I understand their objection to saddling American taxpayers with the bill for recklessness and greed by speculators who reaped profits and now want a get out of jail' free card.
"With our national and international financial system on the verge of collapse, we need swift, bold action to restore confidence and stability. My overriding priority is to protect the financial security of the families and small businesses that are the foundation of Maine and the nation's economy. I am working with Members of Congress from both parties to craft a response to this crisis that minimizes taxpayer exposure. I will also demand rigorous, effective oversight of the Treasury and accountability from the individuals and companies responsible. We must also limit excessive compensation for executives and establish safeguards to ensure this never happens again."