Fortenberry Statement on Emergency Economic Stabilization Act of 2008

Madame Speaker:

Undoubtedly, America is facing a serious financial challenge. There is a threat of a systemic failure. Yet, the central issue before us is two-fold. Is the situation as dire as predicted? And is this construct, this bill, this type of government intervention with its huge expenditure and taxpayer exposure, the correct approach?

While I recognize the economic dangers this nation faces, I deeply regret that we have accepted artificial deadlines in a rush to do something. The bill before us today, while much improved from the original Administration proposal, relieves bad assets from the market which have no defined market value, but it overlooks more fundamental issues such as accounting rules (called mark to market) that are forcing banks to artificially write down assets, many of which have real economic value, but technically no book value. This erodes the ability to leverage these assets to meet capital requirements, resulting in shrinking credit and an inability to make loans. Simple measures to change this problem are not even being considered.

Should we also increase the Federal Deposit Insurance guarantees to restore depositor confidence?

Could we give banks some breathing room to work out these problems, rather than a taxpayer assumption of these assets?

The taxpayer exposure of this bill started at $700 billion. It remains $700 billion.

Nebraskans and most other Americans have made responsible financial decisions. Now we are forcing them to foot the bill for the financial industrialists of Wall Street who created this problem for Main Street. And perhaps we have not addressed the underlying fundamental problems.

We are falling into the trap of sequential decision-making. Once we adopt this construct, we shut the door on alternatives that may be less costly, easier to implement - and may provide a way through this crisis. The choice between action and inaction today is a false one.

Like so many other members, I have spent an extraordinary amount of time in careful discernment. I cannot in good conscience support this legislation.

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