Hensarling Updates 5th District Residents on Financial Markets and Energy Freedom Day

Press Release

U. S. Congressman Jeb Hensarling (TX-05) provided an update on his congressional work during the past several weeks to Henderson County residents today.

"I spent the last month in Washington leading the charge against the Paulson plan so that taxpayers would not have to bailout the mistakes made by Wall Street," said Hensarling. "Two of the most important issues facing this Congress happened to climax all at once: the current financial crisis and energy independence. While Congress was considering the Paulson plan, Americans were finally able to celebrate Energy Freedom Day when the offshore drilling moratorium was allowed to expire. This was a significant victory on an issue I've been working on for a long time."

Three weeks ago, the Bush administration requested $700 billion from Congress to bail out banks on Wall Street that held troubled mortgage-related assets. Hensarling spearheaded efforts to find an alternative plan that would not place taxpayers on the hook for mistakes made by Wall Street.

Hensarling said, "My top responsibility as an elected official is to protect families and people in East Texas who trusted me to represent their interests in Washington. This problem that began on Wall Street quickly moved to Main Street. I did not take lightly the critical nature of the credit crisis that our capital markets face today and the grave situation that every American will face should our credit markets freeze and remain frozen.

"From the beginning, I have said that inaction during this crisis was not option. As much as it pains my principles, I knew that some temporary form of the full faith and credit of the United States was necessary to address the crisis. I understood that without action, many East Texans might find themselves laid off from their jobs, unable to refinance their homes, or perhaps find their credit cards rejected as they attempted to buy food or groceries."

Hensarling worked tirelessly to put forth a number of different plans, ideas, and legislation to remedy the crisis. Hensarling introduced legislation that would stabilize the financial markets by requiring the Treasury Department to guarantee losses resulting from the failure of timely payments and interest from mortgage backed securities in order to provide value to those securities and a foundation for which they could then be sold. Rather than having the taxpayers fund this insurance program, all holders of mortgage-backed securities would have been required to pay premiums. In order to increase capital, Hensarling proposed a two-year suspension of capital gains rates, which would unleash funds with which to create jobs and grow the economy. Hensarling's proposal also included limiting federal backing for high-risk loans; privatizing Government Sponsored Enterprises like Fannie Mae and Freddie Mac; suspending mark-to-market accounting provisions for certain long-term, non-trading assets to allow firms to mark those assets to their true, long-term economic value; and prohibiting excessive executive compensation or golden parachutes.

As a result of his efforts, there was increased accountability and an insurance model included in the final bill. It also included compensation limits for executives of troubled firms seeking money from taxpayers, revised mark-to-market rules, and an increase in the FDIC insurance limit. While Hensarling took some solace in these improvements, he voted against the package both times it was considered by the House.

"I still fear that the bill represented more of a bailout than a work out. I fear it undermined the ethic of personal responsibility. I fear it rewarded bad behavior and punished good. But my greatest fear is that it changed the role of the federal government in our free market economy, which, despite its current problems, remains the envy of the world. How can we have capitalism on the way up and socialism on the way down? If we lose our ability to fail will we not in turn lose our ability to succeed?

"I wanted to be very careful while addressing this financial crisis to ensure that any short-term gain does not come at the cost of even greater long-term pain - that being the slippery slope to socialism. The thought of my children growing up in America with less freedom and less opportunity is a long-term pain I cannot bear. That is why I cast a "no" vote twice, but I did so with some doubt.

"However, this bill passed and is now the law of the land, and I stand ready to help make it work. My fight for freedom and opportunity continues," said Hensarling.

While negotiating a remedy for the financial markets, Congress also passed a spending bill that did not extend the current prohibitions on energy leasing on most of the Outer Continental Shelf and on oil shale leasing on federal lands that were set to expire on October 1.

"Republicans in Congress and hard-working Texans played a crucial role in ensuring that Americans could celebrate Energy Freedom Day on October 1," said Hensarling.

This summer, Hensarling led an effort to ensure that anti-American energy proponents could not extend the current moratorium on deep-sea energy exploration and oil shale on federal lands. Hensarling and 154 House Republicans alerted Speaker Pelosi that if she attached the ban to must-pass legislation, they would suggest to President Bush that he veto that legislation and that they would sustain his veto. This pressure was critical to ensuring that extension of the moratorium could not become law.
Hensarling also collected hundreds of signatures from East Texans on a letter to Speaker Nancy Pelosi demanding immediate Congressional action to increase the supply of American-made energy and lower the price of fuel at the pump.

"I am so proud of the 5th District residents who joined in my efforts by signing onto a letter to Speaker Pelosi to send the message that the American people would not stand by while Washington continued to actively block efforts to increase American energy exploration," Hensarling reflected on this accomplishment after devoting many months of work to the issue.
"For months now, I have fought on behalf of Texas families who begged Congress to allow the development of more American-made energy. I am thrilled that on October 1, millions of Americans were able celebrate Energy Freedom Day as we took a much needed step toward energy independence. This is a huge victory for hardworking Americans," Hensarling said.

While the repeal of offshore drilling was a major component to energy independence, Hensarling said he would continue the fight to enact the remainder of the American Energy Act — a single, comprehensive bill that would increase the supply of American-made energy, improve energy conservation and efficiency, and promote renewable and alternative energy technologies.

Hensarling said, "As the former officer of a green energy company, I recognize we need conservation — but not just conservation. We need renewable energy — but not just renewable. We need alternatives — but not just alternatives. We need to produce more energy in America for Americans to drive down the cost of gas and increase our energy independence."

Source