Holt Statement In Support of Financial Rescue Legislation

Press Release

Rep. Holt today released the following statement on his vote in favor of the Emergency Economic Stabilization Act, legislation that was defeated by a vote of 228-205.

I voted in favor of the Financial Rescue Legislation because it was a significant improvement - by including taxpayer protections and strong oversight - over Secretary Paulson's original $700 billion proposal, and because inaction could have a devastating impact on our already unstable economy. However, the bill failed to gain a majority in the House. Regardless of the outcome of this vote, I still plan to lead an effort to fix the economy in the long term. Now, we still must act in the short term to stand behind our institutions, restore confidence, and protect millions of Americans who would be affected by a continuing meltdown.

As we work to rescue our economy, we must understand how we got to this point. The speculation and greed of Wall Street in recent years - coupled with years of failures, excesses, arrogance and irresponsibility of the Bush Administration and some in Congress - has resulted in the meltdown of our nation's financial markets. The subprime mortgage meltdown that started a few years ago affect the largest financial institutions in our nation, Bear Stearns, Lehman Brothers, and AIG, which have fallen into or are teetering on the brink of bankruptcy.

President Bush and Secretary Paulson have told us that this rescue must be done immediately or else our fiscal house would collapse. Indeed we must act - but this crisis requires that we act wisely.

If the President had his way again, he would have ridden a wave of fear and railroaded Congress into passing Secretary Paulson's original three-page proposal asking for $700 billion - with no oversight - to bail out the financial services agencies. I did not support that plan, and while I have reservations about the compromise bill voted on today, after careful and thoughtful review I voted for it because I believe it was a significant improvement to the original Bush-Paulson plan.

This legislation includes taxpayer protections and would not simply hand over $700 billion to the treasury. My constituents rightly are concerned about what they would get for $700 billion. This bill would require Congressional review after the first $350 billion is distributed, give taxpayers a share of the profits or asset recovery, and require a plan to ensure taxpayers are repaid in full - with Wall Street responsible for any shortfalls. The bill would establish strong oversight and transparency, creating an oversight board appointed by Congress and instituting GAO oversight and audits at Treasury. It includes limits on excessive compensation for CEOs and executives. And it would help keep families in their homes by allowing the government to work with loan servicers to change the terms of mortgages.

I still will work to ensure that Congress does more to rescue our economy in the long term, sensitive to the variety of kinds of work New Jerseyans perform from factory to financial district from farm to pharma. There are thousands of my constituents are not traders or high powered executives but still work in these impacted industries. Furthermore, millions of Americans who have retired or are nearing retirement have seen their value of their pensions shrink or dwindle away. If day to day credit tightens up, small business may not be able to make payroll and farmers may not be able to get by until the harvest is sold. We need to act to ensure that retirement funds and pension plans are not devastated by investments that have lost value in a jittery market.

Especially, we also must invest in the real economy and act to shore up the bad mortgages and help American families struggling to make ends meet. One approach would be similar to the Home Owners' Loan Corporation, a 1930s-era Federal program that shored up a collapsing market in the past. We also must reform the way the FDIC manages risk to accurately reflect the assets that banks hold, rather than the flawed "mark-to-market" requirements that led to this mess. Ultimately, we must change the failed philosophy that favored no regulation and no oversight and allowed this crisis to happen in the first place.

I agree with Senator Obama: "When taxpayers are asked to take such an extraordinary step because of the irresponsibility of a relative few, it is not a cause for celebration. But this step is necessary. Now Washington has to show the same sense of urgency in dealing with the crisis facing Main Street and the middle class by passing an emergency economic stimulus plan that would create jobs by rebuilding our crumbing roads; shore up flagging state budgets to prevent drastic cuts in education and health care; and extend expiring unemployment insurance benefits for those who've lost their jobs in this downturn and cannot find new ones."

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