Economic Bailout, Part 2

Press Release

Late last week, the House of Representatives took up a $700 billion economic bailout package. This was the second time this legislation came before the full House, having failed once by a vote of 228-205. This time the bill passed, but without my support.

I recognize our economy faces a serious situation and this was not an easy decision to make. I have friends and colleagues who I respect deeply on both sides of this issue. I have heard from more than 1,800 of my constituents, from financial industry experts, and community leaders and I appreciate their input.

Simply, we need a bill which puts the taxpayer first, and this did not it.

Congress owes the American people more than rushing to pass a bill which spends hundreds and hundreds of billions of dollars without one House hearing or amendment allowed. The consequences of what Congress did are staggering.

Just how large is $700 billion? NASA in 2009 will launch several missions into space, employ some of the smartest people on the planet, and continue to operate a remote probe on the planet Mars - all at a cost of $17.6 billion. For a program about the same size, we have to look at Social Security, which clocks in at $608 billion.

Looking at it from a purely personal perspective, we could give each man, woman, and child in the United States $2,300.

The bill authorizes the Treasury Secretary to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates.

The plan also contains amendments added by the Senate providing $192 million for rum interests in Puerto Rico and the Virgin Islands, $100 million for motorsports race track properties, and $81 million to encourage film and television productions in the United States. Will these special interest loopholes really set our economy back on track?

This wasn't an ‘either-or' situation. Instead of greatly increasing our national debt, we instead should be looking at proposals to make tax credits available to private investor groups which agree to purchase bad loans. We should reduce corporate and capital gains taxes to encourage capital formation and boost asset values.

We should also look at breaking up Fannie Mae and Freddie Mac, as Congress did with Ma Bell. But because this legislation was negotiated by just a few Members and brought to the floor with no possibility of amendment, these ideas were not even debated. Instead, we have a rushed bill which does exactly what we shouldn't be doing - adding a crushing financial burden to American taxpayers.

We need to do something to right our economic ship, but we also need to realize this monster is partly of our own creation. Congress allowed the Federal Reserve to create easy and cheap credit - which buoyed our economy but also led to irresponsible borrowing and lending. Congress also enacted measures opening up loans to people who couldn't pay them back - which inadvertently increased the prices of homes to unsustainable levels and created a housing slump which exists to this day.

We shouldn't be forcing innocent taxpayers to bailout bad decisions and Wall Street's financial mistakes. While the bill was improved from the legislation I voted against originally, it still fell far short of where it needs to be if we want to correct our economy. Congress owes the American people more than political sweeteners and rushed deadlines - which rarely result in legislation to be proud of.

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