U.S. Representative George Miller Details the Rescue Legislation
- From U.S. Representative George Miller October 16, 2008
Dear Mr. Sarabia:
Thank you for contacting me about emergency legislation to stabilize the financial markets. I appreciate the opportunity to respond to your concerns. This legislation was controversial from the moment President Bush first presented it. Many people saw it as nothing more than a bailout for Wall Street firms whose unchecked greed fueled an economic crisis. I understand why so many people reacted this way, but I see it differently.
If this bill were just about helping Wall Street, given its behavior, I wouldn't walk across the street to save it. But this is about our country. It is about our communities, families and access to credit, creating jobs and economic growth. It will not solve our economic problems overnight, that is for sure. And I don't know anyone who is glad that we even have to consider this plan. But we must approve it in order to move forward.
In the face of grave and growing instability in our credit and financial markets, the President made an urgent appeal to Congress. He presented a three-page plan to grant never-before-seen powers to the Treasury Secretary to spend a staggering $700 billion in taxpayer money to buy up the bad debt held by banks and investment firms with no accountability and no protection for taxpayers.
Along with many lawmakers from both parties, I rejected the President's request for a `blank check.' But I did not dismiss the need to take action to help workers and families already hurt by long-standing economic problems who will suffer further if the financial crisis becomes the full scale economic meltdown so many experts predict.
The legislation now before Congress seeks to ease enough of the debt burden held by banks and other firms to help families facing foreclosure and stabilize the credit markets. This is critical because credit fuels our economy and creates jobs. The credit markets have already tightened and if they dry up the economy cannot grow. Americans will not be able to borrow to make payroll at small businesses, invest in new equipment, take out college loans, find mortgages, start new businesses, or buy new cars.
Left unchecked, this crisis will further erode people's retirement savings accounts, pension funds, and other savings, raise unemployment, and undermine our ability to create new jobs. As we are seeing in California, school districts, counties, and cities are losing millions of dollars because of the collapse of firms in which they held investments.
To protect the taxpayer and help the economy, I successfully fought to add several key provisions to the bill, making it now a far cry from the President's original three-page plan. We added provisions to:
1. provide money in stages, not all at once, and with congressional approval, to buy up bad debt from financial firms;
2. limit the compensation of CEOs whose firms the government rescues. No more golden parachutes for Wall Street tycoons who get government assistance;
3. provide immediate, ongoing and tough oversight by independent boards, including the Inspector General and General Accounting Office;
4. give taxpayers stock equity of the companies that they rescue, giving them a share of the profits as those companies recover and reducing the overall cost of the plan;
5. help families in foreclosure;
6. provide a mechanism to require companies to pay for any losses the taxpayer might face from this plan, and;
7. increase federal bank deposit insurance from $100,000 to $250,000.
These are very important changes.
The American economy is in its weakest condition in years, with rising unemployment, stagnant and declining wages, record high energy costs, and soaring food prices. Mortgage foreclosures are rising while home values decline further. Fundamental investments in our economy remain unmet for health care, infrastructure, new energy sources, and for education. Add to this now the very real credit and financial crisis.
While the housing crisis and collapse of the financial markets has its roots in the excesses of Wall Street and Republican anti-regulation policies in Washington, the impact of widespread bankruptcies and frozen credit will be felt by each of us.
Americans have every right to be furious with Wall Street CEOs and eight years of the Bush Administration and 12 years of the Republican-led Congress that did nothing but cut taxes for the rich, de-regulate the banks, and turn their backs on critical oversight.
Now, the party for Wall Street that has been a nightmare for Main Street is over.
The bill before us is regrettable but necessary. And clearly, much more needs to be done to protect people's homes and grow the economy.
We need to reform our banking and financial laws to help the economy grow but also protect taxpayers and consumers.
And we must invest directly in our economy to create good, modern jobs.
I pushed for investments in the emergency plan that would have created good paying jobs in California and across America, infusing money for mass transit, highways, bridges, water recycling, and broadband technology.
At a time of rising unemployment, it is astounding and unfortunate that President Bush and Senate Republicans rejected this effort.
I understand the concerns that have been raised about this emergency legislation. No one wants to see a commitment of this much money going to buy up bad debt. But we have improved the plan by building in safeguards for the taxpayer and trying to reduce the plan's overall cost. And, again, I strongly believe that failing to approve it will be far worse for everyone.
Thank you for contacting me. As always, I value your comments.
Member Of Congress, 7th District
P.S. On Wednesday, the Senate passed its version of the emergency legislation, 74 to 25, by including the increased bank deposit insurance levels and also unrelated tax provisions -- some of which are very important. Included in the package are tax credits for the production and use of clean renewable energy sources like wind and solar, something I strongly support. These provisions alone will create and retain hundreds of thousands of green jobs, many of them in California. The bill also provides relief from the Alternative Minimum Tax (AMT) for millions of middle class families. The AMT was designed to ensure that the wealthiest families do not escape paying taxes; unfortunately, it has grown beyond its original intent, requiring Congress to act to shield middle class families. These are important provisions. The Senate version also includes legislation that I have championed for many years with Senator Ted Kennedy, which the House recently approved, to require health insurance companies to cover mental illness as they would other illnesses. The bill would help overcome decades of discrimination by health insurance companies against people who seek treatment for mental illness.
Learn more: www.georgemiller.house.gov