For Immediate Release
Tuesday, October 28, 2008
Contact: Josh Moenning
(402) 438-1598
America faces serious economic challenges. Fortunately in Nebraska, our strong agricultural economy, economic diversity, and strength of character and responsibility in fiscal matters have prevented the deeper troubles many others are experiencing.
As you know, Congress was recently faced with a decision to adopt a $700 billion plan to nationalize bad corporate debt. The Secretary of the Treasury and Chairman of the Federal Reserve urgently appealed to lawmakers to pass this remedy.
Some colleagues and I had serious concerns. Was the situation as dire as conveyed? And what were the alternatives to that kind of taxpayer obligation?
These concerns were never fully addressed. Many Nebraskans, who had made responsible financial decisions, had serious reservations as well. The House of Representatives initially rejected the plan and forced some helpful changes, such as an increase to Federal Deposit Insurance limits and a change of accounting rules that may have artificially driven down asset values. However, the underlying plan remained the same.
I voted against the bailout measure twice.
While tumultuous financial markets remain a serious concern, the choice was not between action and inaction. Rather, it was a choice about whether to adopt a potential $700 billion taxpayer liability to nationalize corporate debt or to consider alternatives that may be less costly, easier to implement, and fairer to most Americans who have no blame for these financial market difficulties.
During debate on the legislation, I called for options that would restore asset values and liquidity by providing loans or guarantees, rather than purchasing troubled assets. I helped introduce an initiative to use net worth certificates to meet capital requirements, a tool the government used in the 1980s to address financial turmoil. Unfortunately, these alternatives did not receive full consideration.
Although I did not support the bailout, it is now law and it is my sincere hope that the Treasury and Federal Reserve's efforts will be successful. As we move forward with the approved plan, transparency and taxpayer accountability are critical. In the last two weeks, I have joined some of my colleagues in urging strict government oversight of corporations benefiting from the federal bailout.
I helped introduce a bill to prevent the CEOs of Fannie Mae and Freddie Mac from receiving “golden parachutes,” millions of dollars in severance pay. Eighty-five colleagues and I called on the Treasury Secretary and Federal Reserve Chairman to demand that insurer AIG, recipient of a previous federal bailout, reimburse the government for any taxpayer funds used for a recent employee retreat at an exclusive California resort.
On Friday, colleagues and I also called for the U.S. Attorney General to investigate any and all financial institutions, corporations, and individuals that are suspected of criminal action relating to our current economic crisis.
As we now work to restore opportunity in challenging times, America must look to the best traditions of our nation’s past for a new way centered on responsibility, discipline, entrepreneurship, and stewardship. More than any bailout crafted by Washington or Wall Street, it is a return to these values that will most help Americans build a more just and secure future in the years to come.
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