Recently, I, along with Dan Boren (D-OK2) and Wally Herger (R-CA2), unveiled bipartisan legislation to encourage small employers to expand and grow their operations, spur investment in local communities and create new jobs.

The legislation, the Small Business Capital Expansion and Improvement Act (H.R. 5906), would extend the deduction for new equipment purchases to include capital investment and improvements for small businesses with $5 million or less in gross tax receipts. The bill would allow small employers to take a deduction of up to $125,000 for capital investments like they can currently do for new equipment purchases (under Section 179 of the tax code) as a way to free-up resources to hire additional employees and further grow their businesses.

This legislation is designed to help the roughly 5.4 million small businesses in the United States with gross receipts under $5 million, which employ about 35 million Americans.  

Small businesses are the backbone of our local communities and critical to our economic recovery. Unfortunately, current law does not offer tax incentives for small employers to expand their businesses by making capital improvements. This bill will encourage small employers to make capital investments to grow their businesses. It will also spur economic growth in communities across America and help our nation overcome the economic challenges we face today.

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The Jetson’s cartoon made many of us think that the car of the future would soar through the air as we fly to our destination. But not many of us would have guessed that the only thing about today’s vehicles that would soar is the cost to keep the tank full of gasoline. Rising fuel costs are bearing down on our nation’s economy and are hampering economic recovery. The more money people have to spend on gasoline, the less they have to spend on other goods or services.

As the peak summer driving season ramps up, refineries will push the limits of an already tight capacity to increase gasoline supply. However, with the overall growth in demand showing no signs of slowing even in the face of $4.00 per gallon of gas, prices will continue to be driven as much by refining capacity as global competition for oil. The solution isn’t easy, it’s a careful balance that includes government stepping out of the way where necessary and providing incentives where needed.

Conservation is sensible and should be promoted, but new capacity and new energy sources are sorely lacking. We need new domestic energy sources, increased refining capacity and a supply of our own oil from the Arctic National Wildlife Refuge or the Outer Continental Shelf if our country is to be more energy independent. These new reserves of oil will increase the national supply and make us less dependent on the Middle East. But we can’t just drill our way out of the problem, we have to employ an “all the above” strategy with alternative sources as the centerpiece.

New investment in both alternative energy and conventional sources will boost supply and ease the pressure at the pump. Pursuing energy-efficient technologies for advanced transportation will help decrease demand for gasoline in the near term, as we bridge to the next generation technologies. In Tennessee and in Washington, D.C., I am amazed at the ever-increasing number of smaller cars and hybrid vehicles already on the roads.

General Motors and Toyota have each announced plans to introduce a plug-in hybrid-electric vehicle with a lithium-ion battery within two years. Current hybrid vehicles recharge the battery from power generated by its wheels, but plug-in hybrids will be charged with a regular power outlet, helping displace the amount of petroleum used for transportation. However, if the vehicles of the near future are powered by electricity, we must also support a bold resurgence of nuclear energy led by the Tennessee Valley Authority.

Alternative fuels like ethanol will also help substantially reduce our gasoline consumption. Corn is the predominant feedstock to make ethanol today, but switchgrass has better potential because it is not a food-based crop, it is cleaner and is easily grown around the country, including here in Tennessee. The advances in bio-research needed to drive down production costs are occurring right now at the Oak Ridge National Laboratory. According to one estimate, by 2050, we could produce 165 billion gallons of ethanol from switchgrass, which is equivalent to 108 billion gallons of gasoline. This is slightly more than the current yearly U.S. demand and would provide an alternative fuel for 260 million cars and trucks on the road today without having to buy a drop of oil from another country.

In the future, we can completely eliminate pollution from our transportation system and dramatically reduce our oil dependence with the development of fuel cell technology. The current partnership between the University of Tennessee at Chattanooga and Silicon Valley to develop a solid-oxide stationary fuel cell is now being demonstrated in the Tennessee Valley. This fuel cell can run on natural gas, ethanol or any number of other fuels and produces enough electricity – 5 kilowatts – to power a single family home. The fuel cell’s pollution-free hydrogen emissions can be captured and stored to power a hydrogen fuel cell vehicle. Imagine that: One unit to power your house and produce fuel for your car while you sleep without any public power transmission lines. Very soon a 100-kilowatt system will be demonstrated, which would provide electricity for a 30,000-square-foot shopping center.

We cannot wait. We must act now. An “en-tech” agenda is pro-growth and pro-America. The nexus between national security, energy and the environment is one of the most important issues of our time. On energy, I am for an “all of the above” approach.

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This week, Chairman McCotter joined fellow GOP leaders in sending a letter to Speaker Nancy Pelosi regarding the high price of gasoline.  The full text of the letter is below.  Also, click here for an article in The Hill about the letter.

The Honorable Nancy Pelosi
Speaker of the House
H-232, U.S. Capitol
Washington, D.C.  20515

Dear Speaker Pelosi:

Two years ago this week, you stated that House Democrats had a “commonsense plan” to “lower gas prices.”  In light of the skyrocketing gasoline prices affecting working families and every sector of our struggling economy, we are writing today to respectfully request that you reveal this “commonsense plan” so we can begin work on responsible solutions to help ease this strain.

Today, the national average for regular unleaded now stands at $3.51 per gallon, according to AAA, which is $1.18 higher than it was at the start of the 110th Congress – a more than 50 percent increase. In fact, gas prices rose more in the last 15 months than they did in the six years prior to Democrats taking control of both Houses of Congress in January 2007.

In the midst of a slowing economy, falling home values and soaring costs of living, this is a heavy premium for working families to bear.

Americans, particularly those in suburban and rural communities, are paying more simply to commute to work each day. America’s truckers, faced with the prospect of paying $1,200 to fill up a tank that just a few years ago cost $600, must now consider taking less work or going out of business altogether.  We have seen reports of school districts where filling up buses is already costing as much as $70,000 more than originally budgeted.

Once a nightmare scenario, $4 gasoline is now a very real possibility of becoming a summer staple.  In some cities, including San Francisco and Chicago, it is already a startling reality.

We noted with great interest, then, that on several occasions you have announced the existence of a Democratic plan to lower gas prices. In fact, it was two years ago this week, on April 24, 2006, when you pledged that “Democrats have a commonsense plan to help bring down skyrocketing gas prices.”   Just two weeks after that, you stated that Democrats had “real solutions” that would “lower the price at the pump.”

Yet 15 months into the 110th Congress, you have yet to reveal this “commonsense plan.”

House Republicans stand ready to work with you and our Democratic colleagues in a bipartisan fashion to address America’s energy crisis.  As part of that effort, we respectfully request that you reveal the “commonsense plan” to lower gas prices you promised two years ago.  The ability to fully consider its provisions, details and costs – including any proposed new taxes on gasoline or energy as we have seen in the past – is critical if we are to effectively serve our constituents facing ever-increasing prices at the pump.

We appreciate your timely reply to this request.

Sincerely,

John Boehner                                               Roy Blunt
Republican Leader                                      Republican Whip

Adam Putnam                                               Thaddeus McCotter
Conference Chairman                                 Policy Committee Chairman

Kay Granger                                                 John Carter
Conference Vice-Chair                              Conference Secretary

Tom Cole                                                       Eric Cantor
NRCC Chairman                                         Chief Deputy Whip

David Dreier
Rules Committee Ranking Republican

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After World War II, our country offered education assistance to returning veterans. In the 1940s, the GI Bill was created to pay for veterans' tuition, books, fees, a monthly stipend and other training costs.

More than half of the 15 million WWII veteran population used some form of these benefits. Unfortunately, the GI benefit has not kept pace with the rising cost of higher education.

Today, education benefits are administered under the Montgomery GI Bill, which was last updated in 1984. At that time, the average public college tuition cost about $1,250 per year, and our country was in an extended period of peace. A lot has changed since 1984. Tuition averages $5,800 per school year today, and we are also asking more from our military now than any other time in history. Clearly, it is time to modernize the GI Bill.

Since 9/11, many of our troops have served multiple tours of duty in Iraq and Afghanistan, and are currently serving at an unsustainable rate. The president recently announced that we will reduce deployments from 15 months to 12 months in Iraq. This moves us closer to the ultimate and sustainable goal of a 12-month tour in theater and 36 months at home.

Benefits to match sacrifice
The U.S. Defense Department has announced that it intends to increase the end strength of the U.S. Army and Marine Corps to meet the president's goal. To continue to recruit and retain a quality, all-volunteer force, we must offer benefits that coincide with the times and the sacrifices we ask of our service members. The GI Bill is a key recruiting tool that encourages many bright young men and women to join the military.

When these veterans return from active duty, they need to know that we honor their service and sacrifice by offering them the resources to continue their education. But education is just one way we can keep our promise to our military men and women. Through my role on the U.S. House Appropriations Military Construction and Veterans Affairs subcommittee, I am also working to increase the quality of life for our service members and their families by providing critical funding to modernize military housing, build child-care centers and enhance veteran health centers.

There are currently a number of proposals pending before Congress to update the education benefit. We will examine additional proposals for increased veteran benefits as we debate the upcoming Iraq and Afghanistan supplemental and the fiscal year 2009 budget.

I will look to the leadership of my colleagues who have served in the military, like U.S. Sen. John McCain and U.S. Rep. Sam Johnson, to help perfect these proposals. But one thing is clear: Our current veterans, including those that served in active duty, the Guard and the Reserve, need benefit increases to keep up with the changing times and better match their extraordinary sacrifice to a grateful nation.

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I continue to call for the Democrat majority to stand by their promises and fight our nation’s rising gas prices. 

The Democrats have failed as the majority in Congress. They made promise after promise to help the American people and, to no surprise; all of those promises have been broken. On April 24, 2006, Pelosi and the Democrats vowed to address our nation’s high gas costs. When they took control of Congress last year, the national average cost for regular unleaded gas was $2.33 a gallon. Now, 15 months later, the cost has risen to $3.53. That’s a $1.20 per gallon increase. Where will it stop?

Families across America, and in my home state of New Jersey, are already struggling to meeting rising household costs, they can’t afford to keep paying these outrageous prices at the pump. When are the Democrats going to make the American people and their family budget a priority?  Instead of voting or proposing to raise taxes on gas consumers, Congress needs to focus on the family budget not the federal one.

I have long been opposed to the big tax hit that Washington forces on motorists. For every gallon of gas purchases in New Jersey, 18.4 cents in taxes is sent to Washington politicians. And to make matters worse, New Jerseyans only get back 55 cents for each tax dollar they send to Uncle Sam.

I am proud to be a leading voice in Congress for reform of our nation’s gas tax system, authoring the STATE Act (Surface Transportation and Taxation Equity Act), which would allow state taxpayer dollars to stay in the states. This legislation would return primary transportation program responsibility and taxing authority to the States where it belongs.

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I am proud to have introduced H.R. 1395, the Government Credit Card Abuse Prevention Act of 2007 last month.  This legislation would help put an end to the fraudulent use of government credit cards.  A Senate companion bill, S. 789, introduced by Senator Charles Grassley (R-IA), has recently been cleared by the Senate Homeland Security and Government Affairs Committee.

The American people entrust their government with trillions in tax dollars to pay for the everyday needs of the federal government.  It is unfortunate that there have been more than a few documented cases of government employees misusing federal credit cards for dubious purchases.  It is even more disappointing that the government seems to lack any substantial mechanism to combat this misuse and abuse of taxpayer dollars.

My legislation and the companion bill that has gained support in the Senate send a strong message to the American people that we plan to be good stewards of their taxpayers’ dollars.  Reports that catalog abuse are helpful in defining the problem.  But, we need everyday, internal safeguards as well as appropriate penalties so that we can put a stop to misuse of government funds.  We need to restore the American people’s trust in their government.”

Reports on the scope of government credit card abuse have highlighted several cases of gross misuse.  These included the rather expensive such as an $8,000 63-inch plasma television that was found unused, unwarranted air travel, and thousands of dollars spent on golf and tennis training at resorts.  They have also highlighted the ridiculous such as a beer brewing kit.

Key Points of the Government Credit Card Abuse Prevention Act:

·        Provides credit checks for travel card holders and issue restricted cards for those with poor or no credit to reduce the potential for misuse;

·        Maintains a record of each cardholder, which would include single transaction limits and total credit limits so agencies can effectively manage their cardholders;

·        Implements periodic personnel reviews to determine if a cardholder has a position that requires such a card; and,

·        Outlines penalties for fraudulent use of travel and purchase cards including termination of employment and prosecution to the fullest extent of the law.

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I am proud to be an original cosponsor of legislation introduced last week that would "prohibit the sending of a text message containing an unsolicited advertisement to a cellular telephone..."

Basically, this adds text messages to banned calls to cell phone numbers listed on the national do-not-call list.  The legislation dubbed the SMASH Act of 2008 (HR 5769) would allow the Federal Trade Commission to revise rules regulating this telemarketing practice.

We all know the success of the do-not-call list.  Now text ads are circumventing the law and in some cases, costing people money.  This bill would just keep up with technology and ban unsolicited text ads.

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As a member of the House Financial Services Committee, I called for answers from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson regarding the recent bailout of Bear Stearns. With the support of 23 Members, I sent a letter to Bernanke and Paulson asking for answers to a series of specific questions involving the Fed’s actions. I have already asked Financial Services Committee Chairman Barney Frank to hold a Congressional hearing about this issue but Chairman Frank has yet to respond.

It is critical that Congress carefully examine the Federal Reserve’s intervention in the bailout of Bear Stearns.  Our nation’s hardworking taxpayers, who will be expected to foot the bill for these costs, deserve a thorough analysis of the steps the Fed took and the reasoning behind their decisions. I will work to see that the questions and concerns of the American people are answered.

A copy of the letter is below:

Dear Chairman Bernanke and Secretary Paulson:

We are writing regarding the recent collapse of Bear Stearns and the subsequent actions taken by the Federal Reserve to facilitate Bear Stearns’ sale to J.P. Morgan Chase.  These steps have had an immediate impact on our nation’s financial markets and have the potential to drastically alter the future regulatory structure of our entire financial system.

For the first time since the Great Depression, the Federal Reserve voted to open the discount window to primary dealers.  While it has been suggested that this authority has been available to the Federal Reserve since 1932, the decision to use it at this time has raised questions about whether and when the Federal Reserve should intervene to help a particular industry or firm in the name of market stability.

With the Federal Reserve approving the financing arrangements of the sale of Bear Stearns to J.P. Morgan Chase, as well as guaranteeing $29 billion in securities currently held by Bear Stearns, the Federal Reserve has possibly exposed the American taxpayers to a tremendous amount of financial loss.  We have concerns that this will establish a precedent that could lead to future instances of companies in similar financial trouble expecting the same government intervention.

We know the long-term health of our economy is of the utmost importance to you both.  However, these extraordinary actions have raised a number of complex questions.  Below, we have included a list of some of the specific questions that we believe highlight areas of significant importance. 

Questions

1. In testimony before the Senate Banking Committee on April 3, 2008, it was indicated that the assets the Federal Reserve will accept as collateral for the $29 billion loan are highly-rated, that J.P. Morgan Chase will keep the riskiest and most complex Bear Stearns assets, and that the Federal Reserve set parameters for the quality of assets that it would or would not accept.  What was the minimum threshold for asset quality?

2.  The Securities and Exchange Commission (SEC) states that it monitored Bear Stearns’ capital and liquidity positions on a regular basis, and that levels of both capital and liquidity appeared adequate going into the week of March 11-17.  Given the subsequent rapid deterioration in Bear Stearns’ financial condition, does the SEC have the capability and/or authority it needs to assess risk in systemically-important broker/dealers, especially at the holding company level?

3.  Now that primary dealers are granted the privilege of borrowing directly from the Federal Reserve (through the Primary Dealer Credit Facility), should they be subject to the same oversight that commercial banks must undergo to be eligible to borrow at the discount window?  What are the possible negative implications of such regulations?

4.  Bear Stearns has been described by some as "too interconnected to fail," as opposed to "too big to fail."  How can regulators identify which firms are too interconnected to fail?  Also, some administration participants have justified federal involvement with this transaction by suggesting that one interconnected company could unilaterally bring down our country’s entire financial markets system.  How would that be possible in this instance?

5.  Why wasn’t the “loan” made as a traditional discount window loan to J.P. Morgan Chase?  If, as stated in President Geithner’s testimony to the Senate Banking Committee, the Federal Reserve did not have the authority to acquire an equity interest in J.P. Morgan Chase or Bear Stearns, what authority allows it to create and finance an LLC to purchase assets?

6.  If the $29 billion is not to be made available to J.P. Morgan Chase until the merger with Bear Stearns is completed, why is the loan necessary at all?  Why is J.P. Morgan Chase unwilling to hold assets that have been priced at current market value and are highly rated?

7.  In 1991, the Federal Deposit Insurance Corporation Improvement Act (FDICIA, P.L. 102-242, 105 Stat. 2236) set a limit on the Federal Deposit Insurance Corporation’s (FDIC) ability to borrow from Treasury at $30 billion.  The statute establishes certain standards, including rate of interest standards but leaves other terms to the Secretary of the Treasury and the FDIC.  At the pertinent part it reads:

The Corporation is authorized to borrow from the Treasury, and the Secretary of the Treasury is authorized and directed to loan to the Corporation on such terms as may be fixed by the Corporation and the Secretary, such funds as in the judgment of the Board of Directors of the Corporation are from time to time required for insurance purposes, not exceeding in the aggregate $30,000,000,000 outstanding at any one time, subject to the approval of the Secretary of the Treasury....Any such loan shall be used by the Corporation solely in carrying out its functions with respect to such insurance....(12 U.S.C. § 1824)

Did this $30 billion limit have any role in the Bear Stearns negotiations?  How did that figure emerge?

8.  A separate provision of the FDIC Act added by FDICIA requires the FDIC to resolve failed institutions on the basis of least cost to the insurance fund but permits the suspension of that requirement when following the least cost standard  “would have serious adverse effects on economic conditions or financial stability ... and ... any action or assistance [beyond what would be the least cost resolution] would avoid or mitigate such adverse effects.” [12U.S.C. § 1823(c)(4)(G)(i).]  This authority may not be invoked, however, without consultation with the President and the written recommendations from the FDIC and the Federal Reserve Board.

Was the President consulted? Were there any written findings by the Federal Reserve or the Department of the Treasury or any documents projecting the potential adverse effects without the intervention and the mitigation that would be effectuated by the intervention?

We appreciate your service to the country and look forward to working with you closely on these issues as we move forward.  Thank you for attention to these concerns. 

Sincerely,

Scott Garrett

Member of Congress

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Recently, I introduced legislation to push America forward toward a new solar energy future for America.  The “Zeroing In America Energy Act”, or ZIA Energy Act, authorizes the Secretary of Interior to begin leasing designated public lands to develop solar energy. 

At a time when we are struggling to meet our energy needs, we need a commitment to develop our own domestic energy resources. We need a multi-pronged approach to investing in our domestic energy sources such as solar, oil & gas, hydropower and wind.  We have at our fingertips the solution to our energy crises, we only need the courage to reach out and grab those solutions and produce the energy we need.

The bill would designate 6.4 million acres of public land throughout the western United States to be available for solar leasing and could generate up to 1000 gigawatts – enough to power 750,000,000 homes. 

The Southwestern United States has been called the Saudi Arabia of solar energy.  We have the resources, we have the knowledge, now all we need is the will to develop that resource and create the energy. 

The ZIA Energy Act can deliver that promise.

The legislation was inspired by the attached article in Scientific American in January 2008 titled “A Grand Plan for Solar Energy.”

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Today I attended a ceremony at the White House honoring Pope Benedict XVI. It was a blessing to be a part of the momentous occasion of Pope Benedict's visit to the White House. Like his predecessor, the Holy Father has struck a chord with the American people by serving as a humble servant of God, who is full of timeless wisdom. Pope Benedict reminded us how, during our earthly journey, we are compelled to promote the liberty and dignity of our fellow human beings. His message of renewal and hope touches people of all faiths and has a heartening effect for all humanity throughout our turbulent times. The Holy Father eloquently expressed the moral duty of public officials to serve the least of our brothers and sisters through a humane dialogue Founded upon faith and reason, the first principles upon which our free republic was founded. People of all faiths should pray for the Holy Father; embrace his message of renewal and hope; and wish him a happy birthday.

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The AMT must either be completely eliminated or, at the very least, indexed to inflation.

TODAY IS TAX DAY, the day when income taxes are due to the U.S. Federal Government.

For many of us, this day is greatly detested because of the demanding and burdensome task of preparing one's taxes. Continually adding up numbers and following the confusing tax code is enough to make anyone sick.

But the most dreaded part of preparing taxes is seeing exactly how much of your hard-earned money went to Uncle Sam this year for Washington politicians to spend.

This should not be the case. Americans should get to keep more of their money for their own family budget, not the federal one.

One of the biggest reasons New Jersey residents are paying too much in taxes is because the onerous system is outdated. Our current federal tax system is still subjecting taxpayers to the harsh Alternative Minimum Tax. Since my beginning days in Congress, I've been an outspoken critic of the AMT. That is because I know this tax really hits home for all Americans, particularly New Jerseyans.

AMT hammers New Jerseyans

The most recent data show that my constituents in the 5th District of New Jersey are greatly harmed by this tax, ranking as the seventh most impacted district by AMT. That means that out of 435 congressional districts in the nation, the residents of the 5th District pay more in taxes because of the AMT than 429 other congressional districts.

And to make matters worse, New Jerseyans are hit twice as hard because of the extremely high state and local tax burden. I think it's clear that something must be done to relieve New Jerseyans of these massive taxes.

The AMT must either be completely eliminated or, at the very least, indexed to inflation. This tax was created more than 30 years ago as a way to catch high-income individuals who avoided paying their taxes. This seems legitimate, trying to ensure all individuals pay their fair share of taxes.

Inflation ignored

Unfortunately, this law didn't take inflation into consideration. The income levels in 1969 that were considered wealthy continue to be applied today, This means millions of Americans will hit the income threshold and be forced to pay an AMT penalty when they file their 2008 taxes. Our nation's middle class families are now getting hit by this stealth tax and are being forced to pay the price for poor lawmaking.

Furthermore, the AMT also fails to allow for commonplace tax deductions and credits, including the deduction for state and local taxes and the home mortgage interest tax credit. It has been estimated that each year 4 million Americans are deprived of the various deductions and credits, further burdening our nation's taxpayers with a higher tax liability.

During the 2007 tax year, Congress waited until late December to extend a variety of tax credits and to approve a one-year "patch" to prevent the AMT from impacting many taxpayers.

Unfortunately, the IRS had already finalized their tax forms and created their software products, neither of which included these changes. Sadly, numerous taxpayers will end up paying higher taxes this year because they will not know of the deductions that they qualified for because they were unaware of them.

Restoring fairness

At the beginning of this congressional session, I reintroduced my AMT Middle Class Fairness Act, which would index the AMT to inflation and actually allow for a state and local tax deduction against it. I also introduced the Taxpayers Choice Act, which seeks to eliminate the AMT and restore fairness to the tax system, making it transparent, simple and efficient.

Fixing the Alternative Minimum Tax would help New Jersey families keep more of their money. With sky-high gas prices and rising grocery store bills, we should be putting more money back in the pockets of our nation's hardworking taxpayers.

It is critical that Congress make fixing our nation's tax system a priority. Washington politicians need to put their political agenda aside and support a commonsense tax policy that lifts the financial burden off our nation's taxpayers.

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General Petraeus and Ambassador Crocker gave a very honest and clear assessment of the situation on the ground in Iraq.  There is no doubt that Iraq is safer and more stable than it was a year ago, and we have our soldiers to thank for this undeniable success.

As the Representative for Fort Hood, the largest military base in the nation, I have the privilege of meeting with our soldiers both at home an on the ground in Iraq.  I can tell you that they believe strongly in their mission and the success they are achieving.  Violence in Iraq is down, and I have witnessed first-hand our American soldiers working with Iraqi forces to bring their country to a more secure state.  Political reconciliation is coming along slowly, but it is happening.  The Iraqi government has met 12 of the 18 benchmarks, while continuing to make progress on the remainder of them. 

We must realize that the stability of Iraq is fragile and attempt to pull out our troops prematurely will only devastate the progress being made in the region, putting the security of our country in grave danger.  General Petraeus is a man of integrity and we owe it to him and our troops the serious consideration of this report.  We also need to send our men and women in uniform the funds and resources they need to be both safe and successful. 

It is clear we have a choice to make here in Washington.  We can surrender our success, or we can put our political battles aside, work together to give our troops what they need to succeed, and bring them home under the American flag, not the white flag of defeat.

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As Ranking Member of the Small Business Subcommittee on Investigations and Oversight, I was pleased to hold a hearing today to discuss the impact of rising fuel prices on small businesses. The members called several expert witnesses to testify, including Dr. Vincent Orza, a small business owner and Dean of the Meinders School of Business at Oklahoma City University.

The small business owners and industry experts who testified today made it clear their businesses are feeling the pinch of rising fuel costs. Soaring energy prices reduce the profit margin for these businesses and can force both wage cuts on employees and price increases on consumers. The implications for our national economy are alarming.

 The testimony we heard today reinforces my convictions about the role of government in relation to American energy. Congress must take action to reduce the United States’ dependence on foreign oil by increasing domestic production. Doing so will help to provide consumer relief and alleviate our dangerous dependence on foreign energy sources.

 In the long term, our government should continue to aggressively encourage research into both conservation techniques and alternative energy sources. Nuclear energy, biofuels and wind and solar power will all play an important role in our energy future.

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Today, as a member of the House Financial Services Committee, I strongly urged Chairman Barney Frank to hold a hearing in order to further examine the current actions taken by the Federal Reserve in the recent sale to JP Morgan. Ranking Member Spencer Bachus (AL-6) and other members of the Financial Services Committee signed my letter in support.

I believe it is critical that Congress carefully examine the Federal Reserve’s intervention in the bailout of Bear Stearns. Our nation’s hardworking taxpayers, who will be expected to foot the bill for these costs, deserve a thorough analysis of the steps the Fed took and the reasoning behind their decisions.

A copy of the letter is below:

The Honorable Barney Frank
Chairman
Committee on Financial Services
2129 Rayburn House Office Building
Washington, DC 20515

Dear Chairman Frank:

We are writing to respectfully request you hold a hearing of the full Financial Services Committee regarding the recent collapse of the investment bank Bear Stearns and the subsequent actions taken by the Federal Reserve to facilitate Bear Stearns’ sale to J.P. Morgan Chase.  These steps have had an immediate impact on the financial markets and are also expected to have a long-term effect on our financial regulatory structure. 
           
For the first time since the Great Depression, the Fed voted to open its discount window to primary dealers.  While this authority has been available to the Fed since 1932, the decision to use it at this time has raised questions about whether and when the Fed should intervene to help a particular industry or firm in the name of market stability.

With the Fed approving the financing arrangements of the sale of Bear Stearns to J.P. Morgan Chase as well as guaranteeing $29 billion in securities currently held by Bear Stearns, the Fed has possibly exposed the American taxpayers to unknown amounts of financial loss and established a precedent that could lead to future instances of companies in similar financial trouble expecting the same assistance.

These extraordinary actions have raised a number of complex and multifaceted questions.  As members of the committee of jurisdiction over our nations’ financial markets and the regulatory bodies that oversee them, we feel it is imperative to have a full and public vetting of this unique situation.  Therefore, we strongly urge you to convene a hearing on this subject of the Financial Services Committee on the soonest possible date. 

Thank you for your consideration of this request. 

Sincerely,
           
Scott Garrett                                                               
Member of Congress      

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