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On September 18, after months of emphasizing the strength of our economy, President Bush did an about-face and asked Congress for a $700 billion blank check to bail out Wall Street and put a stop to the impending financial crisis. I believe that the President’s request for Congressional action is a direct result of years of his Administration’s irresponsible fiscal and monetary policies that have now come to a head.
In addition to reckless borrow-and-spend fiscal policies over the last eight years, this Administration steered an unwise monetary policy that artificially propped up the financial markets through low interest rates and a lack of regulation. At the same time, many homeowners held the false assumption that home equity would continue to rise at unprecedented, historic rates. The intersection of these two bad acts is where we find ourselves today.
Members of Congress from both parties, including myself, flatly rejected the President’s bailout proposal. However, many of us recognized that the credit crunch is hitting all sectors of our economy, including the people and businesses in North Florida, and swift but careful, thoughtful action was needed on a more responsible financial rescue package that better protected the taxpayers.
During discussions about a financial rescue plan, I met with many economic experts from all different schools of thought and ideologies about the consequences of action versus inaction. These experts all agreed that the consequences of inaction would be devastating: local banks would no longer be able to provide home, car, or student loans to people with good credit or to small businesses, and personal retirement accounts would become seriously vulnerable.
We depend on banks and financial institutions to protect our life savings, expand our businesses, finance major family purchases, and send our children to college. I realize that spending hard-earned tax dollars to stabilize the banking industry, an industry in which we are all financially linked, is not popular. However, I believe the alternative, which was to do nothing, could lead to a scenario reminiscent of the Great Depression, and this is a situation in which I believe Congress had no choice but to act.
With all of the party leaders and the Administration at the table, Congress completely overhauled the President’s initial request and crafted a bipartisan bill that included strong taxpayer protections and increased oversight. The legislation is designed to allow the federal government to turn a profit on the assets it acquires and sells. Thanks to the Blue Dog Democrats, any assets that the plan fails to recoup will be repaid to the taxpayers in full by the financial industry.
I supported the first bill that came before the House of Representatives because I firmly believe that a responsible injection of funds into the market is necessary to protect our homes, our businesses, our healthcare coverage, our pensions, and our hard-earned tax dollars. Despite having bipartisan support and being crafted by leaders in both parties, this bill failed in the House by a very close vote.
Instead of working to make a better bill, the Senate added $152 billion in tax relief to the rescue plan, of which $110 billion was not paid for and must be borrowed. Not paying for our priorities is a large part of what got us in this financial mess in the first place. This bill deserved to be considered on its own merit and should not have been loaded down with other priorities that only compounded our financial problems.
While I was extremely displeased with the Senate’s fiscal irresponsibility, I voted for the second financial rescue package because our financial and economic outlook had not changed, and I believe that action was necessary to avert a financial crisis and in the best interest of the people of North Florida. My concerns lie not with Wall Street, but with the people, businesses, and local governments in North Florida and around the country that depend on loans and lines of credit from banks.
It is no secret that we have serious challenges before us as a nation, and the financial rescue bill only treats the symptoms of years of reckless fiscal and monetary policies by this Administration coupled with a lack of oversight by Congress. We must also fix our underlying fiscal and monetary problems. Our short term and long term fiscal and monetary problems demand immediate, bipartisan attention from our next President and the next Congress. As always, I remain committed to tackling these serious challenges, for the strength and well being of our great nation.
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For more information about the Financial Rescue Package, please click here.
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