For Immediate Release

September 29, 2008

Rep. Dicks' Remarks on Emergency Economic Stabilization Act

WASHINGTON, D.C. – Rep. Norm Dicks issued the following statement on the Emergency Economic Stabilization Act:

"Less than two weeks ago, Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke issued a solemn warning to the President and Congress about the increasingly fragile state of the nation’s economic and banking system.  They expressed their belief that, without prompt Congressional action, widespread failure of financial institutions on Wall Street and across America threatened to send the nation into an economic crisis not experienced since the Great Depression. 

"In the past few months, as my colleagues know, several financial institutions in the United States have failed, have been acquired by other companies through government intervention, or have been sustained only with federal assistance.  In the last two weeks, the number of failures has accelerated at an alarming rate, including the failure of Washington Mutual in my state, resulting in the loss of thousands of jobs.  The Washington Mutual situation has underscored for me and my constituents the depth and seriousness of the crisis and has emphasized how our action is needed not simply for Wall Street, but also for Main Street.

"Even without the collapse of Washington Mutual, it is clear to me that the growing crisis of liquidity could have devastating effect on my constituents and on the middle class throughout America.  Companies failing because of an inability to manage their debt would not just be isolated to Lower Manhattan; indeed, all of our Congressional districts have businesses large and small that rely on the ability to access credit to survive.  These businesses may well fail, too, if this crisis is allowed to continue without intervention.  Retirees and workers alike are facing the loss of their retirement funds and pensions if they are invested in the markets on a scale not seen in 80 years.

"It is with that backdrop and with the advice of some of the wisest and most financially astute members of the House as well as financial experts from my state, that I am now convinced Congress must act quickly to avoid these disastrous consequences.

"It was obvious to me that the legislative proposal initially drafted by the Bush Administration was overly broad and lacking of any substantive or independent oversight by Congress or any clear safeguards for American taxpayers.  After 10 days of intense, often around-the-clock negotiations, the original proposal drafted by Treasury Secretary Paulson has been dramatically improved in the legislation that is under consideration by the House of Representatives today.  In addition to helping stabilize the U.S. economy by authorizing the Treasury to acquire mortgage-backed securities, enabling the release of credit for American consumers and businesses, this bill provides strict, independent oversight to assure that the program is carried out properly.  The provisions of this legislation will help existing homeowners to stay in their homes and continue to make payments and the bill includes specific provisions to ensure that taxpayers are insulated from any losses sustained in this program.  And I am encouraged that, for the first time, the bill places clear restrictions on so-called “golden parachutes” and executive compensation for companies participating in the new program.  

"I believe the revised version of this legislation represents a substantially more responsible and prudent means of addressing this crisis, and it is my intention to support it.   I recognize that many of my own constituents have deep reservations about this package.   So do I.  I recognize that it may not be perfect.  But I believe it is a responsible action and that it is in the best interests of our nation at this critical time.  And I also believe that the consequences of not acting today could be devastating.   It is therefore my intention to support this legislation."

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