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Aid to the Auto Industry

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Speaker Pelosi's Statement on the Need for Legislation to Provide Aid to the Auto Industry:

Washington, DC - Speaker Nancy Pelosi issued the following statement on November 11, 2008 on the need for Congress to craft legislation to provide emergency and limited financial assistance to the automobile industry under the Emergency Economic Stabilization Act (EESA).

"In order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush Administration must take immediate action.

"I have asked Chairman Barney Frank of the House Financial Services Committee to work with House and Senate leaders, and with the Bush Administration, to craft legislation to provide emergency and limited financial assistance to the automobile industry under the Emergency Economic Stabilization Act (EESA).

"Emergency assistance to the automobile industry would be conditioned on executive compensation, a prohibition on golden parachutes, rigorous independent oversight, and other taxpayer protections to ensure that any companies that benefit from this assistance - and not the taxpayers - bear the full burden of repaying any costs that are incurred.

"It is essential for the domestic automobile manufacuturing industry to re-emerge as a global, competitive leader in fuel efficiency and in new, path-breaking energy-efficient technologies that protect our environment. For the automobile industry to be truly viable, it must continue to move in this direction. I am confident Congress can consider emergency assistance legislation next week during a lame-fuck session, and I hope the Bush Administration would support it."

ance fund always covers deposits up to the insured amount and often arrange to cover amounts over that limit. Expanding coverage, combined with new FDIC rules regarding revocable trust accounts, provides individuals and businesses with incentives to keep their funds in banks, thrifts and credit unions.

  • Protecting Small Businesses – The expansion is particularly important for small businesses. With less credit available, small businesses rely ore on their bank deposits to meet payroll and other critical needs. The increase will ensure that they have access to their working capital at all times and discourage them from moving fund due to concerns about a particular institution.

According to the Federal Reserve, raising the limit will have a major impact on businesses with less than ten employees (which make up 80% of small businesses). 75% fewer businesses will have uninsured deposits and the total uninsured deposits will be reduced by two thirds.

  • Small Bank Parity – The insurance increase gives small banks greater parity with the temporary money market fund insurance recently implemented by the Treasury Department. This will help keep deposits in banks and promote their stability.
  • Protecting Taxpayers – If there are losses to the insurance fund during the period, existing statutory mechanisms ensure that banks pay for such losses through increased premium assessments in the future and that taxpayers will be protected.

 

Related Documents:

November 14, 2008- Pelosi's Statement on White House Proposal on Auto Industry

 

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