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November 14, 2008
Even as the AJC ran a story today highlighting the worsening drought in Georgia, which you can click here to read, the U.S. Army Corps of Engineers was making positive changes for Lake Lanier. Today, the Corps granted a request made by Georgia Environmental Protection Division Director Dr. Carol Couch to decrease the amount of water released from Lake Lanier from now until the end of April 2009. This change will add more than 11 billion gallons of water storage in Lake Lanier, an amount equal to the water supply needs of Gwinnett County for approximately five months. While we must continue committing ourselves to water conservation, I am pleased that the Corps is actively working with the State of Georgia to increase the capacity of Lake Lanier.
To learn more about how Members of Congress are working to support water conservation and smart water allocation policies throughout the country, I encourage you to click here.
October 28, 2008
Today, we had a large panel testifying at the House Committee on Ways and Means’ hearing on “Economic Recovery, Job Creation and Investment in America.”
Most of those testifying at today’s hearing requested some kind of financial assistance in the form of a new Federal spending package ranging from building roads to repairing schools to expanding unemployment compensation and more.
Notwithstanding the merits of their requests, they were all holding their hands out for yet another piece of the Federal pie—pie funded by debt that must one day be paid by our children. In the midst of these individual requests, however, was the refreshing testimony given by Mark Sanford, the Governor of South Carolina and a former member of the U.S. House of Representatives. Governor Sanford didn't ask for a penny. In fact, he objected to the notion of any kind of new stimulus package—or any other new financial assistance/interference from the Federal government whatsoever. He instead pushed for Congress to simply give the states more freedom and control over the money the Federal government is already providing. Rather than have it write new checks, Governor Sanford asked that the Federal government instead explore alternative routes to economic recovery such as eliminating the onerous financial burdens placed on states by the Federal government—for instance, the states should be relieved of unfunded mandates that have cost the country “$131 billion over the last four years.” Keep in mind that South Carolina, like Georgia, has had its own struggles with education and infrastructure. In fact, where Georgia’s unemployment rate is currently 6.5%, South Carolina’s is a higher 7.3%, making it the fourth highest unemployment rate in the country. Governor Sanford also asked Congress to give the $150 billion that would be spent to stimulate the economy-- not to the states, not to large corporations, and not to another bailout--but back to the American taxpayers.
I admire Governor Sanford’s strong stand, and I concur—my position is that the Federal government should not interfere with what is, in principle, a free-market economy. Another stimulus package is a step backward and will not even make a dent in the problems that have been festering for years. By muddling market activity, the Federal government is simply prolonging this already challenging financial situation.
If you care to read more about the hearing, you can do so here. The page includes a list of the witnesses who testified today, their submitted written testimonies, and a link to a recording of the hearing itself.
October 23, 2008
October will be over next week, and, whether we like it or not, the holiday travel season will be upon us. We all dread those packed airports and the long lines waiting to get through security, worrying if we will make it though hassle-free. In that vein, I read a press release from the Department of Homeland Security this morning that provides some good information about current efforts to further improve the effectiveness of the Transportation Security Administration’s (TSA) “No-Fly” list.
Various civil rights groups have attempted to raise concern about the TSA’s passenger vetting process by issuing reports saying that millions of people are on the government’s “No-Fly” list, thereby increasing innocent travelers’ chances of being detained by airport security. You may be interested to know, however, that according to Department of Homeland Security Secretary Michael Chertoff fewer than 2,500 individuals are on the no-fly list and, of this number, only about 10% are U.S. citizens.
Additionally, in order to further prevent “false positives” and mistaken identities, TSA will implement the Secure Flight program in the next year. At its core, Secure Flight will involve TSA’s pre-screening of passengers by requiring their full name, date of birth, and gender at the time they place their reservation. Additionally, the program would shift the responsibility of list match-ups from individual airlines and general aviation aircraft to the TSA. If you are interested in learning more about how Secure Flight will impact you, please visit TSA’s website here.
October 3, 2008
Just a few minutes ago, I voted for a second time against the Economic Stabilization and Rehabilitation Act of 2008. Thousands of you contacted my office a week ago to encourage a “no” vote; and thousands more contacted me this week encouraging me to stand strong in my opposition to this bill. I appreciate hearing from all of you.
On Monday, almost all Georgians were speaking with one voice as 11 of Georgia’s 13 members of the U.S. House—Republicans and Democrats alike—voted “no” on behalf of their constituents. Today, we voted on virtually the same $700 billion bill that we defeated on Monday, except that today’s bill had an additional $110 billion in tax cuts and spending provisions. And today, 9 of Georgia’s 13 members of the U.S. House—again Republicans and Democrats alike—voted “no.” We continued to believe that action must be taken, but that this bill was absolutely not the right action. Nevertheless, over our objections, the bill passed and is now on its way to the President’s desk for his signature.
If you would like to read more, I invite you to click here to read a joint statement released by Georgia’s seven Republican Congressmen.
October 2, 2008
Have you heard the phrase “mark-to-market” in the financial discussions unfolding in Washington, New York, and across the nation? If you haven’t, you will. There are a lot of fingers pointing at the phrase because it is an accounting rule that many feel has played a substantial role in creating the current credit crisis.
In short, “mark-to-market” requires that lenders look at the marketplace where they have issued loans. If they have made loans in your neighborhood on several $300,000 houses, and suddenly another similar house sells for $250,000, “mark-to-market” rules require that the lender re-value its loan portfolio to say that instead of having a $300,000 house to back up each loan it now only has a $250,000 house. That seems fair enough, you might say. There is more.
Now that the lender has marked in his ledger that he only has $250,000 in security per house instead of $300,000, the government regulators that tell banking institutions how much cash they must have on hand to be solvent begin to tell the bank (if that is the lender) that it needs more cash on hand. Why? Because the bank used to have $300,000 per house in security and now it only has $250,000, according to mark-to-market rules. Since it has less security, it now needs more cash, say the regulators. Again, that seems fair enough, you might say. There is more.
Let’s say the lender bundled the mortgages of all of the homes in your neighborhood together with more home mortgages from Cumming, Covington, Monroe, Lawrenceville, and Winder. The lender then sells this package to a big bank. It would have to be a big bank because this would be a big package. Unfortunately for the big bank, however, the real estate bubble bursts and no one wants to buy giant packages of mortgages anymore. Since these mortgages are “packaged” together, mark-to-market rules now are not looking at the selling price of each house; instead they are looking at the selling price of similar packages. If no one wants these big packages any more, however, the value is zero, right? That is what mark to market accounting says. You and I know that we will continue to pay our mortgages and our homes will continue to have value, and while that certainly has value to the big bank, the fact that mark to market rules require the bank to value this big package at zero (because no one wants to buy it) rather than at full value (because the mortgages are being paid and the homes have value), the big bank must face the regulators again. These are same regulators as before who say that when your asset value goes down (to zero in this case), you must add cash to your balance sheet to compensate. That doesn’t seem fair, you might say, and here is the rub.
Since the big bank now needs to keep its cash, it quits lending money to you and me for houses, cars, businesses, etc., and now we have a credit crunch on our hands as this scenario is played out over and over again across the nation. And why? Not because people are defaulting on their mortgages, but simply because no one wants to buy a giant bundle of good mortgages packaged as a security.
I was in the lending business before I came to Congress. The loans that I made were always based on the ability of the company to pay me back. If I had been forced to sell my loans in the market, the value would have been zero. Nobody wanted the loans that I had. But to me, they were valuable. Americans generally pay their bills. They want their businesses to succeed, and they will go to great lengths to make that happen. The loans that I made—while valued in the marketplace at close to zero—were valuable to my customers and profitable for me.
That is where we are today. The real estate bubble has burst. Homes across the country are declining in value (though thankfully Georgia has been spared from a worst of these declines). It is true that if suddenly everyone wanted to give up their home to foreclosure that we would be glad that we have mark to market rules protecting the value of our banks. But you and I know that everyone doesn’t want to give up their home. Many of us have been living in the same home for years before the bubble and we’ll be living in the same home for years after. For us, the bank need not worry about the value of our home. It need only worry about whether we will pay our mortgage each month—which we have been doing for years and which we will continue to do. The same is true of new home buyers. Even though they bought at a high price in the bubble, they still want to keep their home, perhaps even grow old in it. And, eventually, the selling price of that home will rise once again. In the mean time, these buyers keep paying their bills, and loans held by the banks continue to have value.
While I recognize that mark-to-market accounting rules have added a great deal of transparency to the market, I also see that the rules’ effort to provide certainty is now providing uncertainty; which is why I am proposing a temporary suspension of these rules to aid with the current credit crunch. Whether these rules should ultimately be continued or ultimately repealed is a different question for a different day. My point is only this: before you ask me to invest $700 billion in mortgage securities that no one knows how to value, and to do this in the name of solving the credit crunch, why don’t we first suspend a well-intended rule that is having dangerous and unintended consequences to see if that helps to solve the problem. If it does, we just saved $700 billion. If it doesn’t, what have we lost?
I hear those of you who say, “Don’t lift a finger to help Wall Street.” And, I hear others who say, “Please help because as goes Wall Street, so goes Main Street.” My message to both of you is that we have a lot of options available to us…including regulatory relief and tax relief options that will make you both happy. I recognize that credit crunch is serious, and I want to be helpful in crafting a solution. But before I vote to mortgage my children’s and grandchildren’s future by spending another $700 billion that America does not have, I can guarantee you that I will have explored absolutely every other option possible.
September 28, 2008
Events are still moving very fast in Washington, and we are now seeing legislative language for the Financial Stabilization Plan that Treasury Secretary Paulson requested last week and that the Democratic Congressional leadership negotiated. This new legislative language, however, is substantially different from what Secretary Paulson and the Democrats agreed to. This version has many changes, many of which were negotiated by the House Republican Leadership at the request of literally thousands of you in the 7th District and hundreds of thousands from across the country.
I am still reading through this "final" version for the first time myself. But I wanted to post it immediately so that any of you who are interested could also read it and make your opinions on this version known. The links to the information are as follows:
Please take a look, forward to your friends if you like, and then click here to tell me what you think. Right now, it looks as though we’ll be asked to vote on this tomorrow morning (Monday, September 29th).
September 23, 2008
According to the Bureau of Labor Statistics (BLS), as of last month, the national unemployment was 6.1%. This is the highest unemployment rate in a decade. You can find more statistics like this at the BLS website.
There are myriad reasons for this rise, but our intrusive and punishing tax code that encourages corporations to move overseas and take American jobs with them in search of more favorable tax laws is certainly among them. Whenever capital is untaxed, worker productivity increases. Whenever productivity increases, the competitiveness of the American worker increases, as well.
In 2005, when we temporarily reduced corporate income taxes on money that American businesses brought back to America, more than $300 billion came home…and that was under a program that was incredibly restrictive. You’re probably asking yourself, “If companies will bring that much money home just because we lower a punitive tax, why is Washington talking about bailouts? Why don’t we just eliminate the punitive tax, and let American companies bring their own liquidity back into the American market place?” That is very fair question, and it is one that I am asking on your behalf in Washington right now.
September 16, 2008
Today the House will vote on H.R. 6899, Speaker Pelosi’s sham energy bill. I highly encourage you to read it over because this is a mockery of the legislation Republicans have called upon this Democratic Congress to bring forth after all these months.
Speaker Pelosi’s bill pays lip-service to energy exploration and turns its back on hard-working American families. It allows states to “opt-in” to a scheme granting energy companies the rights to explore between 50 and 100 miles offshore without having to pay a cent in royalties to the states. Moreover, Georgians will see their electricity bills spike thanks to a provision requiring electric companies to provide an increasing annual percentage of their electricity using renewable energy resources. Americans can’t afford to pay more for energy and the Democrats shouldn’t ask you to.
After the vote on H.R. 6899 tonight, follow this link to read my press release on today’s events.
September 9, 2008
One of the most fundamental freedoms we enjoy is the right to vote. The first Tuesday in November will arrive before you know it. The last day to register to vote is October 6, 2008. Whether you need to register, or know someone else who needs to, click on your county from the list below. The link will take you to a webpage that includes information on the registration and voting process as well as voting precincts in your area.
September 4, 2008
There are currently three severe weather bodies lurking off the southeastern coast of the United States: Tropical Storm Hanna, Hurricane Ike, and Tropical Storm Josephine. Early preparedness is critical as families brace themselves for the oncoming weather. You should know your evacuation routes and follow the instruction of local and state authorities as heavy storms approach. While the Seventh District is not in the direct path of Tropical Storm Hanna, torrential rains and heavy winds can still cause substantial damage and power outages, leaving you stranded for days without electricity and running water. I have included some helpful links below for your benefit:
To browse an archive of previous blogs, click here.