September 19, 2008

Economy

Obviously, the entire financial services sector is experiencing significant turmoil and impacting every other segment of our economy. Every day brings more news about troubled companies and struggling markets. The Treasury Secretary and the Federal Reserve have so far addressed these issues on a case-by-case basis. They helped with the sale of Bear Stearns, created new ways to pump credit into the economy and allowed Lehman Brothers to go under. Two months ago, Congress granted unprecedented powers to Treasury and the Federal Reserve to take control of Fannie Mae and Freddie Mac. I supported all these actions. When Treasury and the Federal Reserve decided that intervention was required with A.I.G., many people, including myself, wondered aloud if the current powers were being overused or if they were sufficient to deal with the crisis. Personally, my concern centers on transparency. What are the parameters that the Federal Reserve and Treasury will use to decide when involvement is necessary and when is it time to step aside and allow the market to work freely?

Regardless, it now seems apparent to most observers, including me, that Congress must revisit the issue. We may have reached the point where government has to do even more than we have done thus far. Today details are emerging about a plan to create a federal entity that will absorb bad debt in an effort to ease this financial crisis. Administration officials and Members of Congress will work together in the coming days to craft legislation. I expect action on this still-developing proposal next week and hope the proposal will be something I can support.

I think it is clear that we need a comprehensive approach to address this crisis and I am hopeful that the proposal being drafted will succeed in easing the instability. Earlier this week I wrote to Treasury Secretary Paulson and Federal Reserve Chairman Bernanke expressing concerns about putting taxpayer dollars at risk. We all have a stake in this crisis, directly and indirectly through our pensions and our savings, and we all have a general interest in the economy Ð so there is good reason for the government to get involved. However, that involvement must be balanced with assurances that the excesses that caused this mess will not be repeated and that those who led us into the crisis will not walk away unscathed while taxpayers are left holding the bag. I will closely review this emerging proposal, paying particular attention to the long and short term impact on the taxpayers.

I strongly believe that additional federal regulation is a necessary longer-term response to the current crisis. As a Member of the House Financial Services Committee, I will continue to work to ensure that a thorough review of current regulations occurs.

Energy

On Tuesday the House considered H.R. 6899: Comprehensive American Energy Security and Consumer Protection Act. Let me be clear at the outset, this bill is a classic compromise between those who oppose expanding drilling and those who believe it will help to lower energy costs. Without this compromise we were faced with the very real possibility that the current moratorium on drilling would expire and drilling would be allowed anywhere in the U.S. as close as 3 miles off the coast without any protections. H.R. 6899 would only allow drilling between 50 and 100 miles offshore, if a state passes legislation permitting such activity. If a state does not take this proactive step, then drilling will not proceed.

Drilling between 3 miles and 50 miles off the coast of the United States would be prohibited. H.R. 6899 does specifically exempt Georges Bank from drilling due to its high value as a fishery. Drilling in marine sanctuaries and marine monuments would also be prohibited, including in Stellwagen Bank. All new drilling fees would be deposited into a new Strategic Energy Reserve Fund and used to support the cost of legislation to increase domestic alternative energy, promote conservation, and conduct research on renewable energy. Funds could also be used for home heating and weatherization assistance. H.R. 6899 also includes $750 million in transit grants for urban areas over the next two fiscal years. If the full amount is appropriated, Massachusetts could receive $35 million in each of the next two fiscal years with $24 million of that amount going directly to the MBTA. It extends solar and wind production tax credits, provides $2.6 billion in energy conservation bonds, and $1.75 billion in clean renewable energy security bonds to install natural gas pumps at gas stations.

The legislation restores a ban on exporting Alaskan oil and requires oil companies to "use it or lose it" by drilling where they are already permitted to do so or risk losing their leases on the land in question. I do not think that drilling today will translate into lower prices at the pump tomorrow and I do not think that drilling will solve all our energy problems. I supported H.R. 6899 because I think it balances calls for expanded drilling with other initiatives to address our country's energy needs. I voted YES. H.R. 6899 passed and the entire vote is recorded below:

The House also considered H.R. 6604, The Commodity Market Transparency and Accountability Act. This legislation seeks to limit excessive speculation by requiring the Commodity Futures Trading Commission (CFTC) to increase market transparency by clearly defining index traders and swap dealers, and imposing strong reporting requirements on them. The CFTC will also oversee offshore trading so that it is subject to the same requirements as U.S. exchanges. H.R. 6604 requires the CFTC to limit the size of the stake that speculative investors can hold and gives the Commission the authority to impose position limits on the over-the-counter trading market. I voted YES. H.R. 6604 passed and the entire vote is recorded below:

Home Heating

This week the remaining $120 million in funding for the FY 2008 Low Income Home Energy Assistance Program (LIHEAP) was released to states. $11.5 million of this will go to Massachusetts . The entire New England Congressional Delegation asked the President to release this money last week and I appreciate his timely response. Although winter is not here yet, we know that everyone will experience significantly higher heating bills in the coming months, and we must do everything we can to help families struggling with higher prices.

Tunnel Inspection and Bridge Funding

H.R. 3999, the National Highway Bridge Reconstruction and Inspection Act, passed through a Senate Committee this week. You may recall that this legislation includes my provision requiring mandatory inspection of all highway tunnels.

My provision directs the Secretary of Transportation to set minimum inspection requirements for tunnels, the maximum amount of time permitted between inspections, and the establishment of a national certification program for highway tunnel inspectors. This increased scrutiny on tunnels will give us more information about our infrastructure and identify issues before they impact the safety of the traveling public.

H.R. 3999 authorizes $1 billion in Fiscal Year 2009 for the repair of structurally deficient bridges. It also directs states to develop a five year plan for addressing all highway bridges in need of repair. If this bill becomes law and is fully funded, Massachusetts would be eligible to receive more than $48 million for bridge repair work, the fourth highest amount in the country.

This bill must still pass the Senate, and be signed by the President. I will continue working to advance this measure, which provides needed transportation funding for Massachusetts and the rest of the country.

What's Up Next

Next week, the House is expected to consider a continuing resolution to fund the government beyond September 30th.