February 13, 2009

Treasury Secretary Geithner

On Tuesday, new Treasury Secretary Timothy Geithner released the Administration's blueprint for stabilizing the troubled banking system, a key contributor to the current economic crisis. While I am encouraged by some of the measures described, I am concerned over the lack of detail provided and I encourage Secretary Geithner to quickly furnish additional information.

One of the primary components of the plan involves dedicating up to $1 trillion in funds to create a public-private partnership to buy up some of the toxic assets clogging bank balance sheets. This is a significant federal investment on top of the $700 billion already allocated through the Troubled Asset Relief Program (TARP). We need more information on how exactly this arrangement will work, including how private investors will be persuaded to participate and how assets will be valued.

The plan unveiled this week also includes a commitment to greater transparency when it comes to detailing how financial institutions are using federal funds, a limit on executive compensation and a requirement that banks increase their lending activities. Additionally, the plan calls for $50 billion in foreclosure mitigation, a long overdue investment that still may not be enough to stabilize the housing market.

I understand that the new Administration needs time to formulate approaches that they believe will best address the economic crisis we are facing, and I am prepared to give them that time. However, I certainly hope that Secretary Geithner will get to work quickly filling out the details of the outline he shared this week.

Bank CEOs

On Wednesday, the House Committee on Financial Services heard testimony from the eight financial institutions which received assistance under the first wave of the Troubled Asset Relief Program (TARP). The hearing focused on how these institutions used those funds.

Recent reports from the Government Accountability Office, the Congressional Oversight Panel, and the Special Inspector General for TARP have reported on the lack of accountability by TARP recipients. In addition, the reports indicated that the institutions do not track how the funds are being used, although they have said they are using TARP assistance in manners which they view as consistent with the goals of the program.

The U.S. Special Inspector General for TARP recently announced that all TARP recipients must report how they used the funds. I look forward to reviewing these disclosures to ensure that taxpayer dollars were appropriately spent.

Economic Stimulus

Today the House considered the conference report on H.R. 1: the American Recovery and Reinvestment Act of 2009. I voted in favor of this legislation two weeks ago when it passed the House because, while I did not agree with some of its provisions such as an overreliance on tax cuts, I believe the need to stimulate our economy quickly necessitates Congressional action now.

The Senate subsequently took up debate on its own version of the bill and passed legislation that differed from ours in some very significant ways. For example, in order to win bipartisan support — in the form of three Republican votes — the Senate increased the tax cuts by expanding a homebuyer credit and adding a car buyer incentive. At the same time, it cut $39 billion from state fiscal stabilization funding, $20 billion in school modernization and construction, $10.3 billion in COBRA health care for the unemployed, and $3 billion in highway formula funds.

I and many of my colleagues in the House advocated for a conference report on the recovery bill that would add back some of the most vital funding taken out by the Senate. The ultimate product of the conference committee follows through on President Obama's pledge to give a tax cut to 95% of working Americans, and also restores money to many of the programs that will stimulate our economy most. The conference report, while not perfect, will create millions of jobs, and invest in transportation and infrastructure, education, science research, health care, and housing programs.

I remain convinced that swift action is necessary, so I decided to support an imperfect bill that will nonetheless have a deep and immediate impact. I voted YES. The H.R. 1 conference report passed the House and the entire vote is recorded below:

What's Up Next

A district work period is scheduled for next week. The next votes in the House are scheduled for Monday, February 23rd.