VOTES FOR ALTERNATIVE PLAN TO CURB ABUSES IN THE FINANCE INUDSTRY

Washington, Dec 11, 2009 - “This legislation expands the powers of the very agencies that failed to catch the problems that created the financial crisis – it rewards a Federal Reserve that pursued irresponsible credit policies and that ineffectively conducted its regulatory supervision,” stated Rep. Cliff Stearns (R-Sixth). “Shockingly, it also fails to reform either Fannie Mae and Freddie Mac, and it promotes inefficiency by blunting market discipline through government guarantees that protect creditors against loss. The bill also authorizes the taxation of businesses without the approval of Congress while making permanent the TARP (Troubled Asset Relief Program) policies that have squandered billions of taxpayer dollars.”

“I supported the alternative plan that would end the bailout of financial institutions and that would create a new chapter in the bankruptcy code for non-bank financial institutions that would protect taxpayers from covering the greed and excesses of failing firms,” explained Stearns.

The House today approved H.R. 4173, which permanently extends the bailout authorities used by the Treasury Department and the Federal Reserve to give taxpayer funds to the creditors and counterparties of failed Wall Street firms. In addition, the measure imposes a tax of $150 billion on large financial firms, many of which did not contribute to the financial crisis. The legislation also expands the power of the Federal Reserve Bank and creates a Credit Czar with authority to restrict access to credit and impose taxes on consumers and small businesses.

Added Stearns, “Instead of supporting this massive federal intrusion in the financial markets, I voted for an alternative that, in addition to creating a new chapter in the bankruptcy code, increases civil and criminal penalties for fraud, establishes a council to issue uniformed consumer protection rules, and reforms the over-the-counter derivatives market.”&

Stearns opposed establishing TARP and joined in urging Treasury Geithner to refrain from extending TARP into 2010, yet Geithner approved the extension of TARP. “The Inspector General For TARP has stated that the program lacks transparency, which prevents us from determining where the money is going and how it is spent,” concluded Stearns. “Real reform means curbing questionable financial transactions and taking taxpayers off the hook for the failure of these firms.”