Congress Had to Act to Protect Main Street from Wall Street
October 9, 2008
By Senator Mitch McConnell
Nothing’s more frustrating than having to clean up the mess made by the poor decisions of others. Yet that’s just what Congress had to do recently, when it passed an unprecedented financial stabilization plan to prevent the trouble on Wall Street from spreading to Main Street.
I share Kentuckians’ frustration that the actions of a few threatened to throw our nation’s economy into chaos. I understand your concerns that this crisis could affect your own financial security. I heard from a lot of you in recent weeks—and I want to explain what I think government must do to make sure a financial calamity like this never happens again.
It is clear that America is facing the most severe economic crisis in a generation. Starting in September, Treasury Department officials and the chairman of the Federal Reserve warned that the problems in our financial markets caused by the misdeeds of a few imperiled our entire financial system.
But I didn’t have to take the so-called experts’ word for it. Thousands of you wrote my office to express your opinions. Many were furious, as I was, that the foolish decisions and bad behavior of others required the government to step in to stabilize the economy.
But it was also clear that, no matter who was to blame for the impending catastrophe, ordinary Kentuckians would be hurt the most—homeowners, small-business owners, retirees and students.
A small-business owner in LaGrange with 100 employees said the interest rate on his building had increased by 400 percent in a week, threatening his ability to run his business and pay his employees.
A 68-year-old retiree from Bowling Green worried that his retirement savings would dwindle away, and wondered whether he would be better off burying his money in the backyard.
A couple in Louisville wrote about a friend who cashed in his 401(k) retirement account to pay off his mortgage and confessed they were thinking about doing the same thing.
The fear and uncertainty of many was best summed up by a retired school counselor from Lawrenceburg. “I have never written to any senator or congressman before now…[but] this is so important to our government and its citizens,” she said. “I cannot afford to see my small retirement savings vanish.”
I heard your concerns, and took them to heart. Congress had to act. But we couldn’t pass just anything. I resolved that I could only vote for a financial-stabilization plan that met four important criteria:
1) It had to protect the taxpayers, making sure to stabilize the economy in a fiscally responsible manner without rewarding unacceptable behavior;
2) It had to include strong oversight of the Treasury Department, to ensure transparency so Congress and the American people could see how their money was being invested;
3) It had to enforce accountability for senior executives of failing companies, by limiting their pay and regulating any “golden parachutes” or other excessive benefits as a result of their poor business decisions;
4) And it had to ensure that every dollar of profit would go only toward reducing the national debt—not to new government spending we don’t need and can’t afford.
I insisted on these four points and flatly rejected repeated attempts to load the bill up with a slew of new spending programs. I’m pleased the bill that became law met every one of these important principles.
Of course, we are not out of the woods yet. It leaves a bad taste in my mouth to have the government intervene because a few people made reckless business judgments. But with millions at risk of losing all should our Main Street economy collapse, we had to act.
As we work through this problem, Congress must closely monitor the implementation of the plan to make sure it helps people on Main Street, not Wall Street. We must swiftly punish anyone found guilty of fraud or other violations of the law.
And we must continue to identify and fix the underlying causes of this crisis, to ensure it never happens again. Government made the unpleasant choice to step in and staunch the bleeding—this time. But as the American people made clear in recent weeks, even once is once too many.
Senator McConnell is the Senate Republican Leader and only the second Kentuckian to lead his party in the U.S. Senate.
Nothing’s more frustrating than having to clean up the mess made by the poor decisions of others. Yet that’s just what Congress had to do recently, when it passed an unprecedented financial stabilization plan to prevent the trouble on Wall Street from spreading to Main Street.
I share Kentuckians’ frustration that the actions of a few threatened to throw our nation’s economy into chaos. I understand your concerns that this crisis could affect your own financial security. I heard from a lot of you in recent weeks—and I want to explain what I think government must do to make sure a financial calamity like this never happens again.
It is clear that America is facing the most severe economic crisis in a generation. Starting in September, Treasury Department officials and the chairman of the Federal Reserve warned that the problems in our financial markets caused by the misdeeds of a few imperiled our entire financial system.
But I didn’t have to take the so-called experts’ word for it. Thousands of you wrote my office to express your opinions. Many were furious, as I was, that the foolish decisions and bad behavior of others required the government to step in to stabilize the economy.
But it was also clear that, no matter who was to blame for the impending catastrophe, ordinary Kentuckians would be hurt the most—homeowners, small-business owners, retirees and students.
A small-business owner in LaGrange with 100 employees said the interest rate on his building had increased by 400 percent in a week, threatening his ability to run his business and pay his employees.
A 68-year-old retiree from Bowling Green worried that his retirement savings would dwindle away, and wondered whether he would be better off burying his money in the backyard.
A couple in Louisville wrote about a friend who cashed in his 401(k) retirement account to pay off his mortgage and confessed they were thinking about doing the same thing.
The fear and uncertainty of many was best summed up by a retired school counselor from Lawrenceburg. “I have never written to any senator or congressman before now…[but] this is so important to our government and its citizens,” she said. “I cannot afford to see my small retirement savings vanish.”
I heard your concerns, and took them to heart. Congress had to act. But we couldn’t pass just anything. I resolved that I could only vote for a financial-stabilization plan that met four important criteria:
1) It had to protect the taxpayers, making sure to stabilize the economy in a fiscally responsible manner without rewarding unacceptable behavior;
2) It had to include strong oversight of the Treasury Department, to ensure transparency so Congress and the American people could see how their money was being invested;
3) It had to enforce accountability for senior executives of failing companies, by limiting their pay and regulating any “golden parachutes” or other excessive benefits as a result of their poor business decisions;
4) And it had to ensure that every dollar of profit would go only toward reducing the national debt—not to new government spending we don’t need and can’t afford.
I insisted on these four points and flatly rejected repeated attempts to load the bill up with a slew of new spending programs. I’m pleased the bill that became law met every one of these important principles.
Of course, we are not out of the woods yet. It leaves a bad taste in my mouth to have the government intervene because a few people made reckless business judgments. But with millions at risk of losing all should our Main Street economy collapse, we had to act.
As we work through this problem, Congress must closely monitor the implementation of the plan to make sure it helps people on Main Street, not Wall Street. We must swiftly punish anyone found guilty of fraud or other violations of the law.
And we must continue to identify and fix the underlying causes of this crisis, to ensure it never happens again. Government made the unpleasant choice to step in and staunch the bleeding—this time. But as the American people made clear in recent weeks, even once is once too many.
Senator McConnell is the Senate Republican Leader and only the second Kentuckian to lead his party in the U.S. Senate.