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Emergency Economic Stabilization Act of 2008

Floor Speech

Date: Sept. 29, 2008
Location: Washington, DC

EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 -- (House of Representatives - September 29, 2008)


Mr. LEWIS of California. Madam Speaker, I rise in support of the measure before us.

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Madam Speaker, there is a sense of urgency in the Capitol. We all know that this urgency is real: we have seen the largest U.S. bank failure in history, the demise of century-old Wall Street firms, and a nearly total freeze of our credit system.

Everyone, Republican and Democrat, is keenly aware that our economy is in dire straits. It seems increasingly clear that unless we in Congress allow the Federal Government to take bold steps, we are facing a serious recession or worse.

Treasury Chief Henry Paulson--backed by President Bush--has laid out a plan that would commit up to $700 billion to relieve the pressure on the credit system by buying bad mortgage debts and other ``toxic assets.''

The American people are rightly furious that their tax dollars will go to ``reward'' the businesses and business people who they believe got us into this mess. Most who have called my office forcefully said ``I've paid my bills, I shouldn't have to pay their bills, too.''

Frankly, I'm furious, also. The idea of spending taxpayer dollars to prop up risky investments keeps me awake at night. It goes against all the principles I have lived by--personal responsibility, smaller government, reliance on the free market.

But we cannot afford to simply look at this as angry taxpayers who believe we should just let the greed gamblers fail. The stakes are too great for that.

Uncle Sam has been involved in controversial bailouts before. There was the bailout of Chrysler in the '80s and later of Mexico in the '90s. On the optimistic side, in both instances, the dollars delivered were repaid including interest. Thus, some suggest that as our own marketplace improves, these bailouts could very well be repaid and perhaps even lead to some profits.

Earlier this week Chairman Bernanke reminded us that Wall Street is an abstraction. The internal credit markets that allow banks to borrow money from each other are hard to understand for our constituents--and for most of us, as well. I have heard constituents--and some members--say we shouldn't worry about the lack of credit between banks.

But the failure of our credit system has broad. implications, not only for the high rollers in Manhattan, but also for the families and small businesses of the Inland Empire.

When local business owners do not have cash today for payroll but know they will in the future, they can turn to their bank and get a short-term loan to pay their employees, stay open and help build the local economy.

When families do not have cash to buy a home or a car, they turn to their bank to get a mortgage, create wealth and help build the local economy.

When high school students do not have cash to pay for college, they turn to their bank to get a student loan. When those students graduate, they enter the workforce and help build the local economy.

When banks stop lending between themselves, they soon stop lending to everyone else and economic expansion at the local level stops. The crisis on Wall Street becomes the crisis on Main Street.

The liquidity crisis is a linchpin of the broader economic crisis facing our constituents. This crisis has already hit our seniors in retirement and those looking at retirement. Even savvy retirement age constituents who made sound investment choices are not immune to our current market downturn. Should we refuse to act swiftly, those who rely on investment income and do not have the luxury of time to wait for long-term market adjustments will have even less money for food, housing and medical needs.

In my own district and yours, we are seeing clear signs that a downturn in the financial markets impacts city and county investments and puts important public projects at risk. Can we afford to increase that risk to local growth?

There is no question that investing in the market also poses risks, but if we can reduce market uncertainty, those risks are reduced for everyone. That is the only way to protect the investments made by seniors who built our economy's foundation and localities serving our constituents.

Allowing the markets to crash and leaving Wall Street to its own devices does punish the decisionmakers who fueled this crisis. But we all know it won't stop there. Millions of Americans will suffer the consequences, even those who felt they were being careful with their retirement nest egg.

There is no question that we in Congress must move deliberately and do everything we can to reduce or eliminate the risk to taxpayer funds. And whatever action is taken by Congress, we must make certain that those who got us into this mess do not profit further from the solutions we develop.

But we cannot avoid risk. Ultimately, we must face the realization that doing nothing will cause a potential catastrophe, and the suffering won't be felt just on Wall Street. It will be on every Main Street in America.