A note from Senator Reid

[Drakkon]

I wrote before the first vote on the bailout bill pleading for him not to just accept the president's first proposal. I was kinda surprised at what I got back today - yes its just a form mail that I'm sure went out to many who wrote him on the issue - but it goes into great detail to explain his vote and what he proposed.

Dear Mr. Duke:

Thank you for contacting me regarding the current financial turmoil. I appreciate hearing from you about such an important issue.

The recent failure of several major financial institutions has made it evident that we are facing one of the worst economic crises in a generation. The freeze in our nation's credit markets has multiple and complex causes. It began as a capital crunch, with institutions experiencing rapid declines in asset values, set off initially by depreciation in mortgage-backed securities tied to mortgages in default and homes declining in value. Now there is a widespread lack of confidence in financial institutions and their ability to make good on their lending commitments, bringing much lending to a halt.

I worked hard to keep this problem from growing as it has. Recognizing that mortgage defaults and declining home values were the root cause of the current crisis, and that Nevada was ground zero for this phenomenon, I worked hard to pass the Housing and Economic Recovery Act of 2008 (P.L. 110-289) that President Bush signed into law on July 31, 2008. While I certainly understand the argument that the government should not intervene to support lenders or borrowers that made poor decisions about mortgages, I have repeatedly expressed my concern for the effects widespread foreclosures could have on Nevada's taxpayers, the national economy and the global financial markets. In addition to several provisions aimed at improving the Federal Housing Administration (FHA), the housing bill authorized the HOPE for Homeowners program. This voluntary program allows lenders to refinance the distressed loans of qualified borrowers with a new, fixed-rate, 30-year, mortgage insured by the FHA.

Unfortunately, this program did not take effect until October 1, 2008. In the meantime, several financial institutions continued to fail under the weight of bad loans and depleted capital. In response, the Bush Administration proposed that Congress provide the Treasury Secretary with a blank check to purchase bad assets without any oversight by establishing the Troubled Asset Relief Program (TARP). By no means do I take lightly the responsibility of approving a $700 billion rescue package, but we all have an interest in ensuring the stability and vitality of the financial market. That is why my colleagues in both the House and Senate worked in a bipartisan fashion to improve the Administration's proposal in order to provide more protection for taxpayers and ensure that their money was invested wisely.

First, we improved oversight of the asset-purchase program, so that Congress and the public would be able to see how taxpayer money was being spent. We also demanded that taxpayers receive warrants which give them a stake in future profits of any company benefiting from government intervention. In an effort to ensure that corporate executives are not rewarded for their failure with a golden parachute courtesy of the taxpayer, corporate executives of participating companies will face new restrictions on their compensation. We also required federal agencies to implement a plan for mitigating foreclosures on mortgages under their control and expanded the eligibility requirements for the Hope for Homeowners program. Lastly, we temporarily increased the FDIC limit for individual depositors from $100,000 to $250,000. This will help protect Americans' savings in the event of further bank failures.

Finally, I am pleased that this legislation was passed along with a number of other measures important to Nevadans, which I have been working hard to pass for years, including energy tax incentives, the Payment in Lieu of Taxes program, Alternative Minimum Tax relief, tax extenders and mental health parity. For more information regarding these measures, please visit my website at http://www.reid.senate.gov.

As you can see, this is a complex issue for policymakers, but you can rest assured that I will work hard to find the best solutions. While I regret that Congress had to intervene in the financial market in this manner, I am confident that this measure will help stabilize our economy and protect Main Street from the crisis on Wall Street. That is why this legislation had the bipartisan support of 337 members of Congress and was signed into law on October 3, 2008 (P.L. 110-343). It is my hope that we can utilize this support in the future to conduct the investigations necessary to determine the root of this financial crisis, hold the appropriate persons responsible, and establish regulatory reform to prevent this from occurring again in the future.


I appreciate hearing your thoughts regarding this matter and I certainly understand the concerns that you and many others have expressed. As my colleagues and I work to restore fiscal sanity, sustainability, and vitality to our nation's market, you can be certain that I will keep your thoughts and best interests in mind. I look forward to hearing from you in the near future.

I'm not fully convinced what hes saying here will solve the problem but it appears his office is doing a lot to cover their asses from every angle on the vote on the bill and his take on whats going on. Its the first letter I've gotten back after 3 I've sent so its a start...

 

[techs]

:thumbsup:

 

[cKGunslinger]

My Senator who voted for the measure:

Dear Mr. cK:

Thank you for contacting me regarding the Emergency Economic Stabilization Act of 2008. I welcome your thoughts and comments on this issue.

On September 19, 2008, Treasury Secretary Henry Paulson announced a plan by the Bush Administration to stabilize the financial services sector of the economy. This plan included broad authority for the Treasury Secretary to purchase troubled financial instruments with very limited oversight and few protections for taxpayers.

In July, I voted against a similar proposed bailout of Fannie Mae and Freddie Mac because it did not provide taxpayer protection and limits on executive compensation for a government owned entity. For the same reasons, I was not willing to support the Administration?s initial proposal, and I encouraged my colleagues to continue work on a plan that would protect taxpayers, provide strict oversight, and place limits on the benefits to executives who accept taxpayer assistance.

In the days following the Treasury Secretary?s announcement, concerns about the danger to the broader economy deepened. The high-profile failure of numerous financial institutions caused the commercial lending market to accumulate and hold cash. The credit markets effectively froze, making it difficult for consumers to obtain loans for purchases such as homes and automobiles. The lack of lending in these areas began to place further pressure on the troubled housing market and threatened to spread deeper into the economy. Similarly, many small and mid-sized businesses were finding it difficult to obtain financing to meet their payroll obligations and purchase inventory. Many cities were entering the bond market and getting no bids, even with AAA ratings. The current liquidity crisis still poses a real potential for significant job losses. After consulting with numerous financial experts, small businesses, and bankers in Texas, it became clear to me that normal commercial lending activity would not resume without action by Congress.

Despite this realization, I was still not inclined to support the Paulson plan. After weeks of negotiation, however, a bi-partisan compromise was reached. While there are provisions in the bill that I do not favor and would not have drafted, overall the need for action to stabilize the market and to protect the retirement savings of millions of Americans weighed heavily on my mind. Ultimately, I supported the Senate bill along with 73 of my colleagues. The bill we passed was a major improvement over the initial plan announced by Secretary Paulson.

We increased the deposit insurance cap from $100,000 to $250,000 so that families will have added protection for savings and retirement accounts. While the initial proposal authorized up to $700 billion to purchase distressed assets, the measure we passed takes a more cautious approach, initially authorizing $250 billion and requiring the approval from Congress and the President for additional funding. Importantly, the bill we passed includes restrictions on the benefits received by executives whose companies are selling some of their distressed assets to the government. In return for purchasing the assets, taxpayers will obtain an ownership stake in the companies. Many leading economists believe that the real estate market will turn around in the foreseeable future and government owned properties and assets will be sold at a profit. A provision in this bill that I supported requires any profits realized to be placed in the nation?s treasury to reduce the deficit. If, however, after five years the government is facing a loss in the program, the President must submit a plan to Congress recommending how the money will be recouped from financial services companies. I believe that these protections are a dramatic improvement over the Administration?s initial proposal.

The bill passed by the Senate included an important package of tax policy provisions. One of these provisions is an extension of the state and local sales tax deduction, which is a matter of fairness for states like Texas that do not have a state income tax. The average Texan will save $520 when they file their federal income tax forms next year. We also shielded low and middle-income taxpayers from higher taxes associated with the flawed alternative minimum tax (AMT) and included tax incentives to spur energy production and innovation including the wind energy production tax credit and the research and development tax credit.

As Texans, we have learned to take responsibility for our actions and being asked to pay for the mistakes of others is something many, including myself, find deeply troubling. However, after careful deliberation, I believe that the risks associated with doing nothing outweighed the risk of passing a less than perfect bill that nevertheless includes important protections for taxpayers. Economic evidence clearly suggested the problems were spreading into the broader economy. That is why I voted for the Emergency Economic Stabilization Act.

I appreciate hearing from you. Please do not hesitate to contact me on any issue of concern to you.

Sincerely,
Kay Bailey Hutchison
United States Senator

 

[bctbct]

Well they point out the pork they traded their vote for.