The United States remains the greatest country in the world but there is no doubt we are facing difficult economic times right now. We are in a serious recession and we must be willing to tackle it by putting aside partisan politics and sticking to the core principles of our founding fathers of a free market and limited government. I believe many of our problems can be traced back to the housing market and that is where our recovery must start. We must get to the root of the problem, rather than addressing only the symptoms.
Four-Point Plan for Recovery
Here is my four-part plan for addressing our nation’s economic ills:
I believe jump-starting the demand for housing is essential to boosting the economy. We must fix housing first. To that end, I introduced the home buyer tax credit in the Senate, which passed for first-time home buyers at the beginning of 2009. In November 2009, the home buyer tax credit was extended and expanded with overwhelming support in Congress to include “move up” buyers, the cost of which is offset and will not add to the national debt.
Second, all homeowners should be eligible for the re-financing opportunities outlined by President Obama to help homeowners in trouble. We should not punish responsible homeowners or deny them access to the proposed re-financing opportunities.
Third, the Securities and Exchange Commission must reinstate the Uptick Rule in order to stabilize the markets and protect the American consumer from traders forcing down the price of a stock. The market deterioration was impacted by short sellers rushing to the market, shorting financial stocks and accelerating the decline of those values. The SEC should reinstate the Uptick Rule to ensure that traders are not coming into the market to take advantage of these difficult economic times.
Finally, the mark-to-market accounting rules (FAS 114) are disproportionately penalizing the very people we serve. Given the declines our nation has seen in mortgage-backed securities and in real-estate, the mark-to-market rules have caused tremendous problems for our nation’s banks. These rules should be replaced with a mechanism of amortization or “smoothing” to absorb the assets over time. This will allow the absorption of those assets over time to be more reflective of reality and less reflective of the dire straits that our nation is currently in today.
Financial Crisis Commission
We must learn what led to this financial crisis so that we make sure we never repeat it again. I have introduced, and Congress has now passed, legislation to create a Financial Crisis Inquiry Commission to fully investigate the near collapse of our financial system and the loss of tens of trillions of dollars. It is imperative that we gather all the facts and legislate based on facts as we seek to recover from today’s financial crisis. The legislation now goes to the President’s desk for his signature into law.
My 10-member, bipartisan Financial Crisis Commission will be modeled after the 9-11 Commission, which thoroughly and independently investigated the failures leading up to the September 11, 2001, terrorist attacks and made sound recommendations on where we needed to improve to prevent another attack in the future. The Financial Crisis Commission will have 18 months to investigate all the circumstances that led to this financial crisis. The panel will have subpoena power and will have the authority to refer to the U.S. Attorney General and state attorneys general any evidence that institutions or individuals may have violated existing laws.
At the end of its investigation, the Commission will report to the President and to the Congress its recommendations for statutory or regulatory changes necessary to protect our country from a repeat of this financial collapse.
Economic Stimulus Bill
I could not support President Obama’s economic stimulus bill because it contained too little funding for stimulative items and too much funding for items that will provide no boost to the economy. In addition, Democrats stripped out my homebuyer tax credit from the final version of the bill, and I believe that one item would go a long way toward restoring the housing market and our economy. Congress passed a similar homebuyer tax credit in 1975 when our nation faced a struggling housing market every bit as bad as today’s. The results were clear and swift - buyers came back to the market, absorbed the standing inventory and turned the market around.
Unfortunately, even though my homebuyer tax credit passed the Senate unanimously, the Democrats deleted it from the final version of the bill. Senator Chuck Schumer, D-N.Y., admitted on ‘Face the Nation,’ that he and other Democrats stripped the homebuyer tax credit from the bill to punish me for voting against the Senate version of the bill. The only one who is truly punished by their actions is the American taxpayer.
Troubled Asset Relief Program (TARP)
On October 1, 2008, the House and Senate passed H.R.1424, the Emergency Economic Stabilization Act. This bipartisan financial package was designed to stabilize credit and restore confidence in U.S. financial markets. Given the information I received in October 2008, there is no doubt that this legislation was absolutely critical at that moment to unclogging the financial markets, freeing up credit to the average American and over time restoring the American economy to what it has been and always will be – the best entrepreneurial, capitalistic system in the world.
The Administration, however, then used the money in several different ways than what was planned originally, and the credit markets did not respond as strongly we had hoped. As a result, I could not support the release of the remaining funds. On January 12, 2009, at the request of then President-elect Obama, President Bush transmitted an official request to release the second tranche of funds from the Troubled Asset Relief Program. On January 15, 2009, I voted in favor of “resolution of disapproval” of the release of this second tranche of $350 billion to the Treasury Secretary. Unfortunately, the Senate rejected the “resolution of disapproval” and the money was released.
I have worked hard to demand accountability from federal regulators who are overseeing the distribution of these funds. I have condemned those institutions that have taken this taxpayer money and still given out large bonuses or held lavish retreats. I also have demanded answers on behalf of Georgia banks that have applied for TARP funds only to face long delays in getting a response.
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