Holden, Dent comment on bail-out bill

There were conflicting votes coming from U.S. Representatives covering the Northern Berks County region. Democrat Tim Holden voted against a "bail-out" twice this week while Republican Charles Dent voted for Friday's bill.

Each Rep. issued a statement following the vote. They are here. Also, look for a more well-formed story in next week's Item.

Holden: "The section of the bill dealing with the financial crisis the House of Representatives voted on today was the same bill I voted against only four days ago. The issues I found most troubling were not changed.

(1)The bill now spends over $700 billion of taxpayers' money and we don't even know if this is the actual cost. It could cost taxpayers even more;

(2)The bill does not have limits on salaries paid to CEOs of bailed out firms;

(3)The bill allows foreign governments to dump their toxic assets on the U.S. Treasury;

(4)The bill establishes a Financial Stability Oversight Board and a Congressional Board. However, these boards have no real authority to halt, delay or alter any decisions, only critique;

(5)The bill only says that the President must submit to Congress in 2013 a revenue bill that recoups from the financial industry the taxpayers' net losses. This bill should automatically enact revenue increases.

The financial crisis we now face is due in large part to the incompetence, arrogance, and overall greed of Wall Street CEOs. We should not be voting to reward their bad behavior! Unfortunately, I do not believe this bill addresses the root of the problems facing our financial institutions. There are other alternatives. For example, former FDIC Chairman Bill Isaac, who was chairman during the S&L crisis, has laid out a number of ideas which include: (1)the FDIC should issue net worth certificates; (2) the FDIC should insure bank's general creditors against losses, not just depositors; (3) the SEC suspend the mark to marketing accounting rule.

Added into this bill is a provision increasing the FDIC insurance to $250,000 which I support. In addition, my record also reflects my past support for AMT relief for middle class Americans, mental health parity, and extending tax credits for renewable energy. These provisions should not have been included in this bailout bill."

Dent:

“We’re faced with a historic choice – use the full faith and credit of the United States to help restore capital to our markets, or run the risk that they will freeze up, potentially leaving large numbers of Americans unable to conduct everyday business,” Congressman Dent said. “Many Americans on both sides of this issue have feelings of anger, anxiety, trepidation, and concern, and they have every right to feel that way. This legislation is not what I would have written, and I made several efforts to change it – some successfully, some unsuccessfully. Options are limited. The fact is we do have a credit crisis, and if we do not enact legislation, we risk Americans’ retirement savings, education accounts, mortgages, and jobs here in our community.”

Throughout the development of this legislation, Congressman Dent has been engaged with constituents, experts and officials to define the problem and find solutions. At the outset of this crisis, he spoke with many individuals, community bankers and small business leaders in the Fifteenth District to get their input.

Rep. Dent rejected the bill as proposed Monday because he felt is was rushed and contained too few protections for American taxpayers.

“That was not a vote for inaction – it was a vote to find better solutions,” Congressman Dent said. “And we found many. I worked hard to make sure this legislation isn’t just about Wall Street, but protects the people on Hamilton Street, Broad Street and Northampton Street.”

Congressman Dent initiated a call Wednesday to Federal Reserve Chairman Ben Bernanke, who assured Congressman Dent the credit situation “isn’t stable” and that if it is not addressed relatively soon, “there will be a quick and severe downturn” in the economy.

Rep. Dent joined several colleagues Thursday in an effort to amend the bill to reduce the taxpayer outlay for the Troubled Assets Relief Program (TARP) to $250 billion and remove controversial tax provisions added by the Senate. However, the Speaker refused all amendments.

Congressman Dent still noted significant improvement in today’s legislation over the original Administration request for up to $700 billion to purchase underperforming assets in the market. Now the up-front authority to the Secretary of the Treasury is for $350 billion, after which Congress can reconvene and end the TARP program if it proves unsatisfactory.

Several taxpayer protections include an insurance plan paid for by Wall Street and strict limits on executive compensation for companies that receive federal assistance. Those protections would provide assurances that Wall Street assumes a significant share of the risk, and that CEOs do not profit at taxpayers’ expense. These remain in the Senate version.

Congressman Dent also received an assurance from Treasury Secretary Hank Paulson that measures will curb foreign banks’ access to these funds. To be eligible for the program, a bank must be established and regulated under the laws of the United States.

The bill increases the Federal Deposit Insurance Corporation (FDIC) limits to better protect the American people's money and restore some faith in their financial institutions. The current level, $100,000, was set in 1980. Today it only covers about 63 percent of all deposits. Congressman Dent insisted on this change Sunday evening during lengthy meetings. The Senate bill included an increase to $250,000 through 2009. Congressman Dent is co-author of legislation to raise the level to $300,000.

This process led to the revision of “mark-to-market” accounting rules, which have clearly contributed to current financial problems. Congressman Dent insisted on this revision as well and has sought the Securities and Exchange Commission (SEC) to suspend this detrimental rule, which was enacted last year.

The rescue legislation also protects 21 million middle-class families from getting hammered by the Alternative Minimum Tax (AMT) for tax year 2008. The Senate-passed bipartisan economic rescue plan protects working families from the AMT – an unfair tax, initially intended to affect a handful of wealthy individuals in the 1960s, but grew to affect millions of middle-class Americans. Without action, 52,086 families in the Fifteenth District would be hit with an average tax hike of $2,500.

The bill extends critical energy tax credits and incentives to encourage conservation and the development of alternative and renewable energy technologies such as wind, solar, geo-thermal, hydrogen fuel cell, bio-mass and clean coal, a growing business sector and critical component to economic resurgence.

Most importantly, Congressman Dent said that Congress’ work is far from done.

“Taxpayers still have a say, and I’ll be watching closely to assure this legislation does what is intended on their behalf,” Congressman Dent said.

Congressman Dent will seek action by federal prosecutors to hold to account any individuals whose actions contributed to the financial crisis.

And, the Congressman said he will continue to push for legislation that will better serve the economic recovery in our communities, such as tax relief for small businesses.

“In 1776, Thomas Paine wrote to his countrymen, ‘These are the times that try men’s souls,’ and in the Republic’s history we’ve had many,” Congressman Dent said. “Americans have faced fiscal and banking challenges before. From Alexander Hamilton, to Andrew Jackson, to Franklin Roosevelt, to Ronald Reagan, leaders have been called on to make decisions they might not have made under different circumstances. But circumstances dictated this vote. The legislative process is often difficult and arduous but I am confident in the votes I cast this week. I believe now that Americans, as we always have, will work out our economic problems and find ourselves a stronger and better nation.”