BOYD REJECTS BUSH BAILOUT PROPOSAL

BOYD REJECTS BUSH BAILOUT PROPOSAL, SUPPORTS RESPONSIBLE ADVANCE TO FINANCIAL INDUSTRY

Legislation would stabilize financial markets, guarantee taxpayers are repaid in full

Congressman Allen Boyd (D-North Florida) this week rejected President Bush's bailout proposal and supported a bipartisan plan in Congress to stabilize the American financial markets and protect the taxpayers.  On September 18, President Bush asked Congress for a $700 billion blank check to bailout Wall Street that Members of Congress on both sides of the aisle, including Congressman Boyd, flatly rejected. After considerable bipartisan cooperation, Congress completely overhauled the President's initial proposal and created a better bill that would allow for a staged advance of funds to the financial industry to help keep the economy moving and would guarantee that the taxpayers are repaid in full.  Despite being negotiated by leaders of both parties and receiving bipartisan support on the floor, the Financial Rescue Package (HR 3997) failed to pass in the House of Representatives by a very narrow margin. 

Financial experts across the board have agreed that if our financial institutions fail there would be a nationwide freeze on credit and lending and potentially catastrophic consequences for personal retirement and education savings.  Local banks would no longer be able to provide home, car, or student loans to people with good credit or to small businesses, and personal retirement accounts, such as pensions, 401(k)s, mutual funds, and education savings accounts, would become seriously vulnerable. 

"I have said for years that the current Administration's reckless fiscal policies over the last eight years would not go unanswered, and the volatility in the market is the result," Congressman Boyd said.  "Last week, the Administration put forward a bad bailout proposal to fix years of their bad fiscal policies.  Those of us in Congress rejected the

President's bailout proposal, and through a lot of bipartisan work, we created a better bill.  Democrats and Republicans came together and turned the Administration's gift to the financial industry into a responsible advance to the markets to spur confidence and stability."

"Don't get me wrong, even though we crafted a more responsible solution to our financial crisis, none of us who supported this bill like having to do this, but we have been told by countless economic experts that the consequences of inaction would be even more costly for our country and for the American people," Boyd continued.  "I believe that this advance to the financial industry is necessary to keep the American Dream alive, so that our banks can turn around and loan this money to the American people to buy a house or car, to start a small business, or to pay for college."

The bipartisan Financial Rescue Package would provide $250 billion immediately to stabilize the financial industry, and another $100 billion would be made available upon the President's request.  The final $350 billion would only be provided after Congressional authorization.

Congressman Boyd and the Blue Dog Coalition also insisted that the

Financial Rescue Package include a provision to protect taxpayers and restore much needed fiscal discipline to the package.  The Blue Dog provision is essentially a "taxpayers' insurance guarantee," which directs a future President to deliver a plan after five years to recover any potential remaining costs from Wall Street firms, not the taxpayers.

It also takes important steps to protect the future economic health of the country by ensuring that the implementation of the plan does not add to the country's already overwhelming debt burden.

Additionally, the Financial Rescue Package caps executive pay for firms that avail themselves of the package and includes strong oversight provisions.  The bill would increase Congressional oversight and establish a new Special Inspector General within the Treasury Department.

"Like many others from my generation, I grew up with two parents whose lives largely were shaped by the Great Depression," Boyd stated.  "My parents told me my entire life that we never wanted our country to get into that sort of financial situation again.  I took this advice from my parents to heart as I voted today.  Even as I saw that this legislation was going to fail, I believe that the emergency advance that this legislation would have provided is necessary to protect our homes, our small businesses, our healthcare coverage, our pensions, and our hard-earned tax dollars."

"This financial crisis has put a bad taste in all of our mouths, including myself, but if there is some good to come out of this, it is the attention that has been brought to our country's deteriorating fiscal state," said Boyd.  "We cannot wait for a crisis to occur before we address the challenges facing our nation.  Today's bill would only treat the symptoms of years of reckless fiscal and monetary policies. We must also fix our underlying fiscal problems.  These short term and long term fiscal and monetary problems demand immediate, bipartisan attention and solutions.  For the future of our nation and our economy, we must restore our fiscal integrity."