To the Citizens of Ohio’s Third Congressional District:
Last week, Congress considered the highly controversial $700 billion bailout of Wall Street financial institutions. I voted against this proposal and, in place of my regular weekly column, I ask you to please read this statement I submitted in the Congressional Record.
I oppose HR 1424 today because it does not address the real problems that caused this current financial crisis.
Madame Speaker, I voted against the financial bailout legislation that failed on Monday, with the hope that Congress could then work on different ideas for how to solve this problem. Instead, we have been given nearly the exact same proposal, with little modification, but a much larger price tag. Though I support taking action to help correct the damage done to our markets, I believe that making the wrong choice today places a risky and heavy burden on American taxpayers. Today’s legislation does not provide adequate assistance to homeowners, does not provide assistance to communities with large quantities of foreclosures, and does not prohibit the predatory lending practices that got us into the current crisis.
Madame Speaker, the Treasury Secretary and the Chairman of the Federal Reserve have both indicated that this may not work. Further, there is no backup plan if this proposal does not work. When discussing this bailout, it is important that people keep in mind that agreeing to the $700 billion price tag could be only the beginning. This bailout would transfer billions of dollars in mortgage backed securities to the federal government and provide no roadmap for what comes next. If these properties are foreclosed, the federal government is not prepared to become the nation’s largest homeowner without seriously considering how it will handle these mortgaged properties. If the federal government takes possession of these mortgages questions like who will replace the roofs and windows will abound.
That is why I have introduced HR 7113, the Preserve our Neighborhoods Act, a bill which would allow communities who have been hit hardest by the foreclosure crisis to purchase the mortgages acquired by the treasury during the course of the bailout. This would allow these local governments to take abandoned blighted properties at a discount and redevelop them for more productive use.
Additionally Madame Speaker, I have joined my colleague Congressman LaTourette in attempting to amend the current package to reduce the amount of the initial bailout payment, and increase Congress’s role in allocating additional funds. Both of these provisions would provide some common sense reforms to this bill – these provisions would add accountability to the bailout payment, and address a real problem that’s facing local communities.
But sadly Madame Speaker, these reforms are not a part of this package. Instead, we have essentially the same package we had before, only with tax credits and earmark spending. Any legislation that we bring forward should hold the right people accountable and prohibit the bad lending actions that led to this crisis. Today’s bill fails in this respect and therefore leaves us vulnerable to the same situation in the future.
While I am in favor of the tax extenders and have voted in favor of mental health parity, both of which are included in the current package, the underlying problem still remains: how does the federal government address the foreclosures that have led to this mess. Something should be done Madame Speaker. Something should be done to fix this problem. Unfortunately, HR 1424 is not the solution.