September 29, 2008

             Congressman Hall issued the following statement regarding his vote:

             “I represent the Fourth District of Texas in the U.S. House.  I voted ‘no’ on the Paulson bailout for many reasons.  Hundreds – and yes – thousands of those reasons are the number of  my constituents who called me and urged me to oppose this – the largest bailout in history – a bailout of Wall Street that immediately increases the national debt limit by 1.5 trillion dollars, from 9.8 trillion to 11.3 trillion. 

            “Even though the Republican Leadership has improved the bailout by breaking the 700 billion into three tranches – a Wall Street word for three parts – this only glosses over the vast outlay.  While they ask for 700 billion, we also have Fannie Mae and Freddie Mac requiring up to a trillion dollars – so say Wall Street analysts.  And so it indicates on page 68, Section 122, of H.R. 3997, where it authorizes increasing the statutory limit on public debt.

            “Another reason for my opposition is that there are Federal funds available that would have prevented the 700 billion outlay of taxpayer dollars.  One such source is the Federal Deposit Insurance Corporation (FDIC), which would be a better and more transparent method of putting public capital into the banks – capital spawned by financial transactions and on-hand – and not new capital required from taxpayers.  The FDIC has long had the power to handle failed banks, though they were limited in the FDIC Act of 1991 in their ability to provide assistance to struggling but still solvent banks.

            “However, there is an exception to the 1991 FDIC provision.  The President, Secretary Paulson, and two-thirds of the Federal Board can authorize such bank aid.  The White House has chosen not to trigger this exception, which would let the FDIC work with the likes of Wachovia, Morgan Stanley and others before they fail.  It certainly could apply to the present bailout.

           “I hope that our President – since the Paulson bailout has failed – will turn to using the approximately 400 billion dollars the Feds have available to provide stability in the market.