House passes Economic Stabilization Act
10/3/2008
Washington, D.C.
News
U.S. HOUSE PASSES EMERGENCY ECONOMIC STABILIZATION ACT
WASHINGTON, D.C. - Congressman Silvestre Reyes (D-El Paso) today joined a bipartisan majority in passing legislation to bring stability to the nation's troubled financial system. The Emergency Economic Stabilization Act of 2008 (H.R. 1424) will restore liquidity to U.S. financial institutions to help prevent Wall Street's troubles from affecting ordinary Americans. The measure passed by a vote of 263-171, and the President later signed the bill into law.
"I am upset that years of Wall Street greed have put us in this situation, but without decisive action, we fear the current lending freeze will have severe consequences for families and small business owners as loans become increasingly scarce," Congressman Reyes said. "Although this legislation is not perfect, it is vastly different from the administration's request for a 'blank check.' This bipartisan compromise includes greater protections for taxpayers, strict oversight and new regulations that will limit executive pay, and measures to help ordinary Americans at risk of foreclosure.
The Emergency Economic Stabilization Act of 2008 will enable the Department of Treasury to purchase mortgage-backed assets from financial institutions so that banks may continue providing loans which are essential to economic growth. The plan will reimburse taxpayers through partial ownership in participating companies and other measures that will recover assets from Wall Street corporations to recoup potential losses. Congressman Silvestre Reyes joined Democratic leaders in urging greater protections for taxpayers and more oversight. If the cost to the taxpayers is not paid in full within five years, the legislation directs a future President to deliver a plan to Congress to recover the remaining costs from Wall Street firms.
The legislation eliminates multi-million dollar golden parachutes for executives who retire from failing companies and places limits on executive compensation, and establishes strong independent oversight and transparency to ensure accountability.
Three separate oversight entities will closely monitor the Treasury's implementation and management of the plan. A board appointed by bipartisan leaders of Congress will have the authority to overturn the Treasury's decisions, and a new Inspector General will monitor all decisions made by the Secretary. The Government Accountability Office will also conduct audits to prevent waste, fraud, and abuse. The bill establishes meaningful judicial review of the Treasury Secretary's actions, and requires that all transactions under this plan be posted online for the public viewing.
H.R. 1424 provides tax relief and other measures to help ordinary Americans. The legislation provides tax cuts for over 20 million families who would otherwise see an increase in their tax liability due to the Alternative Minimum Tax (AMT). Nearly 22,000 households in El Paso would have been at risk of paying higher taxes without the passage of this AMT fix. The bill also includes a 10-year extension of the state and local tax deduction that will allow El Pasoans to continue deducting the sales tax from their federal income tax liability.
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Vincent M. Perez
202-225-4831
vincent.perez@mail.house.gov
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