E-Newsletter - December 2008
With important debates ongoing about our domestic auto industry as well as proposals for an economic stimulus package, and November’s job losses affecting a staggering 533,000 American workers, Congressman Sestak remained focused on his constituents’ concerns about the economy. The Congressman strongly supported action to assist U.S. automobile companies and brought together people in his District impacted by their struggles. Furthermore, he engaged people in the region about the overall economy’s effect on specific industries and, above all, maintained his emphasis on the need for transparency and accountability in all government actions. In addition, his efforts helped bring about a fair settlement for the hundreds of thousands aggrieved in a bank fraud case. At home, the Congressman continued to travel to various facilities and events to ensure accessibility to his constituents and engage regional leaders about improved care for Veterans.
*For the most complete and up-to-date information on Congressman Sestak’s work in Washington and in the 7th Congressional District, please visit http://sestak.house.gov
Addressing Concerns about the Economy
Calling for action to save a critical industry: Taking a strong stance on the way to deal with a domestic auto industry on the brink of collapse, Congressman Sestak ardently supported and helped the House pass the measures in the Auto Industry Financing and Restructuring Act. The proposal provided bridge loans until March 31, 2009, to sustain the industry -- while demanding strict accountability for taxpayer funds and industry restructuring to achieve viability, international competitiveness, fuel efficiency, and reduced emissions.
He supported intervention by the executive branch, but stressed the importance of the transparency and accountability measures in the legislation, which would hold the car companies accountable for developing and implementing a long-term restructuring plan, and mandate the return of wrongly-earned bonuses. The bill additionally required the protection of taxpayer funds through warrants and restructuring to meet fuel efficiency and emissions requirements. In correspondence with President Bush, the Congressman stressed his position that government intervention was not about saving the present industry, which made significant mistakes, but rather the need for a bridge to put in place the building blocks for a transformed, lean, competitive industry that can be a strong source of jobs and a restructured manufacturing capability necessary for our economic security, while avoiding the devastating near-term loss of confidence in our challenged economy.
“While I believe in letting market forces work in normal times, we are not in normal times,” said Congressman Sestak. “This industry accounts for about four percent of all GDP and ten percent of U.S. Industrial production and supports about 2-3 million American jobs. I recently visited one company headquartered in my district called Southco - which makes state of the art mechanical and electronic latches for the auto industry, as well as for the aerospace industry. If the auto industry collapses, Southco and many other businesses like it would be directly impacted.”
For a comprehensive review of the Congressman’s views regarding the House auto industry proposal you can visit http://sestak.house.gov/apps/list/speech/pa07_sestak/081215_Autoletter.shtml.
Meeting with local business people impacted by auto crisis: At this critical time for the health of domestic auto companies, Congressman Sestak brought together representatives from 14 dealerships across the Seventh Congressional District to explain his position on the approach needed to deal with the struggles of an industry vital to a national economic recovery. Attendees had the opportunity to offer their perspectives on ways the government can most effectively intervene to preserve an industry responsible for millions of jobs. The Congressman has made clear that the methods used to assist the auto industry must reflect the fact that dealerships are small businesses, which are responsible for more than 70 percent of job creation.
Enacting proposals to offer relief to seniors and small businesses: Congressman Sestak voted for, and the House passed, the Worker, Retiree, and Employer Recovery Act of 2008 (H.R. 7327), which provides individual taxpayer relief in the form of a one-year suspension of the Required Minimum Distribution rule (RMD) regardless of total retirement account balances, and targeted pension funding relief for small businesses. Congressman Sestak’s earlier introduction of H.R. 7293, the Financial Security in Retirement Act, which suspends the RMD rule, and his strong letters to Secretary of the Treasury Paulson calling for changes to the Pension Protection Act (PPA), helped provide the impetus for House passage of this bill. Present IRA regulations require holders of IRA/401-k accounts to withdraw a minimum amount every year after they reach 70.5 years of age. In addition, the Congressman wrote to Secretary Paulson on two occasions urging needed changes to the PPA, including allowing single-employer plans to “smooth” out their unexpected asset losses and adjust the transition to the new funding rules established by the PPA.
Examining effects of economic downturn on Technology and Health Care industries: Recognizing the broad impact of our fiscal crisis, the Congressman addressed specific issues that he and his colleagues would need to address to support the technology and health care industries. Speaking to an audience of sixty leaders in the technology industry at the SMART (Strengthening the Mid Atlantic Region for Tomorrow) luncheon, the Congressman mentioned that slowing venture capital activity is evidence by the financial reports for the second quarter when 56 science and technology related venture capital transactions generated $4.7 billion, compared with 97 deals raising $8.8 billion during the same period in 2007. “We must restore the building blocks that sustain employment and create new, high value jobs for the future,” said Congressman Sestak. “I believe that further investments in future technologies are required to foster improvements in job creation. Being successful in the global economy requires a highly skilled and talented workforce in many ground-breaking industries, such as technology and life sciences.”
At the Children Hospital of Philadelphia’s (CHOP’s) bimonthly leadership meeting, the Congressman particularly emphasized the difficulty that medical students would encounter in paying for necessary education in certain fields and the potential that doctors would accept fewer patients who receive Medicare and Medicaid because those programs pay less. To deal with the prospect that doctors would accept fewer Medicare and Medicaid patients, many of whom are now struggling even more financially, the Congressman advocated for fixing the formula that determines how doctors are reimbursed for their services through Medicare (Sustainable Growth Rate). In addition, the fewer number and higher interest rates of student loans would influence medical students in their selection of a specialty area, specifically causing further declines in the already diminishing supply of primary care physicians, who are paid less on average.
Continuing pledge to change the tone in Washington: Having made accountability, transparency and bipartisanship the themes of his work in legislation and on local issues, Congressman Sestak discussed with Bob Edgar, President and CEO of Common Cause, ways to offer citizens comprehensive information about actions of their elected officials. “Our government can only operate most effectively if there is full disclosure of officials’ actions and the influences that impact their decision-making,” said Congressman Sestak. “The most important point on which Bob and I agree is that 2008 is very much the same as 1974 in that voters still want accountability in government. On top of the specific concerns we addressed today, I pledge to continue to push for legislation that establishes an independent ethics commission, a push that Bob started when he arrived on Capitol Hill. Members of Congress must recognize that we serve to benefit the people we represent. We should be held to the highest ethical standards, especially in regard to avoiding activities that compromise our ability to accomplish this objective.”
The meeting complemented Congressman Sestak’s ongoing efforts with regard to the economic crisis. The Congressman has written to Secretary Paulson noting that the “restoration of public confidence in our governmental and financial institutions can not begin until the American taxpayers see consistent enforcement of the oversight provisions – and behavior from the financial institutions acknowledging that many of them share the responsibility for the economic crisis that has engulfed our country and the rest of the global economy.” Furthermore, the Congressman wrote to Speaker Nancy Pelosi in November to ask her to join him in demanding Secretary Paulson follow the accountability measures specified in the Stabilization bill, and to United States Attorney General Michael Mukasey requesting him to “conduct an appropriate and thorough investigation into any and all financial institutions, corporations, and individuals that are suspect of criminal action relating to our current economic crisis.”
Fair Restitution for Bank Fraud
Congressman Sestak has announced that as a result of his efforts, together with Congressman Edward J. Markey (MA-07) and Congressman Barney Frank (MA-04), Wachovia Bank will begin mailing 1,500 checks totaling more than $314,000 to constituents of Pennsylvania’s Seventh District. More than a year ago, the Office of the Comptroller of the Currency (OCC) began an investigation into the bank’s treatment and lack of controls over fraudulent activities conducted by several telemarketers and third party payment processors. Wachovia's lack of oversight and action caused substantial harm to a large number of victims - including a number of elderly groups. Congressmen Sestak, Markey and Frank actively fought to reverse the original settlement in favor of a proactive reimbursement plan. Their actions included letters to the Comptroller of the Currency and the filing of an amicus brief. The Court in this case called for a restitution process that proactively identified fraud victims and mailed them the reimbursement checks. As a result, 742,000 checks for about $150 million will be distributed directly to victims.
“Particularly in times like this, it is important to restore the public trust in our institutions,” said Congressman Sestak. “This reimbursement will be important for the constituents involved – many of them elderly individuals who had their scarce resources drained from their bank accounts and also then had to pay overdraft fees.”
Improved Care for Our Veterans
In a meeting with leaders at the Philadelphia VA Medical Center, including the Executive Director, Congressman Sestak discussed the ways and means necessary to see that returning Veterans would receive the medical treatment they earned. He cited a recent example of a Veteran’s cases his District Office handled. In this particular instance, a service member was discharged from the military with mental health problems that eventually contributed to his homelessness, adding to the startling proportion of Veterans among the homeless population, more than 25 percent. With many Veterans initiatives needed to build on the successes of the 110th Congress, which presided over the largest ever increase in VA funding, the Congressman stressed the need to make certain that those who served our nation would leave the military assured that proper health benefits, education assistance and job opportunities were in place.
“As we move into 2009, I want to work as a partner with the VA and Gen. Eric K. Shinseki, the next Secretary of the Department of Veterans Affairs,” said Congressman Sestak. “The General is ideally suited to engage the many issues that confront the VA. He was a ‘Soldiers’ Soldier’ and is now a Veterans’ Veteran. A significant purpose of this meeting was to ensure that we are on the same page in the Greater Delaware Valley in determining ways to measure success, as well as legislation and community programs needed to provide Veterans the aid they need and deserve. Veterans should experience a seamless transition from leaving active duty to receiving inpatient and outpatient care – after a thorough diagnosis – and a timely processing of claims.”
Around the 7th
Focusing efforts on how to best aid local economy: This month Congressman Sestak continued to engage a variety of people in the region about initiatives needed to benefit our economy. In addition to the meetings with auto dealers, Strengthening the Mid Atlantic Region for Tomorrow (SMART) and Children’s Hospital of Philadelphia (detailed above), the Congressman lead a forum held by the Swarthmore Economic Discussion Group, which included Swarthmore College faculty and members of the community, to provide for a dialogue on the economic standing of the nation. In addition, he addressed small business issues through a number of discussions, including a meeting with the head of a real estate company in Montgomery County, and in depth conversations with representatives from the Delaware County and Tri-County Chambers of Commerce. Moreover, he participated in an event hosted by the Greater Philadelphia Chamber of Commerce, a Small Business Administration roundtable on the credit crunch and the Best and Brightest Forum on Medical Innovation at which he addressed ways to preserve America’s competitiveness in that area.
“Events like these are crucial to maintaining an open exchange between lawmakers and those they represent,” said Congressman Sestak. “I welcome the chance to hear, first hand, the concerns citizens have as the economy enters a second year of recession. My constituents need to know government is working for them in every possible way especially in how their tax dollars are used addressing problems in the financial and auto industries.”
Connecting local organizations to vitalize the economy: Congressman Sestak met with the administration of the Welcoming Center for New Pennsylvanians in Upper Darby to discuss a proposal put forward for the Center to offer services to Delaware County Community College. The Welcoming Center provides assistance to newly arrived individuals from around the world to give them access to economic and workforce opportunities in the region. Since its inception in 2003, it has serviced more than 4,000 people originating from more than 70 nations. “Maintaining economic security must be the top priority for our country. I believe that a steady influx of new consumers, workers, and innovators can revitalize Pennsylvania's aging population, renew its neighborhoods, and re-energize our economy,” said Congressman Sestak. “I applaud the efforts by the Welcoming Center to better the lives of these new Americans as well as the economy here in Pennsylvania. The history of America is written and lived by immigrants, and it is critical to ensure that we utilize their talent and labor, providing them with the opportunities this country offers.”
Encouraging education in finances for youth: Congressman Sestak visited Springfield High School, speaking with students, faculty, and representatives of the Franklin Mint Federal Credit Union. He toured the school’s Student Operated Branch and discussed with students the importance of economic education. The facility is a traditional branch of the credit union, staffed by students and supervised by representatives from the Franklin Mint. The on-site branch offers students, faculty, staff, and parents a full service financial institution where they can deposit funds, open free savings and checking accounts and apply for loans. Of the 4,000 high school seniors tested in 2004, only 6.1 percent received higher than a "C" and the average score was a failing 52.3 percent. In addition, personal savings as a percentage of income dropped to negative one percent in 2006, the lowest since the Great Depression.
Celebrating the holiday season by taking part in traditional local events: Racing back and forth across streets in Marcus Hook, Brookhaven and Upper Darby, Congressman Sestak greeted as many of his constituents as possible as he enjoyed the festive atmosphere of each municipality’s annual holiday parade. “What a wonderful opportunity to interact with the people I represent in a relaxed setting,” said Congressman Sestak. “These events allow people to put aside challenges they may be facing to spend time with neighbors and show their community pride. I especially thank the participating local businesses and officials for taking an active role in the community and helping to organize the parade.”
Special Notes:
Military Handbooks has announced the release of a new 2008 handbook for military personnel, the 2008 Guard and Reserve Military Handbook. The handbook, written specifically for members of the Reserve Component, includes a variety of information about military pay, benefits, and education. It addresses various aspects of the Reserve Component, including: drill pay and enlistment bonuses; allowances like BAS and BAH; re-employment rights; education and training benefits specific to the Guard and Reserve; health care; and retirement. To download your own copy of this handbook, simply go to their Web site, www.militaryhandbooks.com and submit your request.
Federal Deposit Insurance Coverage has significantly increased, primarily as a result of a temporary boost in the basic insurance limit from $100,000 to $250,000. The Federal Deposit Insurance Corporation has issued an explanation of the new changes along with tips and information to help bank customers better understand their insurance coverage and how to be sure all their deposits are fully protected. “Your New, Higher FDIC Insurance Coverage” can be read or printed at www.fdic.gov/consumers/consumer/news/cnfall08. To order up to two free paper copies, use the online form on that same Web page or call the Federal Citizen Information Center toll-free at 1-888-8- PUEBLO (1-888-878-3256) weekdays from 8:00 a.m. to 8:00 p.m. Eastern Time and ask for Department 89
