Congressman Thornberry Releases Statement to the Speaker of the House

WASHINGTON, D.C. –Congressman Mac Thornberry (R-Clarendon) today issued the following statement to the Speaker after H.R. 3997, the Emergency Economic Stabilization Act, failed to pass the House by 23 votes:

Madam Speaker,

The issue before us is one of the most difficult decisions I have faced during my time in Congress. The reason it is so difficult is the concern about what will happen to our economy if this bill is not passed. But the bottom line is that this bill is an unprecedented intrusion by government into the economy of the country and is contrary to the common sense principles in which I believe. I have carefully weighed the opinion of many different sources, including those who have spent their professional lives in the financial sector and the American taxpayers I am privileged to represent.

I am convinced that the United States faces a serious economic crisis, centered on Wall Street and high risk financial institutions but with shock waves that could extend throughout the country. I am further convinced that in this situation some sort of government action is needed and appropriate.

In fact, Congress is partly responsible for this situation. Over the years, some in Congress have pushed government agencies and lenders to provide more loans than many could repay. Too many people borrowed too much money. Yet, those laws and regulations which helped to create this problem are not corrected in this legislation.

The core of the plan is to have the federal government buy assets which cannot be sold to anyone else. Those who have the most of these assets, often based on "zero-down loans" and "no doc/low doc" mortgage loans, will obviously benefit the most. Those who were more prudent in their lending will benefit less.

I understand that any measure will be somewhat unfair in that some of those who took the excessive risks and made unwise decisions will be protected from the full consequences of their decisions. Some degree of unfairness is inevitable.

But it is important to keep foremost in our minds that the foundation of the American economy is not Wall Street traders or multi-national banks. The foundation of our economy is American businesses and workers who pay their bills and taxes on time, who borrow responsibly and take reasonable risks, and create economic value, jobs, and a higher standard of living. If this measure damages them, it damages our present economy and our future. I am afraid that this bill does damage well-run companies and institutions, and it certainly damages the American taxpayer.

The only compelling argument I can find on behalf of this bill is that we will confront a credit crisis and severe recession if it does not pass. Obviously, I hope that will not happen. But failure of this specific proposal should not mean that we stop trying to find common sense answers to support our economy. Congress can return to work immediately, listening not just to the Secretary of the Treasury this time, but to commercial bankers and economists and taxpayers across the country. There are a number of good ideas which can be considered in a thorough but timely way. We should not rush into a flawed proposal that will have consequences that last for generations.