Capps (CA23) :: Press Release :: Capps Votes Again for Economic Rescue Bill

WASHINGTON, D.C. – Congresswoman Lois Capps today voted for an expanded version of the Emergency Economic Stabilization Act of 2008 (HR 1424). The bill implements an economic rescue package intended to address the growing financial crisis that has frozen credit markets and threatens to bring down the U.S. economy. It also includes important tax provisions that protect the middle class and support the production of alternative energy, and requires insurance companies to treat the coverage of mental health like other diseases. The bill passed 263-171.

“The House today took an extremely difficult but important step to protect our economy and the financial livelihood of all people on the South and Central Coasts,” Capps said. “The credit crisis gripping America is choking Main Street and affecting Americans of all walks of life. Just today the Administration announced that another 159,000 jobs were lost in September, the largest monthly loss in more than 5 years and the ninth straight month of job losses. That means we’ve lost nearly 800,000 jobs in the first nine months of this year.”

“I share my constituents’ deep anger over this situation created by the greed of lenders and Wall Street players, the inattentiveness of federal regulators, and the overall failure of the Bush Administration’s policies” she added. “We must act quickly and this proposal to meet this crisis is the best option we have. I know it would have been much easier for me to have taken the more popular route and voted against this measure, but I believe that would have been the wrong choice for my district and my country.”

The Congresswoman released a lengthy statement on the underlying economic rescue package earlier in the week (attached in this email). She released the following statement regarding the legislation before the House today that included the economic rescue package and additional tax and health care provisions:

Madame Speaker, I rise again in reluctant support of this legislation.

I spoke earlier this week about the necessity for the underlying economic rescue legislation and I stand by that statement. If anything, the events of the last week have demonstrated that point even more vividly.

The credit crisis that is gripping America is choking Main Street and affecting Americans of all walks of life. Businesses, small and large alike, are finding it more and more difficult to get credit to run their businesses. This slowdown is costing American jobs. Just today the Administration announced that another 159,000 jobs were lost in September, the largest monthly loss in more than 5 years. That means we’ve lost nearly 800,000 jobs in the first nine months of this year.

I share my constituents’ deep anger over this situation created by the greed of lenders and Wall Street players, the inattentiveness of federal regulators, and the overall failure of the Bush Administration’s policies. We must act quickly and this proposal to meet this crisis is the best option we have. I know it would be much easier for me to take the easier, more popular route and vote against this measure, but I believe that would be the wrong choice for my district and my country for all the reasons I laid out earlier in the week.

This legislation adds a number of provisions to the economic rescue package the House considered on Monday, most of which are unrelated to the financial crisis. I support many of them and oppose others.

First, the bill temporarily raises deposit insurance from $100,000 to $250,000 in federally insured banks and credit unions. This is a good step to increase confidence in our banking system and a long overdue update to this critical protection for the assets of millions of American families and small businesses.

Second, the bill protects some 22 million taxpayers from the effect of the Alternative Minimum Tax. This is a tax provision intended to keep the wealthiest in our society from avoiding all income taxes but, because it hasn’t been updated in decades, now threatens to ensnare millions of middle income taxpayers with higher taxes. I hope that in the next Congress we can permanently fix this increasingly difficult problem but we must at least stave off its ill effects for this year.

Third, the bill includes critically important mental health parity legislation. It would require insurance companies to treat coverage of mental health services the same as other medical services. As a public health nurse, I know there should be no distinction in the necessity of treating heart disease, bone disease, or mental health disease. I have long supported this effort to destigmatize mental health and ensure that Americans suffering from mental health problems can receive treatment. This is an extremely positive step forward for health care in America.

Fourth, the bill extends federal support for the development of wind, solar, geothermal and other renewable energy sources. I have been arguing for a 5-10 year extension of these provisions to encourage the development of alternative energy so we can finally break our crippling addiction to fossil fuels. Establishing a long term investment horizon for these efforts is critical to making that work. These extensions should be for longer than the 1-3 years included in this bill but they cannot be allowed to expire, which most would do by the end of this year.

Unfortunately, included in these energy tax provisions is support for so-called clean coal production and shale oil extraction. The oil and gas industry could not possibly be more profitable and needs more taxpayer support like Warren Buffett needs investment advice. In addition, both the oil and coal industries already received overly generous taxpayer subsidies in the Republican’s 2005 energy bill. I do not support these provisions and believe they should be removed or repealed in the next Congress.

Also, much of the cost of these energy tax breaks are not offset so they will increase the already huge Bush deficits. In an effort to reinstate fiscal discipline, House Democrats have consistently voted to pay for these alternative energy production tax breaks by closing corporate loopholes and other measures. It’s a shame the Senate cannot follow suit and we are faced with a take-it or leave-it choice on continuing these important alternative energy provisions.

Finally, I am very concerned about the inclusion of language giving the Securities and Exchange Commission (SEC) the go-ahead to alter or suspend so-called “mark to market” accounting principles. The SEC just issued what it calls “clarifications” on these rules at the behest of the financial services industry and I believe this could be a big mistake. Investors simply must be able to trust that a company’s financial statements give a clear and accurate portrait of the health of the company and “mark to market” is part of ensuring that is the case. I understand that today’s market condition’s make establishing prices for securities difficult, but we have to be careful that we don’t enable the kind of opaque accounting that has led to numerous financial debacles in recent years.

Despite my concerns about these provisions, I still believe it is in the best interests of the country to pass this legislation.

Pictured above: (center) Congresswoman Capps meets with Central Coast firefighters to discuss emergency preparedness.