While I am in agreement with the Secretary that the state of the financial markets called for some form of government involvement, I held two serious concerns with his approach. First, I believe this plan would undermine the free market from promoting economic growth. Today, our system rewards innovators and entrepreneurs, but Paulson's plan subsidizes poorly managed companies at the expense of more responsible and competitive companies and the taxpayer. In so doing, this bill represents one of the greatest intrusions of the government into the free market in our history and it is a precedent I fear will be exploited to justify even greater federal intrusion into our own lives. Second, our government does not have the expertise or incentive to run Secretary Paulson's plan effectively or efficiently. Under the terms of the plan, our government would purchase thousands of mortgages and hold them for five years, or more, until the market improves. As it stands now we have neither the manpower nor the knowledge base to purchase, administer and sell mortgages on such a scale. For proof, we have to look no farther than the Recovery Trust Corporation from the Savings and Loan bailout of the 1980's which ultimately cost the taxpayer dearly because of mismanagement and private manipulation. Far too often in recent years people have looked to the
government for answers only to be met with waste and incompetence. We cannot allow that to happen again.
Ultimately, when the bill came before the House of Representatives on September 29, 2008, I joined with the majority of my colleagues to defeat the bill and it failed by a vote of 205-228. While I did not support the bill, I fervently believe that government should take some action to help restore accountability and stabilize our financial market. Not doing so would potentially risk that our credit markets would dry up and middle class Americans would be unable to receive car or home loans and small businesses would not have access to the loans they need to operate. To address these issues, I advocated for a mandatory insurance plan where banks would be required to insure their toxic debt with the government, which would have Wall Street foot the bill for much of their own bailout and greatly reduce the risk to the taxpayer. I also strongly supported raising the FDIC insurance limits to $250,000 to better protect the middle class from bank runs. Additionally, I fought to eliminate
mark-to-market mortgage pricing regulations for banks. This allows homes to be priced based on their long term value and not on recently imposed fair market accounting regulations that have turned mortgages whose owners have never missed a payment into toxic debt because the home is no longer worth the buying price. Moreover, I believe we need to update and more stringently enforce our financial oversight laws to reflect a twenty-first century economy and ensure that crises like this one cannot happen again.
Following the House's failed vote, the Senate passed the same measure, but only after adding more than $110 billion in pork to draw in additional support. These riders are laden with the type of wasteful pork-barrel spending Americans have come to expect, and fear, from Washington, including $192 million for Puerto Rico
and Virgin Islands rum producers, $128 million for auto-racetracks and $148 million for wool producers. Rather than working to forge a compromise that myself and many of my colleagues could accept the Congressional leadership added billions of handouts to Members of Congress as a way to buy their support. I believe that is a betrayal of the citizens we represent. As a result, when the Senate proposal came before the House on October 3rd I voted against the bill. Unfortunately, the bill did pass by a vote of 263-171 and President Bush has signed it into law.
Well, he nailed that one. Both the dems voted FOR it, Boxer doesn't get them all right.