Congressional inaction in the face of an impending credit crisis is not an option. Without action to shore up the banking system, financial markets may very well freeze up, stalling the already ailing overall economy.

The current financial crisis is the result of excessive risk-taking, a failure to regulate huge financial markets, and lack of accountability in corporations and government. Unfortunately, we are now in a position of having to act to lower the risk of a global market meltdown. For without action to spur job creation and support working people, the labor market will freeze and fundamental economic weaknesses will worsen.

The administration’s initial proposal to shore up the markets was offensive; it essentially asked for a $700 billion blank check for the Treasury Secretary with no oversight, no review, and no transparency. Congress hammered out a better version that includes taxpayer protections, transparency requirements, and government oversight, as well as provisions that will begin to provide assistance to homeowners.
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The process to craft and enact emergency financial legislation is far from over. A majority of representatives sent the message on Monday that if a bill is not right, we need to work on it until we get it right.

We must have a compromise that limits the expense, fixes the actual problems, restores accountability to the system, all the while protecting taxpayers from shouldering the burden of a bailout.
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Assuming it passes, the bailout would transfer many mortgage-backed securities to the federal government in some form, and many foreclosures would give the federal government ownership pending disposition. The “fear” is that because entities of the federal government are usually immune from state taxation, state and local officials might be worried about their revenue stream.

So what might the outcome be? Well, it’s “uncertain.”

State and local governments in 2008 will rely on an estimated $397 billion in property tax collections. As of August 2008, 1.2 million homes were in foreclosure, out of 45 million mortgages outstanding. If even a fraction of the assets underlying the estimated $12 trillion in mortgage loans falls into government title, and are immunized from state and local taxes, a revenue problem could arise for local governments. Read the rest of this entry »

Six more months have been wasted in getting to the truth behind the firings of the U.S. Attorneys. It should come as no surprise to anyone that the Inspector General and the Office of Professional Responsibility were not able to come to any firm conclusions given their lack of subpoena authority. After the top law enforcement officials in the nation lied with apparent impunity during congressional hearings, how could anyone reasonably expect that these officials would see the light, speak freely, and tell the truth now? Citizens for Responsibility and Ethics in Washington (CREW) first called for the appointment of a special prosecutor to investigate the firings back in March of 2007; it is gratifying to see that 18 months later, the Justice Department finally has recognized the matter merits criminal investigation. Why the delay? The only feasible explanation: to ensure the Bush administration is long over before anyone could ever be held responsible for one of the most shameful episodes in the administration’s history.

With the delay in passing the Emergency Economic Stabilization Act of 2008, Congressional leaders now have the opportunity to further refine their proposal to gain the public’s confidence that taxpayers’ interests will be protected.

The current proposal provides opportunity for oversight and accountability, but there is still an enormous amount of executive discretion in this bill, particularly as it relates to valuing the troubled assets the public will take over. Furthermore, window-dressing provisions, such as the five-year recoupment plan, give the illusion that this package will not have massive budgetary implications. But the political reality is that a future Congress is unlikely to tax the financial services industry. Read the rest of this entry »

On Monday, the House sent to the President my legislation to ban the export of toxic mercury.  I was pleased to work with Senators Barack Obama (D-IL) and Lisa Murkowski (R-AK) to introduce and pass, the Mercury Market Minimization Act (S. 906/H.R. 1534).

This bill will eliminate a key source of mercury from reaching the global market.  Mercury is a potent neurotoxin hazardous to human health, especially for infants, young children, and women who are pregnant or nursing.  As much as one-third of the mercury air pollution entering the U.S. comes through atmospheric transport from Asia, where extensive artesinal mining using mercury releases it into the environment.  Much of the fish Americans eat, including tuna, comes from waters off the coast of Asia and from South America where such artesinal mining is widespread.
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Yesterday, the House declined to go forward with the $700 billion financial services bailout put together by House and Senate leaders working with the Administration. The vote was 205 in favor and 228 opposed.

This is not the end of the bailout idea. Though it appears to be widely unpopular among the American people, many leaders believe that it is necessary to avert a more serious financial crisis. Expect House and Senate leaders to come back with a revised proposal later this week, later this month, or sometime after the election, when the risk of voter retaliation is lower. Read the rest of this entry »

Washington continues to put partisanship and petty politics ahead of the American people. In 2006, Democrats promised the American people they would end business as usual. Instead they’ve continually failed the American people and have allowed a brewing financial crisis on Wall Street to threaten Main Street.

Any action by Congress must address important principles: it must protect taxpayers and not leave them responsible for bailing out Wall Street; it must comprehensively reform government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac; whose failures are at the root of the financial crisis; and repeal the affordable housing fund which siphons off capital to fund liberal third party organizations.
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I’m concerned about us rushing to a judgment. I don’t think we’ve done enough deliberation on this. There are other things we must do. We must protect Main Street — I think we should actually be much like what a parent should do when they have a child that does something wrong. We can’t just rush to the rescue every time. We have to say, “You know what, we’re here for support. I know that you’ll find ways to work it out,” and little by little we’ll find where our niche should be, but I’m just a little concerned this bill was a rush to judgment and failed to adequately protect the American taxpayer.

Access to quality child care is critical to working families. It provides a stable environment in which children can grow and develop, and it provides much-needed support and peace of mind for working parents. In these tough economic times, the costs of child care can place a strain on household budgets that are already burdened by the rising costs of fuel and other basic necessities. In my home state of Arkansas, a growing number of families are currently in desperate need of child care assistance. Unfortunately, federal assistance for child care has not kept pace with inflation, resulting in a decrease in the number of children served through the Child Care and Development Block Grant (CCDBG). Currently, these grants are only able to assist one out of every seven eligible children.
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