Tim Holden's Replay to Darnell

Dear Mr. Williams:

Thank you for contacting me in regard to the Emergency Economic Stabilization Act of 2008, also known as the $700 Billion Bailout Plan. I voted against this legislation both times it was presented to the United States House of Representatives. At the end of the day however, the bill was passed by Congress and the President did sign it into law.

I believe the financial crisis we now face is due in large part to the incompetence, arrogance, and overall greed of Wall Street CEOs. We should not be rewarding their bad behavior. This bill did not address the root of the problems facing our financial institutions. With no fix of the underlying regulatory failures and the next Administration only required to send "reports" to Congress, Wall Street will already have received its bailout and would have no incentive to support any new reforms down the road.

When originally reviewing this bill, my priority was to ensure that homeowners, workers, and small businesses on Main Street were protected from the complex financial problems caused by the corporate greed on Wall Street. This bill’s protections for the taxpayers are weak. The oversight board put in place has very little power over the Secretary of the Treasury, and provisions to limit CEO compensation did not go far enough.

As this crisis developed, I looked long and hard and tried to seek out the best guidance I could. I joined my Democratic and Republican colleagues and sought advice from the financial industry, including former Federal Deposit Insurance Corporation (FDIC) Chairman Bill Isaac, who served under President Reagan during the Savings & Loan crisis. Chairman Isaac, didn’t think this bill would help the struggling economy and suggested alternatives. He suggested changes to the governing rules of the Securities and Exchange Commission (SEC) suspending the mark-to-marketing accounting rule. He stressed that many banks are still in good shape, and financial markets can be bought in order quickly, shifting focus to where it should be, fixing the housing crisis and stimulating job creation. He also suggested the FDIC declare a state of emergency, issue "net worth certificates," and insure the bank’s general creditors against losses (not just depositors).

For the above reasons, I felt compelled to vote against this flawed legislation. Thank you again for contacting me on this issue. If I may be of assistance in the future on any federal matter, please do not hesitate to contact me.

Sincerely,

Tim Holden
Member of Congress