Opposing view: The sky is not falling
By John Shadegg
Every Republican who voted against the Emergency Economic Stabilization Act on Monday believes that Congress must address this crisis. They take it seriously and stand ready to vote for reasonable legislation. They were unwilling to give Treasury Secretary Henry Paulson a blank check.
The sky is not falling. The market will return. Secretary Paulson is getting a lesson in civics. The world he has entered is different than the wheeling-and-dealing Goldman Sachs world where he made his fortune.
Members of Congress have a duty to protect the interests of the American people. That is precisely what they did. The vote against the measure was solidly bipartisan.
Paulson’s $700 billion dollar plan was fundamentally flawed. The bill asked for a blank check. It did not specify which assets could be purchased or the procedure by which they would be purchased.
Regrettably, Congressional Democrats inserted extraneous provisions and chose to put groups such as ACORN (a liberal housing advocacy group) and trial lawyers before the American people. After Sen. John McCain, R-Ariz., courageously halted the stampede, most negotiation time was spent removing harmful Democrat language, rather than improving Paulson’s proposal.
House Republicans want to protect the American people and our nation’s financial institutions, enabling them to make the loans needed to run America’s economy. It is also critical to calm public anxiety.
To begin, “mark to market,” the accounting rule that requires mortgage-backed securities to be valued at fire-sale prices, must be suspended. For reasons that are incomprehensible, Paulson and congressional Democrats refused to include such a provision. It’s a systemic reform Congress must insist upon to reduce taxpayer exposure and prevent this crisis from reoccurring. Further, an update to the Federal Deposit Insurance Corp., increasing its $100,000 limit, would relieve the concern of millions of Americans for their life savings. It’s hard to imagine why anyone would oppose such a change.
Many House conservatives do not like the structure of Paulson’s proposal to have the government purchase troubled assets. But there is nothing inherent in this plan that’s inconsistent with the two reforms outlined above.
Americans need to understand that the Senate was not scheduled to vote on this bill until Wednesday evening, as a result of the Jewish holiday of Rosh Hashanah today. We have ample time to reach an acceptable compromise if all parties act in good faith. The Democratic House majority can move to reconsider its bill if Speaker Nancy Pelosi will allow an amendment to improve it by making changes, including those I have outlined.
This problem can be solved in the very near future, and the market will come back.
Rep. John Shadegg, R-Arizona, first elected in 1994, has held a number of Republican leadership positions in the House.