By Congressman Joe Pitts

One of the side effects of this financial crisis, and the government interaction it has required, has been an encouraging exercise in the workings of our American system of representative democracy.  As I have been provided with input from thousands of constituents over the past week, I feel as though I should provide my rationale for opposing the financial bailout plan that ended up passing Congress.

I voted against The Emergency Economic Stabilization Act because I felt it attempted to do the right thing the wrong way.  America is facing a credit crisis.  It needed to be addressed quickly and well.  Congress has acted quickly, but it has not acted well.

This crisis began in 1995 when the government began pressuring lenders to give mortgages to high-risk borrowers in order to increase homeownership in America.  This created a new market for lenders who soon rushed to make as much money as possible by inducing people who could only afford small houses to buy large ones instead.  In other words, this crisis began with the government botching an attempt to do something good.  It should not have ended that way as well.

This week, Congress had an opportunity to try again to do this correctly.  Instead, the Senate sent the House a bill full of tax breaks for special interests, unrelated provisions, and only minor improvements.  Instead of earning more votes by improving the bill, the Senate bill bought votes by adding “sweeteners.” 
The crisis we are facing is real.  However, in this country I believe market problems should be addressed with market-based solutions.  This bill is a big-government approach that increases the federal debt limit to $11.3 trillion, in order to create a quick fix.  It gives unprecedented power to the federal bureaucracy.  There are no reforms in this bill to correct the mistakes that caused this crisis.  It does not address the basic problem.  It does not adequately protect the taxpayer.

I and a great number of my colleagues advocated for a plan focused on market-based asset insurance, changes to the tax code, regulatory reform, and protections for homeowners and taxpayers.  Unfortunately, our ideas were never given an opportunity for a vote.
The bill does increase FDIC insurance limits, which should help.  The Securities and Exchange Commission is reportedly also planning to alter the much-discussed “mark-to-market” accounting rules.  That will also help.  The bill passed today will probably have the desired effect of encouraging markets and removing “toxic” assets that are “clogging” credit markets.  American workers and American businesses are the best in the world.  We will make it through this crisis, and we will return to prosperity.

I do want my constituents to know, however, that I and so many colleagues in Congress worked hard to offer an alternative.  We were not simply opposed to the plan, but instead actively working to propose alternatives.  Some of the actions we urged still need to be taken, including revising the government sponsored mortgage giants Fannie Mae and Freddie Mac that expanded the risky subprime mortgage industry with the implicit backing of the American taxpayer.  I will continue to advocate for these actions and reforms as we go forward.
 
Representing Pennsylvania’s 16th District in Congress is a tremendous honor.  It is also many times a tremendous challenge.  The economic problems we face today are complex and difficult.  Two thousand people reached out to me over the last week to let me know their thoughts on this issue.  While calls came in on both sides of the issue, the overwhelming majority of you opposed this legislation.  Regardless of the position, I was gratified to hear from so many people.  The principled arguments that were made encouraged me and reminded me of the fundamental wisdom of our system of government.  Democracy works.

I would encourage anyone who would like more information to visit my website, www.house.gov/pitts, where I have posted a memorandum with a fuller explanation of why I voted no and the alternatives I wished to see enacted instead.

Congressman Joe Pitts represents the 16^th Congressional District of Pennsylvania.

###