Orange County Register

Rep. Loretta Sanchez

Rep. Loretta Sanchez has decided to vote against the Wall Street bailout plan.

The Garden Grove Democrat just went down to the House floor and submitted her statement for the record without reading it. She basically says while the compromise plan is better than the Bush administration’s original one, it still doesn’t provide needed help for homeowners in danger of losing their home and doesn’t have strong enough guarantees that “the Wall Street executives that got us into this mess don’t walk away with millions of dollars.”

Here’s her full statement:

“I reluctantly rise today to express concerns about the current economic crisis and the proposed financial recovery package.

“For several years I have been concerned about the road our economy was heading down.

“In June 2005 at a Joint Economic Committee hearing I asked then Federal Reserve Chairman Allen Greenspan about the dangers of the housing bubble. And he responded that there was no “substantial” threat of a housing bubble and that even if home prices were to decline they were “not likely to have substantial macroeconomic implications.”

“Unfortunately, he was wrong.

“If the severity of the financial situation had been acted on back in 2005, or even one year ago, I think we would be in a better situation today.

“However, instead of proactively addressing this brewing financial crisis, as recently as April 2008 the goal of this Administration was to reduce regulation with the expectation that “market-discipline” will be the ultimate regulator.

“Well, we have learned that there is no “market-discipline” without regulation and without the threat that people and companies will have to pay for the mistakes they made.

“And so today we are considering a financial recovery package to save the financial industry from its mistakes, a package that is paid for with tax dollars earned by hardworking Americans.

“My constituents in Orange County, CA are asking me:
· where was the government to save my house from foreclosure last year?
· where was the government to save my neighborhood when half the houses on my block were foreclosed on?

“Unfortunately the government was not there to help my constituents and the millions of Americans that have lost their homes.

“Since the Bush Administration requested a 700 billion dollar blank check from Congress and the American people, our leadership in Congress has worked very hard to negotiate a more responsible package.

“The recovery package on the floor reflects a big improvement over the original Bush-Paulson plan.
I am pleased that this package includes safeguards to protect any taxpayer investment in saving the financial industry.

“These safeguards include:
· Warrants from financial institutions that receive assistance so the government can recover the taxpayer’s money once the financial industry recovers;
· an insurance program funded by the financial industry to guarantee troubled assets and protect taxpayers; and
· A plan to charge the financial industry fees to recoup the taxpayers’ investment if there are still losses after five years;

“However, this package does NOT do enough to help the average American keep their home, and to ensure that the Wall Street executives that got us in to this mess don’t walk away with millions of dollars.

“This bill does not guarantee that the government will be able to make the reasonable modifications to mortgages that many homeowners desperately need to avoid foreclosure.

“In purchasing mortgage backed securities the government will just be one of many co-owners of millions of mortgages. It will require the consent of all owners for the terms of the loans to be changed.

“Congress has already requested that all loan servicers nationwide act to avoid preventable foreclosures, so it is unclear that additional requests from the Treasury will have any additional impact.

“This legislation makes some common sense reforms of executive compensation, but I do not think it does enough.

“I am very concerned that this bill will still allow executives to receive million dollar a month salaries, and that there are multiple loopholes for corporations to escape the limitations on golden parachutes, incentives, bonuses, and corporate deductions for executive salaries.

“Despite the improvements that have been made since the original Treasury proposal, I can not in good conscience support a package that does not do enough to help endangered homeowners, and that does not tightly limit unreasonable compensation for executives.

You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.