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Dear Paul:

Thank you for contacting my office with your thoughts on Congress’ recent efforts to address the faltering credit markets.  As you may know, I voted and spoke out against the bailout package both times it came before the House of Representatives.  The first time around, a majority of my colleagues joined me to defeat the bill.  However, by adding pork, the Senate was able to persuade enough of my colleagues to switch their votes and pass the bailout.

Make no mistake: the last few months have seen wild fluctuations in the financial markets of the United States and the federal government has taken important and vitally necessary steps to contain the credit crisis.  Beginning in January 2008, the Federal Reserve (“the Fed”) slashed interest rates by an unprecedented 1.25% in little under a week.  In March, when Bear Stearns collapsed, the Fed took action to ensure its effect on the markets would be minimal and arranged its sale to JP Morgan.  Over the course of the summer, eleven banks failed, foreclosures skyrocketed, and the credit markets began to tighten.

While the seeds of the credit crisis were readily apparent, they did not truly take root until early September when the Department of Treasury announced it would be taking over Fannie Mae and Freddie Mac to prevent widespread market panic.  At the time, the two government sponsored entities (GSEs) were still solvent, but their portfolios were rapidly deteriorating and their potential failure was a real danger.

However, following the ensuing collapse of two investment banks, Lehman Brothers and Merrill Lynch, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke decided that the steps they were taking were not calming the market.  That is when they proposed to Congress a financial sector rescue package that would take the toxic assets off the balance sheets of banks.  By doing this, the financial sector could theoretically recover and the government could inject much needed liquidity into the markets.  The price tag for performing this public service?  $700 billion, and that’s on the back of the American taxpayer, not Wall Street.

Let me be clear: these are tough times.  Many Americans are watching as their investments decline in value, unemployment is rising, and, more than likely, the United States is in the grip of a recession.  However, a $700 billion government handout to Wall Street is anything but a solution.

Some will tell you that my opposition to the bailout is simply a poor understanding of economics on my part. I want to point your attention to a letter written by a large group of the finest economic minds in the country, including four Nobel Laureates.  This group of economists came out in public opposition to the bailout package and outlined their concerns in a letter to Congress.  I hope that you find their comments and analysis of the bill worth reading. http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm

When the $700 billion bailout package came before me on the House floor twice, I voted against it twice. The first time around, I called it business as usual in Washington and a majority of my colleagues agreed.  For some reason, the Senate opted to underscore my point by loading it up with $150 billion of pork.  As if $700 billion for Wall Street wasn’t enough, the Senate decided the government also needed to give a handout to those who manufacture wooden arrows designed for children, or to help out the rum producers in Puerto Rico.

One provision in particular caught me though: the American Samoa Development Credit.  Historically, this credit has benefited a corporation whose main product is tuna and has operations in American Samoa.  Figuring out who benefits from some of these provisions is a bit like playing Guess Who, but in this case, it’s easy: Speaker Nancy Pelosi.  Two years ago, ethical questions were raised when information came to light that the main beneficiary was based in Speaker Pelosi’s district.  Evidently, some politicians never learn. Unfortunately, this is just business as usual in Washington and lard plays a vital role in election year politics.  Thus, enough of my colleagues switched sides the second time around to pass the $850 billion bailout.

I return home to Florida every weekend, where I speak to my friends and neighbors about what is happening in their lives.  I hear stories about the everyday challenges facing Florida families, whether it is the declining value of a home, the hard time their daughter is having finding a good job, or how the high cost of gasoline is keeping them from taking a family vacation this year.  These hard working men and women have a difficult time seeing how a taxpayer funded bailout will lower their gas prices and help find them a job.  They look to Congress to find solutions, not make yet another problem.

As Congress moves forward and continues to address the current economic situation, I will continue to work with my colleagues on the Financial Services Committee to find bipartisan solutions that protect the American taxpayer and stabilize our economy.  Placing blame and pointing fingers will get us nowhere in this debate.  We need to set aside our Party labels and work toward commonsense solutions that meet the needs of American families and protect our shared interests.

Throughout my tenure in public service, I have always kept an open door and an open dialogue with my constituents.  As Congress addresses the many challenges facing our nation, I hope you will continue to share your thoughts and views with me.  Accordingly, I encourage you to visit my Web site at http://brown-waite.house.gov to email me and find useful information about our 5th Congressional District.

It is my honor and privilege to serve the people of Florida‘s 5th Congressional District and my offices and staff are here to provide you with any assistance you may need.

Ginny Brown-Waite
Member of Congress