United States Senator Ken Salazar released the following statement regarding the Senate’s approval of the H.R. 1424, the Emergency Economic Stabilization Act of 2008. Salazar voted in favor of the measure, which passed by a vote of 74 to 25.
“We are in the midst of an extraordinarily serious financial crisis. Pensions and retirement savings are hanging in the balance. Small businesses are worrying that their credit will dry up and they won’t be able to make payroll. Young families are worrying they won’t be able to borrow money for their first home. Students fear that their bank won’t extend their college loans. Farmers and ranchers worry that interest rates will skyrocket, making it more difficult to buy seed, fuel, and fertilizer. Construction projects in Colorado are grinding to a halt.
“The American people are angry and frustrated that the economy has reached this point. I am angry and frustrated that it has reached this point. Middle class families are being asked to tackle a problem that is not of their own making. But I believe the risks of doing nothing are too great.
“To be sure, I believe this proposal is far from perfect, and I respect the positions of my colleagues in both chambers who have expressed principled opposition to this bill. Their voices are important to this debate.
“Despite the bill’s shortcomings, I believe it is firmly in our constituents’ best interests that we act now to protect Main Street from the failures of Wall Street; to ensure that small businesses, farms, and ranches can continue to access the credit they need to survive and ultimately thrive; and to secure the ability of families to save for retirement, find good jobs, and provide for their children’s future.”
Summary of the Emergency Economic Stabilization Act of 2008.
Troubled Asset Relief Program:
• Authorizes the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for families, small businesses, and other companies to access credit.
• Dispenses funds in installments: $250 billion immediately, another $100 billion contingent on Presidential certification. A final $350 billion would be available subject to a Congressional resolution of disapproval.
• Establishes an optional insurance program that would allow companies to insure their troubled assets rather than sell them to the government.
Protection for the taxpayer:
• Participating companies must provide warrants to the government for future purchases of equity so that taxpayers will benefit from any future growth these companies may experience as a result of participation the program.
Help for homeowners:
• Requires the Treasury Department and other federal agencies to work to modify the troubled loans they purchase or control to help American families keep their homes.
• Expands eligibility for the Home for Homeowners program, which offers FHA-backed refinancing for distressed homeowners.
Limits on executive compensation:
• Imposes limits on executive compensation for participating companies, including the elimination or limitation of certain tax benefits and, in some cases, caps on compensation.
• Limits or penalizes “golden parachutes” — exorbitant severance packages for departing executives.
• Establishes two independent oversight mechanisms: (1) a bipartisan oversight board and (2) a special Inspector General for the program.
• Requires the Treasury Secretary to report regularly on the use of funds and the progress made in addressing the crisis.