October 3, 2008

Ms. Mary McPadden-Bigda
2317 Malaga Peak St.
Las Vegas, NV 89135-1345

Dear Mary:                           

Thank you for writing to express your support for the Emergency Economic Stabilization Act of 2008. I appreciate you taking the time to express your views on this important issue.

As you may know, financial markets in the United States and around the world face a dire emergency requiring urgent and decisive action and Nevada has been one of the hardest hit areas in the country. Treasury Secretary Henry Paulson recently requested the authority to purchase troubled assets from financial institutions so banks can resume lending and so the credit markets, now virtually frozen, can begin to operate more normally. After days of bicameral, bipartisan negotiations, leaders from both parties reached an agreement on the outline of legislation intended to stabilize the financial markets.

The Emergency Economic Stabilization Act contains provisions to stabilize the financial markets, increase transparency, protect the tax payers and provide for additional oversight and reform. This legislation provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions. Financial institutions having these troubled assets on their balance sheets means that working families, small businesses and other companies are having difficulty accessing credit.

The Emergency Economic Stabilization Act also contains homeowner protections and requires the Treasury to modify troubled loans to help American families stay in their homes. Southern Nevada has been particularly hard hit by foreclosures, this legislation will help struggling homeowners keep their homes. Taxpayers should not be expected to pay for Wall Street’s mistakes and this legislation contains a number of taxpayer protections. This legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may have.

Another key component of this legislation concerned executive compensation. Executives who made bad decisions and gambled foolishly with their shareholders money must not be allowed to dump their bad assets on the government and maintain their “golden parachutes”. In addition, the Emergency Economic Stabilization Act provides for strong oversight. This legislation requires the Treasury to report on the use of the funds and the progress made in addressing this financial crisis and also established an Oversight Board so that the Treasury cannot act in an arbitrary manner. The Emergency Economic Stabilization Act also establishes a special inspector general, modeled on legislation I recently introduced, to protect against waste and fraud. While my commission would have gone further in providing recommendations designed to guard against future collapses within our financial markets, I believes that this is a good step in preventing future challenges like we face today.

On Monday, September 29, 2008 the Emergency Economic Stabilization Act failed to pass the House of Representatives by a vote of 205 to 228. I joined 204 of my colleagues in voting in favor of this important legislation and I believe that this was one of the most important economic actions by the federal government since the 1930's. I worked with my colleagues to ensure that this legislation would not "bailout" failures on Wall Street but instead prevent millions of financial failures around the United States, and tens of thousands in Nevada. On Friday, October 3, 2008, the House of Representatives again addressed the Emergency Economic Stabilization Act. This important legislation passed the House by a vote of 263 to 171, please know that I joined 262 of my colleagues in voting in favor of this legislation.

The legislation voted on by the House on October 3rd added to the previous version by increasing the Federal Deposit Insurance Corporation deposit insurance limit from $100,000 to $250,000. This legislation also contained provisions extending tax breaks for producers of renewable energy as well as a patch for the Alternative Minimum Tax (AMT) that will prevent 22 million taxpayers from being subject to the AMT. Additionally; this bill includes an optional deduction for state sales tax for states without income taxes, an issue of particular concern to Nevada.

If Congress failed to act Americans would face difficulty getting loans to purchase homes, cars, and even finance a child’s education. Small businesses would be unable to secure credit to make payroll costs and retain and create jobs. I believe that this legislation, coupled with the recent clarification by the Securities and Exchange Commission and the Federal Accounting Standards Board on the use of fair value accounting will bring certainty and stability back into the market. Investors will gain confidence in the market and, consequently, liquidity will be restored. These are certainly trying times, and Nevadans are suffering. In Nevada we have experienced three bank failures since July, along with a housing crisis and high unemployment. I believe that these steps were necessary to help resolve the current credit crisis, and that the costs of not acting far outweighed the costs of acting.

I will continue to work tirelessly and pursue solutions to our current financial volatility and work tirelessly to ensure that Nevadans are allowed to stay in their homes. Again, thank you for writing.  Please feel free to contact me in the future with any additional comments or concerns you may have.

Sincerely,

Jon C. Porter
Member of Congress

JCP/pc

<< Back to list