November 21, 2008
Over the past month, the House Committee on Financial Services has held several hearings regarding the economic crisis facing our country. We have explored a number of issues, including the Troubled Asset Relief Program (TARP), the need to provide more relief for homeowners and efforts to create a rescue package for the nation's automakers. We've heard from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, as well as executives from the auto industry.
We all have many questions about the economic rescue package and how the tools given to Treasury are being used. There are many of us who want to see much more being done to help homeowners grappling with foreclosure. Currently, none of the $700 billion included in the economic rescue package has been directed toward helping struggling homeowners stay in their homes. Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair has been pushing for some of these funds to target homeowners, but this has not yet been embraced by Treasury Secretary Paulson or the Bush Administration. I strongly support Bair's approach. With the economy worsening, unemployment rising and more people struggling to pay their bills, we need additional housing action.
On Wednesday, the Committee held a hearing to learn more about what the auto industry believes they need in order to stabilize their finances. Like many of my colleagues, I am very concerned about the loss of jobs if the auto industry fails. I am inclined to support some efforts to help the automakers weather this deepening economic crisis. However, I have a great deal of concern over how to best accomplish that. If you are interested, I have posted my comments from Wednesday's hearing on my website.
There are currently two approaches being considered. The first would use $25 billion from the $700 billion rescue package to assist the industry. The second would take that $25 billion from a previously passed energy bill funding that is supposed to be used to help the industry develop more fuel efficient vehicles and greener technologies. I am opposed to this approach because the auto industry's marked reluctance to embrace initiatives like fuel efficiency is part of the reason it finds itself in its current predicament.
The House and Senate adjourned yesterday after calling on the automakers to submit a detailed plan for the money they are requesting. We want to know how they propose to spend the money and to restructure their operations in order to remain viable. No one wants to simply hand over what is essentially a blank check. The auto industry has until December 2nd to submit a plan. Congress is considering reconvening during the week of December 8th to review the plan they submit.
Before adjourning, the Senate approved a previously passed House bill extending unemployment benefits by seven weeks and by thirteen weeks in states with high unemployment.
I will report back in December on the status of automakers' request.
Congressman Mike Capuano