U.S. Senator Bob Corker, during a town hall meeting Wednesday in Smithville, provided details of the $700 billion dollar "rescue plan" and the reasons why he voted for it.
Corker, a member of the Senate Banking, Housing, and Urban Affairs Committee, says constituents who contacted his office prior to the vote were overwhelmingly opposed to the plan, but he says action by the Congress was needed to prevent the financial crisis from getting worse and resulting in damage to the broader U.S. economy.
The senator says Wall Street, regulatory agencies and policymakers in Washington failed America and too many Americans borrowed money for houses they simply couldn't afford. "There's no doubt that the federal government has encouraged home ownership and there's no doubt that, in some cases, homeownership was not the right thing. But I think to say that this is the essence of the problem would be a little bit of a stretch but no doubt it exacerbate the problem and made it worse. We have a lot of policies, for instance the Community Reinvestment Act, where banks are basically are asked to go out into places that have typically been difficult for loans to be put in place and encouraged to make that happen. Some of that is good so we've got to balance it. What happens whenever we have a crisis, sometimes we try to react with a ready, fire, aim mentality. I think what we'll do in January is come back with cooler heads. Certainly the policies that took place with Freddie and Fannie. Those were absolutely abusive and excessive and need to end. Those we need to solve. There are some other policies that encourage home ownership that are actually good so what we need to do is to leave the good ones in place and then take out these excessive cases of bad behavior that were certainly very prevalent in Freddie Mac and Fannie Mae."
Corker says regardless of how we got here, the troubled financial system must be stabilized. He says this is not a "bail-out of Wall Street," but an unprecedented effort to avert a catastrophe that would devastate Main Street.
He says the plan will restore stability and confidence to the credit markets, and enable the financial system to continue financing the needs of American businesses, consumers, homeowners and students.
Corker says this plan provides accountability and oversight, and limits exorbitant executive pay. It will actually strengthen the banking system in Tennessee by allowing the FDIC to insure deposits up to $250,000 for one year, a significant increase from the current $100,000.
Through this rescue plan, Corker says we will purchase assets that will hopefully produce gains, and 100 percent of any income made will go toward paying down the debt. He says if our resources are invested properly, the federal government will get all of its money back and taxpayers may even see a return on the investment.
Senator Corker says the reckless way Wall Street has taken risks and made choices that have pushed our credit markets to a breaking point is reflective of the way Washington has run up the federal deficit and refused to control spending. "I am hopeful that passage of this plan will be the beginning of a strong focus on cleaning up the mess in Washington and on Wall Street."