New Hampshire Senators Solidly Behind Rescue Bill
Bailout
The New Hampshire Union Leader
Jenny Paul
Boston University Washington News Service
Oct. 2, 2008
WASHINGTON – Republican New Hampshire Sens. Judd Gregg and John Sununu rallied behind a revised economic bailout plan that passed the Senate with bipartisan support last night, saying the legislation would help free up the credit markets and aid New Hampshire residents who need access to consumer, auto and school loans.
“Credit is drying up,” Gregg said. “The credit crunch is on top of us in a way that is affecting everyday America on Main Street.”
After the House defeated the $700 billion rescue plan Monday, Gregg and other congressional leaders worked to revise the legislation in hopes of picking up the votes needed for passage in both chambers. The modified package adds tax break provisions and raises the cap on federal deposit insurance. The bill includes renewable energy tax incentives, extends expiring tax breaks for businesses, including the research and development credit, and adjusts the Alternative Minimum Tax so that more than 20 million Americans avoid paying it.
Gregg said he didn’t mind including the extra provisions in the bailout bill.
“I don’t have any problem with passing tax cuts onto Americans,” Gregg said. “It’s not right to tax these people under the AMT because it was not designed to tax all these middle-income people.”
The core of the bailout plan remains similar to the version defeated in the House. The plan authorizes the treasury secretary to purchase up to $700 billion in troubled mortgage-backed securities in an effort to free up the credit markets and allow banks to lend against valued assets.
An addition to the plan raises the federal deposit insurance from $100,000 to $250,000 for a one-year period in an effort to protect small-business owners and individuals who keep more than $100,000 in one bank deposit account.
“That’s constructive, but it doesn’t go to the essence of the problem,” Gregg said of the insurance increase. “It does help people be comfortable keeping their money in one bank.”
Sununu praised the increase, saying it would add a level of security and confidence for small business in New Hampshire.
“This bill is far from perfect, but it is necessary, and necessary now to protect all Americans,” Sununu said.
He said he voted for the overall package because it was essential to protect the credit on which families and businesses in New Hampshire rely.
“We’ve read stories over the last two days about restrictions on the lines of credit for business, restrictions on lending for new cars and for new car loans,” Sununu said. “And all of those things restrict our economy and prevent people from having the money they need for their family, but also for having the money they need to invest and create new jobs.”
Gregg said the rescue plan protects taxpayers by limiting executive compensation and requiring the government to use all proceeds to pay down the national debt. Gregg said it is absolutely “inaccurate” to say the plan will cost taxpayers $700 billion because the government is purchasing assets that have value and will later resell them.
“We may actually make some money,” he said. There’s certainly not going to be any dramatic cost.”
Gregg and other congressional leaders said public opinion began to change this week when the stock market plummeted Monday, credit tightened and consumers found it increasingly difficult to secure loans.
Gregg said he didn’t want to speculate about what would happen if the House did not pass the bill.
“I hope that calmer heads will prevail,” Gregg said. “People were damaged financially as a result of that vote in the House on Monday.”
Gregg continued to stress that the plan was only part of a solution to the financial credit, but said passage of the plan was necessary to start to free up the credit market.
“We’re not going to get out of the woods here,” he said. “We’re still going to have a bad economy. There’s no question about that. But the difference between a bad economy and what a cataclysmic event this would be is exponential.”
