Mrs. FEINSTEIN. Mr. President, they say Senators have 6-year terms so they can take tough votes when tough votes are called for, so that they can vote for the best interests of their country even sometimes when their constituents do not understand it or may be opposed to it.
I have received 91,000 phone calls and e-mails from California, 85,000 of them opposed to this measure. There is a great deal of confusion out there. People don't understand. What was printed most prominently was the original Paulson proposal, a proposal which gave one man control over $700 billion to dispense as he chose, above the law, with no administrative view or legislative oversight.
This is not that proposal. I thank the chairman of the Banking Committee, both sides of the Banking Committee. It would be one thing if we had a choice, but I do not believe we have a choice. Let me give you an example.
In my State, we have 3.5 million small businesses. We have over 20 million people employed in those small businesses.
Now, some businesses function on cash. Most function on credit. When credit is frozen, they cannot make payroll. And when they cannot make a payroll, they give out pink slips. So you will see, through electrical and plumbing contractors, retail establishments, even grocery stores, computer stores, automobile sales, we are now hearing from people who say they want to buy a home, they cannot get a mortgage; they want to get a car, they cannot get a loan. This is what is beginning to happen.
This is not a give-away. This essentially is a strategic plan to buy assets, both good and bad, to pump liquidity into the market, to be able to free up credit, so that once again the economy can function. The Government will hold these assets. Over time we believe they will make money, and the Government will be the first paid back.
So I think if we do care about the livelihood of our constituents, there is only one vote and it is yes.
This bill is not the bill that was put forward by Secretary Paulson on September 20. His bill was essentially a nonstarter--startling in its unbridled allocation of power to one man: the Secretary of Treasury whom we know now, and to a Secretary of Treasury after January whom we do not know.
It placed this man above the law, above administrative oversight and above congressional action, and essentially gave him $700 billion to do with what he thought best.
This bill didn't fly with virtually anyone who looked at it, particularly constituents, who have called in the tens of thousands of phone calls all across this land.
My office has received over 91,000 calls and e-mails with over 86,000 opposed. The bill before us is not Paulson's 3-page proposal. Rather, it is a bipartisan effort that adds oversight, accountability, assistance to homeowners, executive compensation limits, and other measures to protect taxpayers.
But there still is a lot of misinformation on this bill.
This is not a $700 billion gift for Wall Street.
Rather, the--Federal Government will buy equity in certain assets, both good and bad to pump liquidity into the marketplace and unfreeze credit which is increasingly freezing and unavailable.
Over time, these assets will be sold and the Federal Government will be the first paid back on the investment. The belief is that by doing this the Federal Government will clear much of the bad debt on the books of certain strategic financial institutions, restoring stability, adding liquidity, and unfreezing credit.
Recently, we have seen major U.S. institutions fail: Bear Stearns, Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch, and AIG. And, two retail banks, not investment banks: Washington Mutual and Wachovia. If we do nothing, more institutions will fail.
Now, you may say: What does this mean to me? I work hard, I pay my bills, I pay cash.
Here's what it will mean to you: It will be harder for most Americans to get any credit. Therefore, jobs will be lost.
And we may well face a deep recession.
California has 3.75 million small businesses with an average of 5.6 employees. That adds up to over 20 million jobs.
Some of these businesses are funded with cash, but most are funded with credit. When credit freezes, payrolls cannot be met. And when payrolls cannot be met, pink slips are sent out.
And this will happen to retailers, grocery stores, restaurants, electrical and plumbing contractors, apparel manufacturers, computer and electronics stores, and auto dealerships.
Sales at auto dealerships have fallen dramatically in the past year. Ford sales are down 34 percent, Chrysler sales are down 33 percent, Toyota sales are down 29 percent, and GM sales are down 16 percent.
The list will go on and on.
Importantly, there have now been several improvements to this bill. First, The FDIC insurance rate covering bank deposits has been increased from $100,000 to $250,000. Americans will know that their deposits are secure up to $250,000.
The legislation will provide tax relief to working families.
One example: the Alternative Minimum Tax is a real problem. It was meant to apply only to 200 wealthy people, but it was never adjusted for inflation and it has crept down the income scale to the point where more than 25 million taxpayers today may well have to pay an Alternative Minimum Tax.
In California, 700,000 people paid this tax last year. But 4 million Californians will pay that tax this year unless we take action.
This bill takes that action. For 1 year it will prevent this tax increase.
The Congressional Budget Office has reviewed this bill and concluded that the net cost to taxpayers is ``likely to be substantially less than $700 billion.'' Again, these investments are first in line to be paid back.
It must be remembered that there was a great deal of criticism when the U.S. Government bailed out Mexico in 1996 with $20 billion. The fact is, the money was paid back ahead of time and $600 million in profit was made.
Let me give you the following points. This bill mandates that the Government provide loan modifications for the subprime mortgages it acquires. This will help keep families in homes rather than foreclosing and putting the house on a deteriorating housing market where property values drop and homes are looted. The bill limits executive compensation. It provides strong oversight and accountability, including a financial stability oversight board, a [Page: S10249] five-member congressional oversight panel, an inspector general, and a constant presence at Treasury by the Government Accountability Office.
This is the only choice Congress can make.
One can rail against it and vote ``no'' on it, but that is not going to solve the problem. We have one chance, and one chance only, to solve the problem, and it is this bill.
I wish I could write it differently. Others wish they could write it differently, but the fact is that we are faced with this. Again, there is no question this is a tough vote.
But there is no question that this is a vote that I believe has to be made.