[Congressional Record Volume 154, Number 154 (Friday, September 26, 2008)]
[Senate]
[Pages S9613-S9614]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       LOOKING AFTER MAIN STREET

  Mr. ISAKSON. I have listened to so many speeches today--really 
yesterday, this week--about our problems and our plight in this country 
economically. I have listened to a lot of blame and, quite frankly, 
there is a lot of blame to go around, including on the shoulders of 
every one of us here.
  But I think the American people are interested not in the past but in 
the future. As our leaders have appointed designees to negotiate what 
hopefully will be a successful package, I think it is now time to start 
talking about what can be rather than what was. And what can be is a 
return to prosperity and confidence in the United States of America.
  I think there are four component parts that must be a part of this 
package I believe our leadership is working on. First and foremost, 
they need to understand we have to worry about Main Street and not Wall 
Street.
  In my State, Main Street is Slappey Boulevard in Albany; it is 
Abercorn Highway in Savannah; it is Whitlock Avenue in my hometown of 
Marietta; and it is Peachtree Street in downtown Atlanta. The people 
who live on those streets, who have life savings and 401(K)s and IRAs, 
have concerns. Let's talk about the prospects for the future. The 
prospects for the future right now are quite grim without an 
arrangement, without an agreement in this Congress to deal with the 
current financial stress that is taking place in our financial 
institutions.
  We are going to have some protracted, difficult times. But if we rise 
to the occasion, if we, in fact, do what things we need to do in the 
next 48 hours, we can change the future for the better. It is our 
responsibility, and it is our job.
  First of all, in looking after those Main Streets in our home States 
and our hometowns, what we need to do is return confidence. We need to 
return confidence by, first of all, having our financial institutions 
strengthened. What Secretary Paulson proposed, what is now being 
currently debated in terms of a $700 billion authorization to purchase 
assets that are troubled from financial institutions is an important 
part of that solution.
  It is also, and little has been said about this, an opportunity for 
the United States of America to stabilize the financial markets and 
over time to recover not only the cost of stabilizing them but actually 
get a return. For example, if the Treasury is authorized to purchase 
mortgage-backed securities that today are on the books at marked-down 
market value to zero, at 50 cents on the dollar, hold those to 
maturity. If those default rates on those mortgages hold, which today 
are somewhere between 9 and 12 percent, the margin could be as high as 
25 to 38 percent in terms of held to maturity. In fact, as the market 
returns, those securities could, in fact, be sold by the Treasury at a 
margin above the 50 cents on the dollar that was paid for them.
  It is an opportunity that can work and, finally, an opportunity that 
will make our financial markets much stronger. Will it bail out Wall 
Street? No. Wall Street has taken its hits. Lehman Brothers is broke. 
AIG is liquidated. The remaining investment bankers on Wall Street have 
asked to come under FDIC regulation. And Bear Stearns lost 90 percent 
of its value. Wall Street has taken a hit, and a significant one.
  We do not want Main Street to take it. This proposal has the 
opportunity to solidify the balance sheets of the local savings and 
loan and of the local bank that your customers and your citizens on 
Main Street deal with every day, which right now are under stress.
  The second thing we need to do is to ensure the American people 
understand we have the oversight over the Treasury during the 
disposition of these funds so that we know the funds are being handled 
in an accountable way. Our leaders are negotiating right now precisely 
that type of oversight, so the Congress knows, not on a quarterly basis 
but on a daily basis, what the Treasury is doing and how the program is 
working.
  Third, it has to include and address the fact that a lot of CEOs in a 
lot of troubled companies have run away with large packages of money. 
That has been very offensive to the American people and, quite frankly, 
very offensive to me, the most recent of which took place last night 
with Washington Mutual.
  It is appropriate if financial institutions come to the Treasury of 
the United States and the taxpayers of our country and ask for 
assistance in the purchase of these securities in order to stabilize 
their balance sheets, that there be accountability in terms of 
executive compensation to those taxpayers who are funding that bill.
  Then, fourth, we need to start talking about the greatness of this 
country and the confidence we have that we can return. Our difficulties 
now are somewhat of a crisis of confidence in our country and in its 
financial system. As elected officials Republicans and Democrats alike, 
in these next 48 hours, it is critical for us to understand that 
nothing is more important in the financial markets than the confidence 
of the consumer. The American consumer is the person who resides on 
Main Street and is the person I was elected to represent and will.
  We need to recognize also there is a second phase to this recovery. 
After we finally do get the financial markets stabilized--I think the 
proposal by the Secretary has the opportunity to do that--we need to 
understand three things have to happen. First, this country has to get 
its arms around our energy crisis and solve it.
  I have enjoyed working with the Presiding Officer on programs such as 
that. When we return in January, our first priority must be to open all 
of our resources, lessen our dependence, and become independent from 
foreign imported oil and independent with our own sources of energy. 
Whether it is biodiesel, whether it is diesel, nuclear, whether it is 
coal-to-liquid, whether it is solar--it ought to be all of them. We are 
a great country with enough natural resources to be independent in 
terms of our energy. Second, we have to get a handle on our debt, and 
this package that is being negotiated has the opportunity to do that 
because a part of it should ensure that the proceeds we receive in 
return for the assets we buy at a discount in the beginning go not to 
the general fund but go to pay the debt of the United States of 
America.
  In time, this exercise can in fact reduce our debt obligations rather 
than increase them. But we need to ensure that is part of the package. 
Then, finally, it is very important for us to understand it is not just 
our income in balancing your balance sheets, it is our out-go. We have 
been spending too much money as a Congress of the United States of 
America.
  One of the more disappointing things I have experienced in the Senate 
has been our failure on many years to not do appropriations bills in an 
orderly fashion. We end up doing them as a combination, as a minibus or 
omnibus where instead of debating the finer points of a particular 
appropriation, we develop a gigantic piece of legislation that none of 
us knows every facet of when it comes to spending.
  So as we look after Main Street today by finding a solution to bring 
stability to our financial markets, and we can do it, and do it in an 
accountable way, let's also recognize that when we return, as our 
markets solidify, let's do the things the people of America elected us 
to do: hold the Treasury accountable, find a solution to our energy 
dependence, make sure

[[Page S9614]]

we do not spend too much money, and restore to the American people the 
confidence in our budgetary process that they have in their own around 
the kitchen table.
  We are a great country because we have always risen to the occasion. 
There may have never before been, domestically, a more difficult 
financial occasion than the one we face today. In the hours ahead, I 
hope we will rise and come to a conclusion that will benefit the 
taxpayers on Wall Street and will ensure the financial stability and 
the confidence of American consumers in this great economy and our 
great country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.

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