[Congressional Record Volume 155, Number 40 (Friday, March 6, 2009)]
[Senate]
[Pages S2871-S2872]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             CREDIT CRISIS

  Mr. BOND. On a much more somber note, Americans got more bad news 
today.
  For February, our Nation's unemployment rate is now a staggering 8.1 
percent. This is the highest unemployment rate in more than 20 years. 
More than 650,000 jobs were lost in February. These job cuts come on 
the heels of 655,000 jobs lost in January and another 681,000 jobs lost 
in December.
  This job loss means that what we are doing to solve the economic 
crisis is not working. This job loss is much more than a bad number for 
millions of Americans. These layoffs may mean missing a mortgage 
payment and facing foreclosure. These layoffs may mean not being able 
to take a sick child to the doctor. These job layoffs may mean not 
getting enough money to put food on the table.
  Right now, in every community across the Nation, workers are losing 
their jobs. These families are suffering as bills pile up and savings 
evaporate and businesses are struggling to meet payroll.
  After the new administration heralded the passage of their trillion-
dollar spending bill as the answer to this economic crisis, some 
Americans began hoping their economic futures may be turning around. 
Unfortunately, this crisis is one where we cannot spend our way out.
  Until we fix the real root of the crisis, our credit crisis, the 
hemorrhaging of jobs will not stop. I spoke about this earlier this 
week, and I will keep speaking about it until policymakers decide to 
act responsibly.
  The President, in his message in the State of the Union, said nothing 
is going to work until we fix the credit crisis. This latest jobs 
report is another sad reminder that right now our financial system is 
not working. Our financial system has become clogged with toxic assets, 
and until they are removed, fear and uncertainty will continue to 
dominate the markets and our economy.
  Our banking and financial system affects every American's standard of 
living, our ability to create and maintain jobs, and our ability to 
compete globally. It is central to all financial and household 
activities for Main Street America.
  Nothing the Government has done, to date, is working. Instead, the 
previous and the current administrations have been throwing billions in 
good taxpayer dollars into bad, failing banks. Why hasn't pouring more 
money into the system worked? Because policymakers are only treating 
the symptoms rather than the cause.
  The good news is, though, we do not have to go back to the drawing 
board. Under my American Credit Cleanup Plan, the Government can put to 
work the statutory authorities already in existence and long used by 
the FDIC, the Federal Deposit Insurance Corporation, for failed banks. 
This plan is to take advantage of the lessons we have learned. We saw 
what works in our Nation's experience during the savings and loan 
crisis. We also saw what won't work.

  During the 1990s, Japan lacked the will to clean up its sick banking 
system by taking out the toxic assets, and the end result was a ``lost 
decade'' during which Japan was stuck in a recession. I, for one, 
refuse to repeat Japan's mistakes, dooming the Nation's families and 
workers to a recession any longer and deeper than it takes to clean up 
the mess.
  The first step toward recovery is to identify troubled banks and then 
remove the banks' toxic assets in a transparent, market-friendly manner 
that is free from political interference and micromanagement. The toxic 
assets of the troubled banks would be removed through a temporary 
conservatorship. Under conservatorship, the first order of business 
there is to protect the banks' depositors up to the current FDIC 
guaranteed loan levels. It is essential that we continue to protect 
American families' investments.
  Also, many Americans are understandably angry as policymakers debate 
lowering pay caps for some executives who got us into this mess. Well, 
capping pay or taking away corporate jets isn't enough. Instead, we 
need to fire the failed executives and the boards of directors that 
took their businesses and their banks down the tubes.
  Next, the Government needs to separate the bad assets from the good 
and hold the bad assets until the market conditions improve when the 
value of these assets--a good part of the value of these assets--can be 
realized. Unlike the current ad hoc approach, my plan also provides an 
exit strategy. Once you get the bad assets out, you cleanse the toxic 
assets, then you have the restructured institution which won't continue 
to call on the taxpayer for more dollars to survive.
  I share the bailout fatigue all Americans are feeling, but we cannot 
afford to ignore the crisis. Failing to act could lead to families 
being unable to get loans to refinance homes, farmers unable to get 
credit to buy seed, students unable to get loans to go to school, and 
businesses unable to get credit to meet payrolls, keep workers, or 
expand. Our economic recovery depends directly on unlocking the credit 
system. It is time for policymakers to act.
  This action must be a bold, coherent, and smart approach like my 
American Credit Cleanup Plan. It has to tackle the root cause of the 
problem--the toxic assets--get them out of the system, and lead us out 
of this economic crisis and help Americans get back to work. I, for 
one, say no more throwing good taxpayer money down a rat hole, no more 
``adhocracy'' where we look at the crisis of the day and throw money at 
some institution that has already depreciated significantly in value in 
hopes of keeping it afloat. We need to take those institutions, cleanse 
the assets necessary, get new management,

[[Page S2872]]

 new executives, and put them back in the marketplace to function 
without Government interference.
  Mr. President, I thank the Chair. I yield the floor.

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