News Releases

Wednesday, October 1, 2008

Isakson: Legislation Will Stabilize Credit Market, Restore Confidence
'Tonight Was Not a Night to Say No to the Future of the American People'

WASHINGTON - U.S. Senator Johnny Isakson, R-Ga., today praised the Senate's passage of legislation designed to stabilize the economy, free up credit and restore confidence in the U.S. financial markets.

"Tonight was not a night to say no to the future of the American people. Tonight was not a night to say we don't have a responsibility to help," Isakson said. "This is on the shoulders of the Congress. The people affected are our constituents who voted for us and sent us here. This legislation is critical to allowing us to unclog the financial markets, free up credit to the average American and over time restore the American economy to what it has been and always will be - the best entrepreneurial capitalistic system in the world."

The legislation authorizes the Treasury Secretary to immediately use up to $250 billion to purchase distressed assets from institutional investors. If needed, the secretary may then access an additional $100 billion to purchase these distressed assets but only with presidential approval.  

An additional $350 billion may be accessed if the president transmits a written report to Congress requesting the funds. The Treasury Secretary may use this additional authority unless Congress passes a joint resolution of disapproval within 15 days.  

The legislation includes a number of provisions to ensure oversight by Congress and accountability to the taxpayers, including prohibitions on executive compensation to ensure bad actors are not rewarded. Specifically, companies that receive more than $300 million from this plan will have limits placed on their top five executives. These limits include a ban from receiving a "golden parachute" as well as limits in the tax deductions they can take on compensation over $500,000.

The legislation also continues the suspension of "mark-to-market" accounting rules that are already in place today.

"This bill does precisely the one thing that we can do to help unlock the credit markets and help the average working Georgian, the average Georgia retiree, the average Georgia child who is looking to the future to benefit from what right now is a very difficult situation," Isakson said. "I encourage the House to act quickly on this legislation, because inaction on this plan will continue a downward spiral that will accelerate, will deepen and will touch every life of every American citizen and it will touch it and harm it for a long, long period of time."

The bill passed the Senate by a vote of 74 to 25. It is expected to be considered in the House later this week.

The bill does not allow bankruptcy judges to restructure the terms of existing mortgage loans. Additionally, it does not provide funds for affordable housing community organizers such as ACORN.