Washington, D.C. — U.S. Rep. Bob Etheridge (D-Lillington) voted on Friday for legislation to protect homeowners, farmers, small businesses, retirement savings plans, and community bankers from the looming financial crisis.
The bill also includes tax relief for North Carolina’s middle-class families and an extension of tax cuts for small businesses. The House passed H.R. 1424, Emergency Economic Stabilization Act by a vote of 263-171. It has been signed into law by the President.
“The crisis on Wall Street is affecting workers and businesses on Main Street. We cannot wait for the situation to reach rock bottom before we take action. The economic rescue package will help to protect the life savings of seniors, small business owners and hard-working Americans from the financial crisis and it will cuts taxes for working families who have seen the cost of health care, gasoline and education sky rocket over the last six years,” said Etheridge.
“This bill is not the blank check the Bush Administration originally proposed. It eliminates golden parachutes and limits compensation for Wall Street executives, provides assistance for struggling homeowners and includes strong oversight and transparency to protect taxpayers’ money. This new plan ensures that taxpayers are repaid in full, and that Wall Street will make up any shortfall for the cost of this bill,” said Rep. Bob Etheridge.
The Emergency Economic Stabilization Act provides up to $700 billion for the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheet of financial institutions, limiting credit for working families, small businesses and farmers. Without this infusion, banks will be unable to loan money and Americans will be unable to grow their small businesses, access student loans or buy a home. It requires that taxpayers will be repaid in full with Wall Street responsible for any shortfalls, and that taxpayers will share in any profits recovered.
The Emergency Economic Stabilization Act will take steps to end the foreclosure crisis at the root of the financial situation. It provides authorization for loan guarantees and credit enhancement to prevent foreclosures, and requires a plan to encourage mortgage servicers to modify loans through the Federal Housing Administration’s Hope for Homeowners and other initiatives.
It limits compensation and golden parachutes for the CEOS and executives of financial institutions that receive this government assistance. It allows taxpayers to recover bonuses paid to executives who promise gains that later turn out to be false or inaccurate.
The bill includes $250 billion as an initial effort to stabilize the markets, and authorizes the remaining $450 billion only after Presidential notification and Congressional oversight of the Treasury Department’s actions. Also, the bill creates an oversight board with authority over the U.S. Treasury Secretary’s actions, mandates reports to Congress at regular intervals, establishes an independent Inspector General, and gives the Treasury Department the option to guarantee companies’ troubled assets with insurance that is paid for through risk-based premiums paid by the financial industry.
Also included in the legislation is tax relief for middle-class families, and extension of tax cuts for small businesses and incentives for creating renewable energy. This bill gives 33,083 North Carolinians in the Second Congressional District a tax cut instead of having to pay the Alternative Minimum Tax. It helps families by expanding the child tax credit to those earning $8,500 a year in 2009, extends the state and local sales tax deduction, and will help over 4 million families better afford college by providing a tuition deduction. The bill also includes a tax deduction for more than 3 million teachers when they pay for classroom supplies and expenses. It includes an additional $400 million for Quality Zone Academy Bonds to help states and localities address school construction and renovation needs.
This bill extends the Research and Development Tax Credit for two years to spur American innovation and business investment as well as a two year extension of the 15-year straight-line cost recovery for leasehold improvements and qualified restaurant improvements.
Developing alternative energy sources and reducing our dependence on foreign oil is one the most critical challenges facing our country. This legislation will increase the production of renewable fuels and renewable electricity, and encourage greater energy efficiency. With Americans struggling to afford rising gas prices, it includes tax incentives for the installation of E-85 pumps for flex-fuel vehicles, and up to a $7,500 tax credit toward the purchase of fuel-efficient, plug-in hybrid vehicles.