Senator DeMint on the Bailout
Mr. DeMINT. Mr. President, I have friends and colleagues whom I respect deeply who are on all sides of this bailout issue. One of them just spoke. We all to want do what is right for America, and I believe those who have crafted this plan had pure and noble motives. They want this country to succeed. They want prosperity. I just do not believe that this bill gets the job done. In fact, in the long term, I am convinced it will do more harm than good.
We are the Nation that has been called the bastion of freedom, and we are the Nation that has sacrificed blood and treasure to share that freedom with the world. We have fought communism, dictators, and tyranny. We have helped establish democracies and free-market economies across the globe. Because of America, millions of people are now electing their leaders, and millions have been taken out of poverty and enjoyed prosperity. Yet as the blood of our young men and women falls on foreign soil in the defense of freedom, our own Government appears to be leading our country into the pit of socialism.
We have seen this Government socialize our education system and make our schools among the worst in the world. We have seen this Government take over most of our health care system, making private insurance less and less affordable. We have seen this Government socialize our energy resources and bring our Nation to its knees by cutting the development of our own oil and natural gas supplies. And now we see this Congress yielding its constitutional obligations to a Federal bureaucracy, giving it the power to control virtually our entire financial system. Americans understand this and they are angry. They are our judge and our jury. They are watching what we are doing, and they will render their verdict based on our actions.
If we were honest with the American people and explained the failures that have led to this financial crisis, we might have the credibility to ask our citizens to allow us to borrow another $700 billion in their name to try to fix this problem. But we are not being honest. This problem was not created by our free enterprise system. It was created by us, the Congress and the Federal Government.
With good intentions, we made a mess of things. We wanted our economy to grow faster, so we allowed the Federal Reserve to create easy and cheap credit. But this allowed people to borrow and lend irresponsibly. We wanted to help the poor, so we forced banks to make loans to people who could not afford to pay them back. We wanted every American to own a home, so we created Fannie Mae and Freddie Mac to encourage and guarantee mortgages for more people who could not afford them. And all of these easy mortgages, many of which required no downpayment, inadvertently increased the prices of homes to unsustainable levels and created a massive oversupply of unsold homes. Now the value of homes has fallen, as has the value of the mortgages attached to them.
We allowed and even encouraged Fannie Mae and Freddie Mac to bundle up these risky subprime mortgages so they could be sold as securities to investors in America and all over the world. We guaranteed these institutions with the full faith and credit of the Government so their securities could be sold at above-market rates, allowing them to borrow huge amounts and fuel an explosion in subprime mortgage lending. We also allowed these mortgage giants to use their taxpayer-supported profits to spend over $200 million lobbying Congress to keep us quiet, even when we saw that our brainchild had become a financial Frankenstein.
All of our good intentions are now blowing up in our face, and we are asking the American people to bail us out. We must also plead guilty to other misguided policies that have made the situation even worse. Our foolish energy policies have created a huge financial burden on every American family and severely damaged our economy. By not opening our own energy supplies, we are now sending nearly $700 billion a year to other countries to buy oil. This has dried up capital at home and made us dependent on foreign countries for our credit.
We have also squandered and wasted hundreds of billions of hard-earned tax dollars on unnecessary and ineffective Federal programs and thousands of wasteful earmarks. Last week, we passed a bill with the highest rate of pork spending in history. While our talk of gloom and doom has heightened the financial panic here and around the world, and while we are asking Americans to bail us out, we are still spending money as if there is no tomorrow. Years of wasteful spending and bad policies have resulted in a huge national debt of nearly $10 trillion. Much of this debt is held by China and Saudi Arabia and other foreign countries that some now say are dictating our financial policies.
We know Americans are now the victim of our misguided good intentions, along with our free enterprise system that has been severely damaged and weakened. We know our bad policies have taken the accountability out of our markets by artificially insulating investors from normal risk. This has led to careless lending, careless investing, many bad decisions, and possible criminal activity on Wall Street. While many are blaming Americans and our free enterprise system for the crisis, we know the Government is the root cause of this crisis.
I believe this Congress should admit its guilt, prove we have learned from our mistakes, and correct the bad policies immediately that have caused these problems. We should insist the Federal Reserve end the easy money policy. We should repeal the laws that require our banks to make risky loans, and fix the accounting requirements that force banks to undervalue their assets. We should develop a plan to break up Fannie Mae and Freddie Mac and sell them to private investors who will run them as private companies.
We should reduce corporate and capital gains taxes to encourage capital formation and boost asset values. We should also repeal the section of Sarbanes-Oxley that has driven billions of dollars of capital overseas. And we should do even more to grow our economy and lessen our dependence on foreign countries. We should immediately pass a law that expedites the development of our oil and natural gas reserves to help relieve the burden of high prices and gas shortages for our families.
We should immediately adopt a freeze on nonsecurity discretionary spending and pass a moratorium on earmarks until we fix this wasteful and corrupting system. We should sacrifice our political pork as we ask taxpayers to sacrifice for our mistakes.
We have caused a terrible financial mess, and we must honestly tell the American people that whether we pass this huge bailout or not, there will likely be suffering and pain for our great country. But Americans and our free market economy are resilient. And with fewer misguided laws and less onerous regulations, we will get through this crisis, as Americans have many times before. But we must tell Americans the truth.
Congress says it was deregulation and capitalist greed that has run wild and undermined our financial system. Instead of reducing our role in the economy, we are trying to use this crisis to expand our power to control and manage the free enterprise system. We are here saying that our banks and mortgage companies have stopped lending money, that people can't get loans to buy cars, homes, or to run a business, and that our economy of the United States is on the verge of collapse.
We are telling people not to worry because we are going to rescue them with their own money. Congress is going to allow the Treasury Secretary to take $700 billion from taxpayers to buy bad loans and investments from anyone he chooses anywhere in the world. This, we say, will free up capital, get the credit markets working again, and put our economy back on track.
But this Congress refuses to change our Nation's monetary policy that created the cheap money and inflated the housing bubble. We refuse to change the accounting laws and regulations, even though they are making the problem worse. We refuse to lower capital gains and other taxes to attract capital and promote growth. We refuse to repeal Sarbanes-Oxley, even though it hasn't worked and it has cost our economy billions. And we refuse to expedite the development of America's energy resources, even though it would help every American and grow our economy.
None of these things are even on the table for discussion. We are telling the American people to hand over $700 billion or the world economy is going to collapse. This is why people are so upset. It is because Congress is being dishonest and arrogant. We are not being honest with them about how we got into this mess, and we are not being honest with them about what we need to get out of it.
I strongly oppose this legislation. It takes our country in the wrong direction. It forces innocent taxpayers to bail out Government policies and Wall Street mistakes. It asks the American people to take a leap of faith and trust people who have consistently misled them.
I am deeply saddened by the tone of this debate. I am afraid many of the supporters of this bill have bullied people into supporting it, using fear. There may be good reason for fear, but I think most people will agree that some of the statements have been reckless and irresponsible. I hope I am wrong and this bill will truly solve the problem.
Let me say again that I know every one of my colleagues is doing what they believe is right for America. But based on what I know, I cannot in good conscience support it. I know the Senate is going to pass it tonight, and I can only hope the House will defeat it so we can pursue better alternatives.
I thank the Chair, and I yield the floor.