Sep 19 2008

Graham Statement on Financial System

WASHINGTON – U.S. Senator Lindsey Graham (R-South Carolina) today made this statement after hearing from President Bush and Treasury Secretary Hank Paulson on the state of the United States financial system. 

He said:

“We must get to the heart of the problem and that is the effect bad mortgage loans are having on our economy.  If not addressed, this problem will have an increasingly negative impact on the ability of average Americans to borrow money to buy a home, build a business, or go to college.  If we do not use sound judgment, I fear many American’s who have worked hard all their lives and invested in their future, will be placed at additional financial risk. 

“This current financial crisis started with the subprime mortgage sector where individuals were allowed to borrow funds and buy homes they could not afford.  It was a house of cards that has led to severe consequences for other sectors of the financial markets.  The practice has since come back to haunt our nation. 

“Getting bad debt out our financial system may be the only way to recapitalize our nation and prevent an institutional collapse that would jeopardize the financial future of all Americans.  I know the price to fix this problem is enormous.  However, at the end of the day, it may be less than the price of doing nothing and risking a complete financial meltdown. 

“I look forward to studying the proposal Secretary Paulson will submit to Congress in the coming days and asking tough questions to ensure taxpayers are protected to the maximum extent possible. 

“I believe it is in our national interest for Congress to act sooner rather than later.  This is not the time for partisan politics or the blame game.  We must get this right.

“Looking forward, Secretary Paulson’s proposal will be the first step -- not the last -- in cleaning up this financial mess.  We must also put stronger regulations and oversight in place to bring transparency to the markets.  I fear our failure to act in these areas will only lay the groundwork for similar disasters in the future.”