Oct 01 2008

Graham Supports the Senate Rescue Plan

WASHINGTON – U.S. Senator Lindsey Graham (R-South Carolina) today said he would vote in support of the rescue plan scheduled to come for a vote in the Senate today.


“We face an unpleasant but necessary choice,” said Graham.  “The crisis is real and is beginning to have a real, negative impact on Main Street America.  I am optimistic the Senate will act decisively.


“Over the past few days, I have heard from all corners of our state the dire consequences of congressional inaction,” said Graham.  “Businesses – both big and small -- are finding it increasingly difficult to obtain loans to meet operating expenses and fund expansions.  Some of the oldest businesses in America stand on the brink and people will lose their jobs.  Time is of the essence.  We must act.”


Graham noted the legislation has dramatically changed since it was first introduced.  Over time and as the economy improves, the taxpayer will recoup money and collected funds will be go toward debt retirement -- not shady groups like ACORN.


It now includes important safeguards such as an oversight board to review the governments acquisitions of troubled assets, limits on executive compensation packages and a prohibition on ‘golden parachutes’ for failed executives at troubled firms.  A ‘clawback’ provision -- which allows the government to recover any bonus or incentive compensation paid to a senior executive based on materially inaccurate information -- is also included.


The legislation increases from $100,000 to $250,000 in Federal Deposit Insurance Corporation (FDIC) insurance on bank accounts and the Securities and Exchange Commission (SEC) has issued a revision of ‘mark to market’ accounting practices.  These provisions taken together will increase consumer confidence, strengthen the legislation, and help bring additional Senators on board.


“The rescue package now contains strong protections for the taxpayers,” said Graham. “It was crafted to ensure that any purchases or loans by the government will be backed up by hard assets.  Taxpayers also will not subsidize multi-million dollar buyouts for CEO’s and other top managers who created this problem.


“My primary concern has always been that with the failure of lending institutions credit would dry up,” said Graham.  “When that happens, reasonable rate loans to consumers and businesses become scarce. It takes a toll as South Carolinians increasingly find it harder to get a loan for a new car, expand a business, or attend college on student loans.


“Unfortunately, we have many difficult days ahead as our economy tries to regain its footing,” said Graham.  “This package will not solve all of our economic problems.  But without it, the American taxpayer will face even greater exposure.


“I remain committed to making sure the root cause of the problem -- mortgages being given to people who never should have had them -- does not happen again,” said Graham.  “This is 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.”