WASHINGTON – Congressman Vernon J. Ehlers made the following statement today after the House of Representatives failed to pass the Emergency Economic Stabilization Act of 2008 (H.R. 3997).

“Today, the House of Representatives failed to pass important legislation to protect American families and businesses from a potential collapse of our financial system. I voted in favor of this legislation since our nation is facing a major financial crisis, and we must act.

“This bill represents the first step, and Congress needs to look at other approaches to rescue our economy. I want to be very clear that this bill did not “bail out” Wall Street; it would have helped taxpayers, families and individuals in West Michigan who could be severely harmed by a breakdown in the financial system. We urgently need to restore solvency to our country’s financial system. 

“The consequences of inaction could rival the Great Depression of the 1930s: Credit cards not working, employers going out of business because they are unable to borrow money, and employees not receiving paychecks. I also fear that inaction will lead to suffering at smaller community banks. Congress must work in a bipartisan manner in renewed efforts to find a solution. Partisanship has no place in this debate; the stakes are far too high.

“The problem we face today stems primarily from home mortgages, which lost value during the decline in the housing market. These mortgage-backed assets allow banks to lend money to businesses and consumers. The bill considered today would have authorized the federal government to acquire those troubled assets, to allow financial institutions to resume lending, and avoid a widespread breakdown in America’s financial system.

“I thought this bill was a good start. I worked with fellow House Republicans to include several measures to protect taxpayers from the risks associated with the government purchasing troubled assets from financial institutions. The bill we voted on today would have established a guarantee program to insure the costs of purchasing these assets against potential losses. It also created oversight panels to be sure federal money was being spent in the most responsible manner possible, and it would have prevented financial executives from walking away from the disaster they helped create with large, unearned bonuses.  

“I understand many people in West Michigan are very concerned with this situation, especially considering our state’s struggling economy. Today’s vote was the first step in the process of restoring our financial system and protecting American families and businesses, and I will continue working with my colleagues on both sides of the aisle to create a solution.”