I am livid about this vote.  Here is the statement from John Culberson.

Dear John:

My preferred solution to the credit crisis was to repeal the mark-to- market accounting rule and raise the $100,000 FDIC insured limit on bank deposits to $250,000. Unfortunately, this bailout bill also included $42 billion in tax increases and pork barrel spending, and I could not support it. I am committed to finding a solution that restores liquidity to the banking system, and these two steps will help immensely, giving Congress and the Administration time to think the problem through carefully. While I am glad the SEC Chairman Chris Cox repealed the mark to market rule, and that the bailout bill raised the FDIC insured limit to $250,000, I co-sponsored the conservative alternative, H.R. 7223. To read about the Free Market Protection Act, click here.

The White House and the Treasury both tell us that nothing in this bill will prevent this crisis from happening again, or bring those responsible to justice and that $700 billion may not even be enough. The bill grants the Treasury Secretary unprecedented authority - he can bail out any financial institution operating in the United States by paying any price he wants for any financial instrument, for any reason, and no one can stop him or restrain him in any way as long he makes a phone call or writes a letter to Congress telling us what he has done.

Since we will have to borrow the $700 billion by selling TBills on the international bond market, and the largest percentage of TBills are bought by the Chinese or other hostile powers through Middle Eastern sovereign wealth funds, under this bill, American taxpayers will borrow billions of dollars from Chinese and Middle Eastern banks to bail out Chinese and Middle Eastern banks.

This bill also raised the national debt to $11.3 trillion, doubled the deficit overnight, and saddled our children with at least $1 trillion in new unfunded obligations. All for a bill the Treasury Secretary admits won’t prevent the problem in the future and may not solve the urgent problem in front of us.

Federal property managers will be able to rewrite mortgages to reduce principal and lower interest rates to zero if they wish, and they can give away foreclosed or distressed-loan homes in your neighborhood to anyone they wish. Liberals who manage these programs will give away millions of free or reduced homes in neighborhoods all over America to families who could not otherwise afford them. The federal government now has the power to create federal housing projects, house by house, in neighborhoods all over America. Just imagine what that means for property values and the safety and security of your neighborhood.

I was one of only seven House members to vote against loosening lending restrictions on FHA home loans in 2007, I opposed the taxpayer bailout of Fannie Mae and Freddie Mac earlier this year, and I strongly supported the unsuccessful Fannie/Freddie reform bill of 2005, which would have helped avert this crisis.

We need Congressional action to help forestall and ease the credit crisis, but this bill won’t solve that problem, won’t prevent future problems, and was rushed through far too fast for us to be thoughtful and deliberative.

Here are several recent news articles that help explain the history of the current credit crisis:

http://www.independent.co.uk/opinion/commentators/dominic-lawson/dominic-lawson-democrat-fingerprints-are-all-over-the-financial-crisis-949653.html

http://online.wsj.com/article/SB122212948811465427.html

Sincerely,

John Culberson
Member of Congress

Since Treasury Secretary Paulson and Federal Reserve Chairman Bernanke testified before Congress on the depth of the financial crisis facing our economy, in the midst of our recovery from Hurricane Ike, I have heard from thousands of District Seven constituents expressing their shock and outrage over the government’s failure to prevent this crisis and their failure to respond with a sensible solution that instills confidence in the markets and protects taxpayers from long-term liabilities. Since I have represented you in Congress, I have consistently voted against loosening lending standards and supported reforms to prevent the systemic failures of Fannie Mae and Freddie Mac (link to votes below).

To be clear, I understand that Congress must do something to restore liquidity and ease credit, but yesterday’s bill was focused more on protecting Wall Street institutions than protecting taxpayers. Handing over unlimited power to the Treasury Secretary to purchase toxic assets with our tax dollars under a new system that will take weeks or months to set up and raising the debt limit to more than $11 trillion (or 78% of GDP) is not the solution; instead we should focus on preventing a run on banks by raising the FDIC limit to $250,000 for deposit insurance in checking and money market accounts.

As former Federal Reserve Governor and National Economic Council Director Larry Lindsey said, “Nearly 40% of the assets in the banking system are not protected by FDIC insurance because they are in accounts that exceed the $100,000 insurance limit. Most of these are not ‘investments’ in the usual sense of the word. They are often the transaction accounts of businesses that have to meet payrolls and pay vendors. If you have to make a biweekly payroll for 50 people, it is sheer folly to expect the paychecks to be drawn on accounts in three or four separate banks. Sometimes individuals who would normally keep a balance well under $100,000 might be over the limit to make a down payment on a house, purchase a car, or pay quarterly taxes.”

Suspending the “mark to market” accounting rules approved under Sarbanes-Oxley would improve corporate balance sheets overnight and inject much-needed capital back into the markets, and it can be done with a stroke of the pen by SEC Chairman Cox. Eliminating or suspending capital gains taxes, slashing corporate income taxes, and cutting taxes on offshore profits repatriated back into the U.S. would also provide short-term cash infusion and encourage investment.

I am committed to working with my colleagues in Congress to resolve this crisis as quickly as possible, but I cannot ignore my obligation to taxpayers just to say that Congress did something. We have an opportunity to come back in session on Thursday and consider a new bill, hopefully much-improved over Monday’s version, and send a strong message that we care enough to solve this crisis the right way.

Sincerely,

John Culberson
Member of Congress

Me: I plead ignorance on “mark-to-market” policy, though I haven’t heard much good about it. The rest of this makes sense to me.

Don’t you love how Congress gets these odd holidays that normal citizens don’t have? Return to session on Thursday? Rosh Hashona for two days? I didn’t see that as a federal holiday. Anyway it is good to see that they can take a two day break from this complete financial meltdown/Armageddon to celebrate Rosh Hashona. Ramadan is right around the corner…

Anyone who doesn’t want to bankrupt the USA is ok in my book.

Congressman John Culberson released the following statement today voicing his strong opposition to the Paulson-Pelosi $700 billion Wall Street bailout:

“The $700 billion Paulson-Pelosi bailout forces Americans to choose between bankrupting our children or big Wall Street banks. The revised plan was just released a few hours ago, and while it contains some oversight, eliminates golden parachutes for bad actors, and creates an investment banking insurance program for the future, the bottom line requires me to oppose it.”

“This bailout will saddle our children and grandchildren with at least $700 billion in new debt on top of the existing $9.8 trillion national debt. It will double the budget deficit overnight, and it will lead to additional bailouts as the multi-trillion dollar credit default pyramid scheme collapses.”

“I fought to help Congressman Richard Baker enact essential reforms of Fannie Mae and Freddie Mac, which would have prevented this crisis today. I was one of only seven congressmen to vote against loosening FHA loan requirements and I have opposed efforts from liberals like Congressman Barney Frank to push Fannie and Freddie to encourage banks to make loans for politically correct reasons rather than sound financial reasons.”

“I will not vote to bankrupt future generations to protect Wall Street investment banks from their own mistakes. The best solution to this crisis is to suspend mark-to-market accounting rules, establish a mandatory insurance/guarantee program to cover the banks’ losses at no expense to taxpayers, cut the capital gains rate to zero, cut taxes for offshore dollars repatriated back into the U. S., and cut corporate tax rates dramatically to encourage investment and lending. Changing the mark to market accounting rule alone will allow banks to keep non-performing assets on their books until they recover their value, and solve a huge part of the problem.”

“My principal, long term goal in Congress is to balance the budget and protect the treasury from bankruptcy - which is why I have opposed so many spending requests as a member of the Appropriations Committee and voted ‘no’ so often against big spending programs like the Farm Bills, the Medicare Prescription Drug Program, fighting AIDS in Africa, and so many others pushed by this Administration.”

My inner libertarian takes a backseat to my outer scientist. If anyone is willing to propose a model of funding research that doesn’t require the federal government that is feasible, I’m all ears. Until then, I can justify my egregious begging thus: I am currently working on a computer that was built in 1998, for crying out loud. We’re almost to the point where we’re recycling ethanol at the lab! This is money better spent on research rather than bank bailouts. The first paragraph is mine, the rest is for members of the Society for Neuroscience.

Mr Culberson,

I know that after years of irresponsible spending at the federal level, it is tempting to tighten the belt on things like the NIH budget. Please consider that the NIH budget has remained flat for the last 6 years. As a republican, I remember the initiative taken by the GOP in 1998 under Newt Gingrich to double NIH funding. This spending is not a “bridge to nowhere” such as the one in Alaska, as it provides tangible benefits and a profitable ROI for our nation and the world. Also, and perhaps more germane, it benefits the Baylor College of Medicine where I and many of my colleagues are employed. The medical center is the largest source of employment for the city of Houston, a fact you should consider when reading this letter and voting on NIH funding.

As a constituent and a member of the Society for Neuroscience, I urge you to sign a letter being circulated by Representatives Edward Markey (D-MA), David Reichert (R-WA), and others, to Appropriations Chair David Obey (D-WI) and Ranking Member Jerry Lewis (R-CA) that requests an increase for the NIH of $1.9 billion or 6.5 percent in FY2009. NIH is the world’s leading medical research enterprise, and without strong Congressional support it will not be able to sustain the pace of recent discoveries that are saving lives, improving health and promoting economic development in your district and across the nation.

With over 38,000 members, SfN is the world’s largest organization of basic scientists and physicians who study the brain and nervous system. Neuroscience includes the study of brain development, sensation and perception, learning and memory, movement, sleep, stress, aging, and neurological and psychiatric disorders. It also includes study of the molecules, cells, and genes responsible for nervous system functioning.

I urge you to help ensure that NIH has sufficient funding to help solve the many public health challenges in our nation by signing this letter. To sign on, please contact Josh Lumbley in Rep. Markey’s office at <joshua.lumbley@mail.house.gov> or (202) 225-2836, or Jason Edgar in Rep. Reichert’s office <jason.edgar@mail.house.gov> or (202) 225-7761.

Thank you in advance for your support.