My good friend Mike has inspired me to use my blog to share this with all of you. 

My Response to Senator Cornyn’s Letter Below

Senator Cornyn,

Thank you for letting me know your position on this bill.  You have included many reasons why you voted for this bill, but not one of your considerations includes its constitutionality.  My understanding is that you have taken an oath to support the Constitution of the United States. I fail to see the constitutionality of this blatantly socialist bill.  It seems to support Karl Marx’s Communist Manifesto more than the US Constitution.  Again, I do appreciate your honesty and explanation of your position on this bill. So in return, I want to do the same by letting you know that I will now be voting for Yvonne Schick in November.  Thank you!

Regards,
Lon Allen

Letter From Senator Cornyn

Dear Lon,

Tonight, the United States Senate will vote on The Emergency Economic Stabilization Act of 2008. The bill is designed to immediately address the web of complex and broken financial relationships that are choking the economic system, and avoid a systemic financial collapse that would devastate the economy and have severe consequences for all Americans.

My office has fielded thousands of calls on this subject this week. I appreciate so many taking the time and effort to share their thoughts with me on such an important subject. I know many of you are extremely upset about the idea of the government doing any type of bail out for Wall Street, and I completely agree with you. I also regret that the Administration mishandled early communications on this plan, seeming to focus on a bailout of finance industry firms instead of concentrating on the need to protect the interests of Main Street. It is difficult to consider approving any proposal after this uneven performance.

If we do nothing, however, the potential consequences are dire. My concern is not with the Wall Street financier who gambled and lost. It’s with the 60-year-old worker nearing retirement and seeing his savings disappear, and the small business owner who cannot make payroll because his credit line has been frozen, and the untold numbers of employees who could find themselves unemployed.

None of these people should pay for the greed and irresponsibility of a few unethical or greedy individuals. Wall Street needs to be held accountable. I was among those who sought an investigation of the housing finance system two years ago, without success. I renewed that call this week, along with a demand for a criminal investigation of Fannie Mae and Freddie Mac. If there was illegal conduct, it should be pursued.

Before I go to vote, I wanted make certain you know that the bill before us is far different from the three-page “take it or leave it” version that the Treasury Secretary handed us ten days ago. It has been improved from the original proposal.

The proposed legislation contains substantially more oversight. Instead of a blank check, with unlimited discretion for the Treasury Secretary, the bill sets up a comprehensive system of review aimed at preventing further abuses. It sets up procedures for the government – and taxpayers – to recoup a good portion or even all of the expended funds, through warrants and other instruments. If the plan is approved and works as expected, it is now highly likely that the impact will be considerably less than the original price tag.

The bill also deletes most of the more egregious special interest provisions, such as the proposal for profit sharing with left-wing advocacy groups such as ACORN.

It also includes multiple taxpayer protections. It prohibits unjust enrichment by barring a participating institution from selling an asset to the Treasury for more than was paid for it. It also includes strict restrictions on executive pay for affected companies, making the golden parachute for executives of distressed firms a thing of the past. It also requires profits from the transactions be used to pay down our national debt, and not to fund pet projects or to expand the size of the federal government.

The bill also brings some much needed transparency to our government by requiring the Treasury Department to publicly disclose the details of all of their program transactions in monthly reports. Treasury would also be required to issue supplemental reports when it makes a $50 billion commitment to purchase troubled assets. These reports must detail each of the agreements made, any insurance contracts and the nature of the assets purchased and projected costs and liabilities.

As an added benefit for Texas, the bill now includes badly-needed funding for areas hit by Hurricane Ike, plus extension of the tax deductability of sales taxes, and renewable energy credits that represent sound public policy.

Tonight’s vote is not the end of the process, but the beginning. Congress needs to continue to work together on bipartisan reforms to make certain this inexcusable meltdown never occurs again. There is serious debate over who is to blame for this – and there are many candidates, in New York, Washington and elsewhere — but there should be no argument about responsibility if reforms aren’t enacted forthwith. Congress has an obligation to put partisan politics aside and work together in the best interest of the American people.

Sincerely,

John Cornyn
United State Senator