Sestak Rejects Pat Toomey’s shortsighted call for an end to TARP

By SESTAK FOR SENATE

Media, PA – Today, Democratic U.S. Senate Candidate Joe Sestak released the following statement in response to Pat Toomey’s call for an end to our economic recovery efforts, including TARP.

“Pat Toomey’s attacks against economic recovery efforts remind me of Adlai Stevenson’s famous quote of Richard Nixon- he was the kind of politician who would cut down a tree, then mount the stump to make a speech on conservation.

“It’s ironic that now– after eight years of President Bush, Arlen Specter, and Pat Toomey’s harmful policies– Pat has decided to criticize our efforts to rebuild our economy and stave off a more severe economic crisis. Instead of criticism now, Pat and Arlen should have demonstrated leadership over the past decades to prevent the harmful policies that caused the current economic crisis-and the need for TARP and the Economic Stimulus bill. They created the mess that Democrats are now cleaning up. In fact, instead of leadership they:

Deregulated the Financial Industry, forbidding any requirement for reporting derivative transactions or keeping sufficient cash reserves on hand so that when financial crises like the one we experienced occur, institutions are able to avoid collapse – and therefore harm working Americans (S. 900, Vote #105, 5/6/99);
Eliminated “pay-as-you-go” (PAYGO) rules, which created 3 budget surpluses under President Clinton by requiring Congress to offset the cost of any new spending programs; and (H.R. 5708, Vote #482, 11/14/2002)
Instead, Pat and Arlen voted for Bush’s tax cuts for the wealthy– of which more than 50% went to the top one percent– and added $1.7 trillion to the deficit. In fact, between 2001 and 2009, under Pat’s, Arlen’s and President Bush’s economic and tax policies-without a “pay-as-you-go” requirement-the national debt more than doubled form $4.5 trillion to over $9 trillion.
“It is disingenuous to speak of debt when Pat and Arlen were both involved in the Bush policies that added $1.7 trillion to the national deficit and more than doubled the national debt. The bill I voted for last fall-the Economic Stabilization Act-was a rescue package to correct the damage done by their support for President Bush’s harmful policies and ensure that even more Pennsylvanians did not face the unavailability of affordable car, education, small business and other consumer loans. In fact, the first day I voted for that bill, LIBOR– the overnight lending rate that banks charge to each other– shot up six and a half percent when usually it is below 0.2%. No bank was lending to one another, and the Federal Reserve was forced to take urgent action so that the banks could open the next morning.

“Not acting up to that point had already gravely harmed our economy and risked creating a deep, protracted recession. Failure to take quick and significant efforts to address the economic situation would have meant GDP would not have returned to its previous 2007 peak by the beginning of 2011, but rather in 2014; three million additional Americans would have lost their jobs in the first half of 2009; and the unemployment rate would be over 12% percent (11% marks an economic downturn as a depression). This would be much more severe than the early 1980s recession, which until now has been the worst downturn since the Depression.

“Anyone can criticize, but it’s important that we remember that Pat and Arlen were the captains of the ship that drove our economy aground. As a result, Pennsylvania has suffered long enough from Toomey and Specter’s “hands-off” approach to oversight and accountability. Considering his record, it should concern us all that Toomey has called for a rushed end to the TARP Program. This is another example of shortsightedness that caters to the whims of the moment rather than the security of Pennsylvania’s families. As the independent Special Inspectors General for TARP recently acknowledge “there is little question that the dramatic steps taken by Treasury, the Fed, and FDIC… played a significant role in bringing the system back from the brink of collapse,” but added that the commercial real estate market threatens to increase pressure on banks and small businesses as economists have recently noted.

“It is easy for Pat to stand on the sidelines and criticize those of us involved in cleaning up his and Arlen’s mess. However, that is not the type of leadership Pennsylvanians need or want,” said Joe Sestak.

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