President Bush’s Weekly Radio Address and Response by Democratic Rep. Rahm Emanuel


[*] BUSH: Good morning.

Our nation is dealing with a serious financial crisis. Over the past month, Americans have witnessed fast-moving events involving complicated financial issues. I know many of you are concerned about your finances. So this morning, I want to tell you how we’re addressing the uncertainty in our economy.

The federal government has responded to this crisis with systematic and aggressive measures to protect the financial security of the American people. These actions will take more time to have their full impact. But they are big enough and bold enough to work.

The primary focus of our efforts is addressing the underlying problem behind the freeze in our credit markets.

Earlier this month, Congress passed bipartisan legislation authorizing the Treasury Department to use up to $700 billion to help banks rebuild capital. This week, I announced that the Treasury will use a portion of that money to inject capital directly into banks by purchasing equity shares. This new capital will help banks continue making loans to businesses and consumers. In addition, the Treasury will use part of the $700 billion to purchase some of the troubled assets that are weighing down banks’ balance sheets and clogging the financial system. This extraordinary effort is designed with one overriding purpose: to help banks get loans flowing to American consumers and businesses, so they can create jobs and grow our economy.

I know many Americans have reservations about the government’s approach, especially about allowing the government to hold shares in private banks. As a strong believer in free markets, I would oppose such measures under ordinary circumstances. But these are no ordinary circumstances. Had the government not acted, the hole in our financial system would have grown larger, families and businesses would have had an even tougher time getting loans, and ultimately the government would have been forced to respond with even more drastic and costly measures later on. So I decided that government had to move, but that government’s involvement in individual banks had to have prudent limits.

The government’s involvement is limited in size. The government will only buy a small percentage of shares in banks that choose to participate, so that private investors retain majority ownership.

The government’s involvement is limited in scope. The government will not exercise control over any private firm, and federal officials will not have a seat around your local bank’s boardroom table. The shares owned by the government will have voting rights that can be used only to protect the taxpayer’s investment — not to direct the firm’s operations.

The government’s involvement is limited in duration. It includes provisions to encourage banks to buy their shares back from the government when the markets stabilize and they can raise money from private investors. This will ensure that banks have an incentive to find private capital to replace the taxpayer’s investment, and to do so quickly.

I know many of you are also concerned about the price tag of this rescue package. Ultimately, we believe the final cost will be significantly less than the initial investment. Many of the troubled assets that the government buys will increase in value as the market recovers. That means the government eventually will be able to resell them for a higher price. In addition, the government will receive quarterly dividends from the equity shares it purchases in financial institutions. If banks do not repurchase these shares within five years, the dividends they owe the government will increase substantially. This provides a clear incentive for banks to buy back their shares, thus returning the money to taxpayers, as soon as possible.

In the long run, the American people can have confidence that our economy will bounce back. America is the best place in the world to start and run a business, the most attractive destination for investors around the globe, and home to the most talented, enterprising and creative workers in the world. We’re a country where all people have the freedom to realize their potential and chase their dreams. This promise has defined our nation since its founding, this promise will guide us through the challenges we face today, and this promise will continue to define our nation for generations to come.

Thank you for listening.





[*] EMANUEL: Good morning. This is Congressman Rahm Emanuel of Illinois, chairman of the House Democratic Caucus. On weekends like this, maybe you’re like me and my neighbors, working around the house, trying to save a few bucks. My neighbors and yours are struggling in this economy. They’re working as hard as they know how, but the economic policies that George Bush proposed and John McCain supports have left them working harder, paying more and making less.

Democrats want to bring change to our economy. To reward small businesses that create jobs, and hold accountable big corporations that ship jobs overseas. That’s why we Democrats are working on a real recovery plan to turn this economy around and bring relief to families in need.

Maybe you’re working on paying the bills, and you’re seeing how health care and college costs have doubled and energy costs have tripled. You’re wondering just how you’re going to make ends meet this month.

Democrats know the middle class is struggling. That’s why Barack Obama and congressional Democrats want to target tax cuts to 95 percent of working Americans. We believe that the way to make even more Americans wealthy is to target our economic policies to the middle class — the families who drive this economy.

Republicans like President Bush and Senator McCain have a different view. They believe a few investors drive our economy. That’s why the Bush tax cuts showered billions on a select few. You know what happened next: the prosperity never trickled down. But the pain caused by rising costs and smaller paychecks certainly did. You know we need real change to help middle-class families and turn our economy around.

You’re still working hard and still putting your family first.

So maybe, like my wife Amy and me, your weekend is dominated by shuttling kids to their activities, from soccer games to swimming meets to dance recitals. I’ll bet you wince when you have to fill up the family car at the gas station — especially knowing that a lot of that money is going straight to countries that don’t like us very much.

That’s why we Democrats are fighting for real energy independence. Not more of President Bush’s big subsidies for Big Oil. They’re making billions in profit; they don’t need welfare from you.

And maybe your child sprained their ankle at the soccer game and you’re driving them to the doctor or even the emergency room. I’m lucky — on two accounts. My dad’s a pediatrician and as a congressman, you give me and my family the best health benefits around. But what about you? If guaranteed health care is good enough for politicians like me, President Bush and Senator McCain, it ought to be available and affordable to you and your kids. That’s why we Democrats are working to make quality health care you can afford a reality.

Maybe you’re a small business person like the small businessmen and women across the country that get up early, work all day, stay late and still worry about meeting payroll. And you know what? If they go under, no one’s going to bail them out.

That’s why we Democrats are fighting for a rescue plan for Main Street. Barack Obama’s plan cuts taxes for small businesses, helping them create the jobs it will take to rebuild our middle class.

And we Democrats will make sure any big banks or other corporations that get government help from President Bush cannot use your money to give themselves multi-million-dollar bonuses and spa treatments as a reward for running their company into the ground.

Maybe you’re looking at your retirement savings this weekend. You probably cringe when you look at your 401(k) statement that just arrived. You can’t just give yourself a golden parachute. That’s why we Democrats are working to make sure your tax money doesn’t go to golden parachutes for Wall Street executives who have failed their shareholders and their employees.

These changes — concrete changes that will help everyday Americans like you — that’s what Senator Obama and Democrats believe. And with your help and support, we can all come together to fix our broken and battered economy and give our kids a fresh shot at the American dream.

This is Congressman Rahm Emanuel of Illinois. Thank you for listening.


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