U.S. REP. Charlie Wilson (D-18th) was in Bridgeport Wednesday, explaining his stance on the latest proposal to loan hundreds of billions of dollars to financial institutions, saying the loans are necessary to keep small businesses open and to keep lines of credit available for consumers.
Wilson met with the press and the public during a question and answer session at Rhodes Florist, where he was joined by the owner of the business, Bill Talik, who said he relies on short term loans to purchase supplies to get his business open.
"It's a standard small business practice to have a credit line established during certain parts of the year. When business dictates, you have to put out a lot of money for supplies to carry you through the holidays," Talik said. "If you don't have a credit line, you're going to have to find other sources to get that supply and a lot of times it's going to cause you to spend more money and thus raise prices on the customer. To keep it simple we need a credit line for small businesses."
According to Wilson, if the financial package isn't approved, it will be more difficult for people to get loans to buy a home or for students to get loans to go to college, while also having a negative effect on jobs.
"We are trying to move in every direction we can to help supply credit, so that there is not a freeze," Wilson said. "It is not just about Wall Street, it's about Main Street."
But the new plan differs significantly from a bill that was narrowly defeated in the U.S. House on Friday, Wilson said.
That bill would have lent $700 billion to financial institutions. The new plan would lend up to half that amount with an initial $250 billion loan to be injected into the financial system, and an additional $100 billion, if needed.
He then said any additional loans beyond that $350 billion would have to be approved by new legislation.
There would also be a big change to the maximum amount a deposit will be insured for by the Federal Deposit Insurance Corp. Currently, the FDIC insures up to $100,000 in an account. The new maximum would be $250,000.
"There are arguments for and against it. It's a very controversial vote, but I feel like it's the right vote and the right thing to do," Wilson said. "So we need to move forward and see that the consequence of doing nothing is just not an option. We are going to guarantee peoples' pensions. We are going to guarantee people can get a line of credit to make sure people can get student loans, home loans and a loan to buy a car."
The bill also would give the government the option of purchasing preferred stock and would prevent executives from receiving "golden parachutes, and would also increase oversight of the industry, Wilson said.
"We are trying to be as careful and diligent with taxpayers money as possible," Wilson said.
But Wilson also said the loan package hasn't been an easy sell to the public.
The congressman said between 80 to 90 percent of those who have contacted his office have voiced their opposition to the loan, but said many of those same people have changed their opinion since then.
"Now, it's about 50-50," Wilson said. "I think the more that people learn about it, the more they will see it's the right thing to do."
But at least one women who attended the event questioned the proposal, saying there was a promise of more jobs North American Free Trade Agreement that never materialized.
Wilson said that he also disagrees with NAFTA or any other free trade agreement, but also said that failing to approve the loan could send the nation into a recession.
Wilson said he will be back in Washington today, when the House of Representatives is expected to debate the issue.
Schuler can be reached at shoe@timesleaderonline.com.
