Conference Call with Hank
National Federation of Independent Business (NFIB) members had an opportunity to participate in a conference call with Secretary of the Treasury Henry Paulson. Mr. Paulson was keen to solicit the support of NFIB members for the passage of the Emergency Economic Stabilization Act, (EESA).
NFIB members are small business owners who are generally very conservative, free market advocates who vigorously support tax relief, oppose regulatory oversight and large governmental spending programs. NFIB member firms are the entrepreneurs, shopkeepers, service providers and small business risk takers who populate the small stores and office space on Main Street USA.
Small business owners are a politically vocal and influential constituency whose support proponents need to gain passage of EESA. Last night EESA passed the Senate. It will now return to the House of Representatives for a vote. Secretary Paulson asked NFIB members to contact congressmen, senators and media to urge support of EESA passage.
Key points raised were as follows:
FDIC deposit insurance limit was raised to $250,000
EESA Bill included riders with tax cuts and other rebate incentives
EESA has a recoupment provision “put” that allows Treasury to sell assets back to banks at a previously agreed upon price
Failure of EESA will curtail community bank lending activity to small businesses
Large businesses and municipalities dependent on credit markets for short term funding will scale back purchases with small businesses
Current Treasury tools are not sufficient to deal with problem
EESA funding (Federal Budget program cuts) will need to be addressed in next budget cycle
Regulatory frameworks of financial services industry need to be streamlined, strengthened and reformed
Mark to Market of toxic bank assets will help to temporarily address bank solvency and capitalization ratios
Music Video: Blondie, Hangin on the Telephone
Risk: bank solvency, credit, interest rates, recession