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Dear Friends:
Like you, and Americans from across the country, I am angry about the current financial meltdown that has hurt our nation. The ripple effect of this crisis has spread far beyond the housing market where it started and now threatens all of us, including small businesses that have been the economic engine driving our economy.
While we are all affected, the impact on small businesses is particularly serious because over the last 15 years small businesses have been responsible for creating 93 percent of all new jobs and employing about half of the American workforce, totaling 58.6 million people.
I recently held a conference call with small business owners from across Maryland to hear firsthand about how they are being affected by the economic downturn. During that call, we discussed the $700 billion economic recovery package that recently was enacted into law. It is not the bill that I would have written, but -- as almost all of us can attest -- our economy is in dire straits. We needed to act quickly to restore confidence in our economy and restore the free-flowing of credit. Inaction simply was not an option.
Last week, Secretary of the Treasury Henry Paulson announced the first step of the recovery package -- $250 billion that will be used to purchase equity in U.S.-based banks in order to free up credit. Half of these funds are targeted for small- and medium-sized financial institutions. This temporary investment is intended to give our nation's banks the confidence and the capital they need to make the loans and issue the credit that is needed to restore the smooth running of commerce. It is still not clear whether this strategy will work.
In the meantime, Federal Reserve Chairman Ben Bernanke has said that he supports an additional economic recovery package to help Americans who are struggling because of the downturn in the economy. Congress is working on a package that could include help for those facing foreclosure, additional unemployment benefits, assistance to those with high heating bills, and investment in infrastructure improvements to create jobs.
Congress will return to Washington the week of November 17 to complete its legislative session. I hope we will use that opportunity to step up support for Americans who live on Main Street and who are now in serious financial trouble through no fault of their own.
Best wishes.
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