H.R. 1406 – Stock Market Recovery Act of 2009

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HouseIntro Referral Latest Action

Referred to the House Committee on Financial Services.

Financial Services Committee

March 10, 2009

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HouseIntro Referral

Introduced in House

March 10, 2009

HouseIntro Referral

Sponsor introductory remarks on measure. (CR H3112, E613-614)

March 10, 2009

HouseIntro Referral

Referred to the House Committee on Financial Services.

Financial Services Committee

March 10, 2009

Floor Debate

1 member

What members said about H.R. 1406 on the floor

1 Republican

Rep. Mark KirkR-IL-10 · Mar 10, 2009

Madam Speaker, the stock market's loss over the last six weeks suggests that the policies of this Congress are magnifying the depths of this recession, not aiding its recovery. Let's look at recent…

Madam Speaker, the stock market's loss over the last six weeks suggests that the policies of this Congress are magnifying the depths of this recession, not aiding its recovery. Let's look at recent events:

1. Stocks are now traded in a bear market that declined 20 percent since the President's inauguration. This decline is faster than any other President since the First World War. The decline is steeper than Presidents Hoover or Roosevelt experienced. In fact, by this point in the Roosevelt administration, the market showed gains.

2. The market decline accelerated as the Congress and President promulgated their policies:

a. From the year's-end to the inauguration, the market fell 5 percent.

b. From inauguration to Secretary Geithner's speech, the market rose 2.5 percent in anticipation of good economic policies.

c. From Secretary Geithner's speech to the budget release, the market fell 12 percent.

d. From the budget release to March 6, the market fell another 11.2 percent.

As details of congressional legislation and the Administration's plans were published, the market accelerated its fall. A number of ``recession-proof'' industries lost value after the President released his budget. Oil prices rose nearly 4 percent, but the value of American energy companies fell by the following amounts up to 20 percent.

In other words, Americans are paying higher gas prices while the American companies that hire our people for this sector expect to see lower returns on capital. This is not a good trend and sends a strong market signal to serve the U.S. market (where prices are higher) from offshore facilities (where costs are lower).

Congress should consider more than just spending and borrowing from abroad. Key policies that would make stocks more attractive include:

Suspending the Mark-to-Market rule that makes banks look less valuable than they actually are.

Reinstating the Uptick rule so that short sellers do not have an advantage in driving down the value of stocks.

Today, I am introducing the ``Stock Market Recovery Act of 2009,'' mandating the SEC to implement these reforms. I am confident this will be a first step continuing the 4 percent rise we have seen today.

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Introduced in HouseIssued March 10, 2009

I

111th CONGRESS

1st Session

H. R. 1406

IN THE HOUSE OF REPRESENTATIVES

March 10, 2009

Mr. Kirk introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To direct the Securities and Exchange Commission to reinstate the uptick rule on short sales of securities and to suspend the application of mark-to-market accounting principles.

1.

Short title

This Act may be cited as the Stock Market Recovery Act of 2009.

2.

Reinstatement of the uptick rule

Not later than 90 days after the date of enactment of this Act, the Securities and Exchange Commission shall—

(1)

reinstate rule 10a–1 of the Commission’s rules (17 C.F.R. 240.10a–1);

(2)

rescind rule 201 of regulation SHO (17 C.F.R. 242.201); and

(3)

take such other actions as may be necessary to reinstate the price test restrictions that applied to short sales of securities prior to the Commission’s action in the proceeding entitled Regulation SHO and Rule 10a–1, adopted June 28, 2007 (Release No. 34–55970; File No. S7–21–06).

3.

Suspension of mark-to-market accounting

Not later than 90 days after the date of enactment of this Act, for purposes of any periodic or other reports required to be filed with the Securities and Exchange Commission, the Commission shall suspend, by rule, regulation, or order, the application of mark-to-market accounting principles with respect to any class or category of transaction as the Commission determines necessary or appropriate in the public interest and consistent with the protection of investors.