US chemicals, other industries urge bailout bill

01 October 2008 17:30  [Source: ICIS news]

WASHINGTON (ICIS news)--US chemical producers joined more than 50 other industry groups on Wednesday to urge Congress to pass the $700bn (€497bn) financial rescue plan, warning that the nation’s economy is at stake.

 

Cal Dooley, president of the American Chemistry Council (ACC), warned in a letter to members of Congress that “The potential failure of global capital markets would adversely affect the entire US economy, and we encourage members of the House and Senate to work together to resolve the crisis”.

 

The US Senate is expected to vote later on Wednesday for a bailout bill that is the same as the measure defeated in the House of Representatives on Monday, but includes tax breaks for middle class families and broader federal protection for individual bank accounts.

 

The basic bailout provisions being voted on by the Senate are essentially the same as those defeated in a fairly narrow House vote of 228-205. Only a simple majority of 218 votes is needed to approve the rescue plan in the 435-member chamber.

 

Those provisions would give the US Treasury Department up to $700bn to purchase nonperforming mortgage loans and mortgage-based securities from distressed banks and other financial institutions in a bid to free up financial liquidity and credit.

 

“Without reliable access to credit, the ability of ACC member companies to pay their bills, purchase inventory, meet payroll and make critical investments in new technologies would be severely compromised,” Dooley said.

 

He pointed out to members of Congress that 96% of US manufactured goods rely on chemicals in their production processes or as end-product components, suggesting that a credit-related shutdown in the chemicals industry would have broad impact on the economy.

 

The council joined 55 other industrial and service industries trade groups in urging Congress to approve the bailout.  Among those making the appeal were the American Forest & Paper Association, the National Association of Home Builders, the Business Roundtable, the US Chamber of Commerce, National Association of Manufacturers and trade groups representing automotive and equipment manufacturers.

 

($1 = €0.71)

 

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By: Joe Kamalick
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