Beginning in September 2008, the United States began experiencing the serious effects of a tightening credit market.  As Wall Street began to suffer the effects of bad loans in the housing market, major investment banks found themselves in financial collapse from the collective strain of billions of dollars of losses.

AH&LA believes that legislation is necessary not only for the U.S. lodging industry but also for millions of average Americans who rely on the credit market to finance homes, run their business, pay for their college, and use credit cards.  These bills will restore confidence in the credit markets and unfreeze what is potentially a calamitous national financial situation.  

2008 Legislation

In response to the financial crisis that blossomed in full force in mid-September 2008, Congress quickly began considering legislation to rescue the economy from this financial collapse.  AH&LA began lobbying the House and Senate in support of the Treasury Department's plan.  The House considered legislation (H.R 3997), but it was defeated 205-228 on Monday, September 29.  The Senate began considering its version of the legislation (H.R. 1424) on October 1.  The Senate approved the legislation 74-25 late in the evening of Thursday, October 2.  The House leadership voted Friday, October 3 on a 263-171 vote to approve the Senate bill.  The bill then was rushed to President Bush, who signed it the same day into law (Public Law 110-343).  Both the House and Senate bills are considered by AH&LA to be "Key Votes" for determining support of members of Congress.

The final bill authorizes Congress to give up to $700 billion in installments to the Treasury Department to establish a program to buy certain mortgage-backed securities and other assets relating to mortgages. The agency would be required to insure the assets and set up systems for congressional oversight. It would direct the Treasury to set limits on compensation for executives of companies whose troubled assets it purchases, and call on the department to develop programs to reduce foreclosures.

The bill would allow the department to immediately use $250 billion in authority to buy assets, with an additional $100 billion if the president certifies such an expansion. The president would have to provide a written request for the remaining $350 billion, which could be subject to Congressional disapproval. It would temporarily expand FDIC depositor protection to $250,000 per bank account.

The bill would extend dozens of expired or expiring tax provisions for businesses, including several energy tax provisions. It would provide a one-year adjustment to exempt more than 20 million taxpayers from paying the Alternative Minimum Tax on 2008 income.

2009 Legislation

In recognition that more economic assistance was needed, the incoming Obama Administration and the Democratic Congressional leadership began working on another stimulus package in late 2008.  AH&LA submitted a letter on Dec. 18 to Congress outlining the industry's thoughts on what should be included in any future legislation.

The second enormous stimulus legislative package (H.R. 1) passed in March 2009 and signed into law is an attempt by Washington to help give the faltering U.S. economy a huge injection of cash to lessen the impact of the economy’s current weakness.  The House’s bill was projected by the Congressional Budget Office to cost about $816 billion from 2009-2019, with $535 billion in new spending and tax breaks coming in 2009 and 2010.  The Senate bill, while structured with similar costs, also contains more than $110 billion in tax cuts for individuals and businesses.  The bills contain roughly $334 billion in tax incentives to help businesses jumpstart today’s moribund economy.

Both versions of the bill include hundreds of billions of dollars in assistance benefits, for state and local governments facing cutbacks, and for initiatives designed to create or save three million domestic jobs.  It also includes an extension of the Alternative Minimum Tax, and offers tax breaks to companies to hire and retain workers.  The House and Senate bill also extend a provision allowing businesses purchasing equipment to speed up the depreciation of those items through 2009, as well as extend the net operating loss carryback period. 

As of mid-summer 2009, there is talk in Washington of the need for further stimulus legislation, given the continued lackluster performance of the U.S. economy.  It is anticipated that Congress will wait until fall 2009 before considering the need for any new legislation.

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In support of these Acts, AH&LA issued these public communications in support of the House and Senate legislation:

AH&LA Advisory

Vote “YES” For The Plan:  AH&LA Supports Emergency Economic Stabilization Act, Urges Association Membership To Contact Congress Today  (Sept. 29, 2008)

AH&LA Press Release

White House Proposal “Helps Rebuild A Stable Economic Foundation”, AH&LA Supports U.S. Treasury Plan For Financial Markets (Sept. 25, 2008)

AH&LA Letters to Congress

AH&LA and Industry Letter to Congress Outlining Economic Growth Ideas   (Dec. 18, 2008)
Joint Lodging Industry Letter to U.S. House Urging Action   (Oct. 2, 2008)
Joint Business-Industry Letter to U.S. Senate Supporting H.R. 1424   (Oct. 1, 2008)

(Updated July 2009)