11/05/2008 05:12 am ET Updated May 25, 2011

Spotlight on the House : Time for Termite Treatment

$800 billion dollars later, the federal government has regained a little control over our financial markets. We own some banks and are about to invest a few hundred billion buying the troubled assets of others. Warren Buffett says we might even make some money off the deal.

But do we have any clue how this stuff works?

A recent edition of the New York Times contained more eye-opening revelations about Wall Street that are catching the Main Streets of America by surprise. (Did you know people are betting on your local government to go bankrupt? And they're winning.) I can assure you that my colleagues in Washington have been a bit slack-jawed in recent weeks as they've gotten a crash tutorial in derivatives, credit-default swaps, collateralized debt obligations, commercial paper, options, puts and calls. All members of Congress know about LIHEAP, the heating bill assistance program for our low-income constituents. But few have heard of LIBOR, the interbank lending rate that ultimately determines if our constituents can get a car or find a job.

It's a travesty that it took a worldwide financial meltdown to get Congress' attention. But at least today, as our phones ring off the hook with calls from justifiably angry constituents, we're awake. And on Monday, when Chairman Henry Waxman convenes the House Oversight and Government Reform Committee to pick through Lehman Brothers' wreckage, I hope we're paying attention. I hope reporters are paying attention, and I hope the American people are paying attention.

In fact, I hope they watch us like hawks to make sure we follow through on our commitment to figure out how the financial services industry grew four times larger than the American economy, and how it stepped out from under Congressional oversight and regulation.

Our nation is heading into a period of real economic hardship. Let's use that time to strengthen and modernize our safety net so we can take care of people being left behind in the new economy. That means job retraining and real education reform that equips our students to compete globally. As banks deleverage, American families must too. We should all quit depending on credit cards and start living within our means. And for our part, Congress can make sure all financial products come with full disclosure and strong consumer protections.

This is only the beginning of a major effort. Government must regain control of taxpayer finances. We have nearly $55 trillion in future liabilities on the government's balance sheet, largely due to unfunded promises for Social Security, Medicare, Medicaid and other entitlement programs. We haven't begun to think about how we'll pay for them. This is your retirement and your health care, and our government is not prepared to honor its promises to pay for them with your tax dollars. Instead, we've been spending your tax dollars on tax breaks for wooden-arrow-makers and oil companies.

In fact, for the past eight years America has been digging our hole deeper with more deficit spending. (George W. Bush, you'll recall, has borrowed more money from foreign nations than his 42 predecessors--combined.) America can't afford to let these problems fester, and after this week, Congress can no longer feign ignorance. We went into the basement to bail out the economy, and guess what we discovered? There are termites in the woodwork.

On Nov. 5--Barack Obama's first day as president-elect--I hope he'll put on his exterminator gear and begin a thorough inspection of our fiscal house, because it's been rotted by termites. The last owners only had the place for eight years, but they did a "heck of a job" weakening government from the inside out. I've got a plan to get control of our long-term finances, but I don't care whose plan we use, as long as we get started soon. Only a solvent government will be able to rebuild our economy and meet the many challenges of the 21st century.