Story by Chris Graham
And just like that, we had ourselves a bailout rescue. The House voted 263-171 today to pass a compromise $850 billion plan to buy up securities from Wall Street lenders to take pressure off the financial and credit markets, just four days after a vote on a similar legislative proposal failed on the floor of the House.
Fifth District Congressman Virgil Goode and Sixth District Congressman Bob Goodlatte, both facing re-election contests this fall, both voted against the measure. In a statement released this afternoon, Goodlatte said that while “inaction has never been an option,” he had reached the solution that the bailout rescue, which was proposed by the Bush administration and had the backing of a bipartisan group of lawmakers in the House and the Senate, was “not the solution to our long-term financial problems or our short-term credit-liquidity crisis.”
“The Financial Stabilization Package represents the largest corporate bailout in American history by taking $700 billion of taxpayers’ hard-earned money and handing it over to the very companies that made the bad decisions which led us into this mess in the first place. We literally reward those financial institutions who engaged in risky behavior to the tune of up to $8,000 for every family of four in the U.S.,” Goodlatte said.
“Since the federal government has to get this money from somewhere, it will borrow it, increasing the national debt. Not only will the government be paying $700 billion to bailout these reckless Wall Street companies, but also the billions of dollars in interest to pay off the debt. The bill requires the federal government to evaluate and purchase hundreds of billions of dollars of complex securities. Then the government will have to manage and ultimately sell these assets in an effort to recoup the taxpayers’ money. This is a responsibility for which it has no expertise and is a major intrusion in the financial markets with untold unintended consequences. This will directly affect every American by weakening the dollar and raising the cost of goods and services,” Goodlatte said in the statement.
Supporters of the measure didn’t come across as terribly enthusiastic on their side of the ledger, but the prevailing sentiment was that something had to be done to prevent the credit crunch on Wall Street from impacting negatively on Main Street.
“The plan wasn’t perfect. I would have loved to have been at the negotiating table to make sure that taxpayer interests were better protected. Particularly to ensure the taxpayer who participates has an upside opportunity to get their money back. But the choice was between acting or punting on the problem. And I believe that the failure to act will play havoc with our economy and people’s lives,” Democratic Senate candidate Mark Warner said yesterday during a meeting with reporters in Harrisonburg.
“This was a case again where the perfect could be the enemy of the good. This was a challenge about the credit markets, people’s ability to get a loan, companies’ ability to make payroll if they’ve got a line of credit. The downside risk of people losing jobs, people on retirement losing their savings, was just too great not to act,” Warner said of the vote in the Senate on Wednesday that passed the bailout rescue measure by a 74-25 margin.
President Bush wasted no time in signing the legislation today shortly after the House acted on the bill. “By coming together on this legislation, we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country. We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy,” the president said in remarks after the passage of the bill.
“Our economy continues to face serious challenges. This morning, we learned that America lost jobs again in September – disappointing news that underscores the urgency of the bill that Congress passed today. It will take more time and determined effort to get through this difficult period. But with confidence and leadership and bipartisan cooperation, we’ll overcome the challenges we face, return our nation to a path of growth, and job creation, and long-term economic prosperity,” Bush said.
Democratic Party presidential candidate Barack Obama cautioned that the passage of the bailout rescue is “not a moment for celebration, but a sobering day when we found out that three-quarters of a million jobs were lost just this year. Passing this rescue plan cannot be the end of our work to strengthen our economy – it must be the beginning.”\
“I’m glad that Democrats and Republicans put aside their differences, came together, and took this step,” Obama said. “I am also grateful to the House Democrats I personally spoke with who supported this rescue plan. While the administration initially asked for a blank check to solve this problem, over the last few weeks we were able to include important taxpayer protections to prevent golden parachutes for CEOs, provide independent oversight, help struggling homeowners, and ensure that taxpayers get their money back when the economy recovers,” Obama said.
Sixth District Democratic Party congressional nominee Sam Rasoul raised issue with the addition of $150 billion in largely pork-barrel appropriations that were included in the bailout rescue to entice House Republicans to support the measure. “But we’re in a sensitive situation. As much as I hate to see our federal tax dollars going toward rescuing these firms, the reality is that our economy depends on credit. We needed this bill to make sure that we shore up our credit markets, which are already in disarray. It was something that needed to be done because we wanted to make sure that we didn’t have an economic collapse that would follow this financial collapse,” Rasoul said.
Fifth District Democratic candidate Tom Perriello criticized the no vote by GOP incumbent Goode as a double-edged letdown to Virginia taxpayers “first by helping to create the problem and second by failing to create a real solution,” Perriello said. “The fruits of the Bush-Goode economy are clear: exploding federal debt, the highest gas prices ever, stagnating wages, and 10,000 jobs lost in Southside. Rep. Goode hid behind a “no” vote today, instead of showing the independent leadership that could have prevented this crisis, or come up with a real solution. This is far too little, far too late,” Perriello said.