U.S. Lawmakers Spurn Pleas From Leadership in Rejecting Bailout

[Byron In Exile]

By Nicholas Johnston and Dawn Kopecki

Sept. 30 (Bloomberg) -- Lawmakers from Texas, Arizona, and California helped defeat a $700 billion credit-market rescue in the U.S. House, voting more in line with their followers, or constituents, than their leaders.

The bill was a priority for President George W. Bush, yet 15 of 19 Republicans from his home state, Texas, voted against it. Republican presidential candidate John McCain left the campaign trail to help the measure, which didn't get a single vote from his state of Arizona. Almost half the usually loyal California Democratic delegation rebuffed House Speaker Nancy Pelosi.

For too many lawmakers, five weeks before Election Day, the threat of market calamity and arm-twisting from party leaders couldn't overcome impassioned opposition back home, where the rescue plan is drawing fire as a bailout for rich Wall Street bankers.

"Americans are angry, and so are my colleagues,'' said Republican Leader John Boehner. "They don't want to have to vote for a bill like this.''

A Bloomberg/Los Angeles Times poll last week showed that 55 percent of Americans were against using taxpayer money to rescue Wall Street, with 31 percent in favor. Opponents, far more vocal than supporters, have seemed like an even bigger majority in congressional offices, which have been flooded with critical calls and e-mails.

"The American people rejected this bailout, and now Congress did likewise,'' Indiana Republican Mike Pence said after the vote.

In yesterday's action, a compromise plan worked out by congressional leaders and the Bush administration fell 12 votes short of approval. U.S. stocks plummeted the most since 1987, losing $1.2 trillion in market value. The Dow Jones Industrial Average nosedived 778 points, the biggest point drop ever.

Republicans Buck Leaders

Members of Bush's own party in particular bucked their leaders, as more than two-thirds of House Republicans rejected the measure. In the immediate aftermath, some Republican leaders pointed fingers at Pelosi, saying the Democratic speaker turned off some potential Republican votes with a speech blaming "failed Bush economic policies'' for the financial crisis.

The speaker's political jabs, however, weren't a factor to many conservative Republicans who just didn't want taxpayers ponying up $700 billion for Wall Street, said California Republican Representative Darrell Issa. The financial crisis left many lawmakers more frustrated with Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben S. Bernanke, and Securities and Exchange Commission Chairman Christopher Cox, Issa said.

"They aren't pissed off at Pelosi,'' Issa said. "They are pissed off at Paulson, they are pissed off at Bernanke, they are pissed off at Cox.''

'No Way to Sell This'

While most Democrats backed the proposal, 95 of them also voted no.

"There is no reason for us to go in there and bail out George Bush,'' Missouri Democrat Emanuel Cleaver said. "I don't think anyone is going to step out on a limb,'' he said, because "there is no way to sell this'' to voters.

Even so, before the vote, leaders of both parties were anticipating a narrow victory for the legislation. Adam Putnam, the House's No. 3 Republican, predicted a "squeaker.'' Jim Clyburn, the Democrats' chief vote-counter, predicted Democrats "are going to have enough votes.''

The bill failed 228-205, even after Democrats gave both parties' leaders an extra 23 minutes after time for the roll call had expired to implore colleagues to back the legislation.

"We did think we had a dozen more votes going to the floor than we had,'' said Roy Blunt of Missouri, the chief Republican vote-counter.

Patrolling the Floor

Pelosi and Illinois Representative Rahm Emanuel, the Democratic Caucus chairman, were among leaders patrolling the House floor for support.

At one point during the roll-call vote, Pelosi approached Representatives Bennie Thompson and Jesse Jackson Jr. Thompson shook his head "no'' before Pelosi walked away. Thompson and Jackson both voted against the bill.

Many representatives opposed the measure after meetings with former Federal Deposit Insurance Corp. Chairman Bill Isaac, who talked with groups of lawmakers over the past two days about alternatives to the steps outlined in Paulson's proposal, Issac said.

Isaac said he "wasn't trying to get anyone to torpedo the plan.'' Some lawmakers wanted to add amendments to make the plan more palatable to them. House leaders, however, wouldn't allow changes, Isaac said.

Wisconsin Democrat David Obey said Republicans must take responsibility for knocking down the plan.

'Stepped Up'

"The fact is that Democrats delivered 60 percent of our caucus for this bill, despite the fact that this is a Republican president's bill,'' Obey said. "There's a whole lot in that bill that we don't like either, but we stepped up to the plate as a caucus because it was the responsible thing to do.''

Some Democratic blocs rebuffed their leaders and opposed the bill: Members of the Hispanic Caucus rejected the measure 12-8 and Congressional Black Caucus members voted 21-18 against the bill.

"We do have a serious crisis,'' House Financial Services Committee Chairman Barney Frank said after the vote. "Clearly, a large number of members of the House don't believe that. Some had a different view. Some said there was no great crisis.''

Senate Banking Committee Chairman Christopher Dodd said the House's action represented more than just the failure of a bill. "It was a failure to understand the import of the decision,'' Dodd said. "It was a failure to step up and exercise the will.''

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGUdAgJdBQL0

 

[fgarvb1]

I have no doubt that the financial situation in he banking industry and therefore the whole USA and maybe even the world is in serious trouble.

However, it is a rare thing that a hastily put forth plain with broad sweeping unconsidered consequences and future implications turns out to be the best thing for the regular people.

It's $700,000,000.00 US Dollars NOW and who knows how much in the next 3-4 years.

Let's talk about this shit for a couple of weeks.!

 

[koalabear]

Wait, wait, don't vote yet the riders!

 

[Ham Murabi]

I have no doubt that the financial situation in he banking industry and therefore the whole USA and maybe even the world is in serious trouble.

However, it is a rare thing that a hastily put forth plain with broad sweeping unconsidered consequences and future implications turns out to be the best thing for the regular people.

It's $700,000,000.00 US Dollars NOW and who knows how much in the next 3-4 years.

Let's talk about this shit for a couple of weeks.!

Amen. It's like they pulled the $700B figure out of their hats.
I think you move into really dangerous ground when government starts dictating salaries, and I can't think of any good reason why ACORN should get part of the loot.
The market rebounded today. Is it possible the best thing government can do, short of letting Fannie and Freddie die, is ... nothing?

 

[fgarvb1]

Amen. It's like they pulled the $700B figure out of their hats.
I think you move into really dangerous ground when government starts dictating salaries, and I can't think of any good reason why ACORN should get part of the loot.
The market rebounded today. Is it possible the best thing government can do, short of letting Fannie and Freddie die, is ... nothing?

......................................................................................................................

Some people are suggesting the very thing.

While i don't like Government in my personal business or public business I do think this country needs some sort of general watch dog of some kind.

This crap did not happen over night or in the dark.

Some rules or guideline may be in order.

Jail time would be nice.

 

[Odd_ball]

They are proposing a worldwide financial "watch-dog".

A global monetary "authority".

http://truediscernment.wordpress.com/2008/09/28/financial-times-we-need-a-global-monetary-authority/


NWO one way or another.

 

[Ham Murabi]

......................................................................................................................

Some people are suggesting the very thing.

While i don't like Government in my personal business or public business I do think this country needs some sort of general watch dog of some kind.

This crap did not happen over night or in the dark.

Some rules or guideline may be in order.

Jail time would be nice.

But the people I'd put in jail happen to be elected officials, many if not most of whom have never written a payroll check, who think they can make the economy work better.

 

[Byron In Exile]

But the people I'd put in jail happen to be elected officials, many if not most of whom have never written a payroll check, who think they can make the economy work better.

They've graduated from making it work better to being its annointed saviors, now.

But the reason you're hearing about all this turmoil in world financial markets, by the way, is because the institutions the Congress is going to "save" to in order to "save" the American people aren't even American institutions. They're international institutions. And their stockholders aren't just Americans, they're European, Japanese, Chinese, Saudi Arabian, etc. as well.

That's right, Congress is tapping the American taxpayer, once again, to help wealthy financiers not just in America, but all over the world.

 

[Odd_ball]

That's right, Congress is tapping the American taxpayer, once again, to help wealthy financiers not just in America, but all over the world.

And who crashed the markets to push the bailout?

Probably those who stood to gain the most from the pillaging of the taxpayers.

 

[Ham Murabi]

And who crashed the markets to push the bailout?

Probably those who stood to gain the most from the pillaging of the taxpayers.

That would be Fannie and Freddie, two "quasi" government agencies with starring roles by Jimmy Carter, Bill Clinton and Barney Frank. Talk about pillaging the taxpayers ...

 

[Odd_ball]

That would be Fannie and Freddie, two "quasi" government agencies with starring roles by Jimmy Carter, Bill Clinton and Barney Frank. Talk about pillaging the taxpayers ...

How simplistic. You really think no other commerical interests had their greedy little fingres dipped in the FF pie?

Please.

 

[Byron In Exile]

That would be Fannie and Freddie, two "quasi" government agencies with starring roles by Jimmy Carter, Bill Clinton and Barney Frank. Talk about pillaging the taxpayers ...

And that's another thing.

Didn't the US government just take these over?

Why not let them lend the money to Americans needed to re-establish liquidity in the capital market? Oh... that's right, they're national now. The House of Saud would probably not favor that solution.

 

[Ham Murabi]

How simplistic. You really think no other commerical interests had their greedy little fingres dipped in the FF pie?

Please.

You haven't kept up, have you? The bailout starts with Fannie and Freddie. You bet there was greed involved, and Freddie and Fannie provided the opportunity.

 

[Odd_ball]

You haven't kept up, have you? The bailout starts with Fannie and Freddie. You bet there was greed involved, and Freddie and Fannie provided the opportunity.

Wrong. You forgot such giants in the financial industry as AIG.

Just like you think no terror attacks have happened in the US since 9/11.

 

[Ham Murabi]

Wrong. You forgot such giants in the financial industry as AIG.

Just like you think no terror attacks have happened in the US since 9/11.

No trail from AIG to Fannie and Freddie. Better check again, Sherlock.
Tell me about a major terror attack in the U.S. since 9/11. Or a minor one, for that matter.

 

[Byron In Exile]

You haven't kept up, have you? The bailout starts with Fannie and Freddie. You bet there was greed involved, and Freddie and Fannie provided the opportunity.

Their unique role in the current disaster is due to FDR creating the FNMA in 1938 (as he explained on television at the time) as a government institution, and its then being "privitized" in 1968, which made it an institution for private profit, but with an implicit government guarantee of success. "Freddie Mac" was then instituted as its twin in order to avoid the appearance of monopoly, although basically on the same basis.

 

[Ishmael]

Their unique role in the current disaster is due to FDR creating the FNMA in 1938 (as he explained on television at the time) as a government institution, and its then being "privitized" in 1968, which made it an institution for private profit, but with an implicit government guarantee of success. "Freddie Mac" was then instituted as its twin in order to avoid the appearance of monopoly, although basically on the same basis.

We could have survived even that. But then came CRA in '77 and more teeth in it in '95. Everything started coming unhinged at that point in time.

Throw in Sarbans-Oxley and the new accounting rules and it all started swirling together into the perfect storm.

Ishmael

 

[unregistered]

 

[MeeMie]

Supposedly, there is an investigation going on by the FBI.

Taxpayers should demand that every single penny given to politicians and pseudo agencies over the years from the mtg/financial/insurance industry be returned to the bailout fund.

 

[unregistered]

 

[koalabear]

One way to get the dollar back up, crash the rest.

 

[Ishmael]

I say no bailout until there's an investigation, a criminal investigation. I challenge every Democrat to get on this band wagon. I'm sick and tired of the bullshit about who is or who isn't at fault. Let's find out, and put somebody in jail.

Forget it vette. You can't be criminally exposed just because you passed bad law.

Ishmael

 

[unregistered]

 

[Odd_ball]

I say no bailout until there's an investigation, a criminal investigation. I challenge every Democrat to get on this band wagon. I'm sick and tired of the bullshit about who is or who isn't at fault. Let's find out, and put somebody in jail.

You'd have to put a lot of people in jail. Probably 10's of thousands.

Every bank that kept giving loans to builders to make new homes. Every bank lobbyist that then pressured Congress to relax regs so they could fill all the units they financed building.

 

[Ishmael]

What if you took a bribe, and whatever happened to malfeasance?

The best you can expect is to kick the bastards out of office. That's not going to happen.

It's getting close to powder and ball time.

Ishmael