Political News

Two from N.C. change votes on bailout

Posted October 3, 2008


After a week of tumult, an unprecedented government bailout of the financial industry gained ground in the House on Friday and leaders in both political parties expressed optimism the $700 billion measure would clear Congress by day's end for President Bush's signature.

Representatives opened a 15-minute window for an electronic roll vote at 1:07 p.m.

With the economy showing fresh signs of weakness, the measure was expected to advance on a 223-205 vote. If it does pass, President George W. Bush could sign it the same day.

An Associated Press tally showed 29 lawmakers who sent an earlier bailout bill to unexpected defeat Monday had changed their minds and would vote in favor of the revised legislation, far more than the dozen needed. Officials said changes made to the measure had sparked a far smaller number of defections among previous supporters.

North Carolina Republican Rep. Howard Coble was among those who changed his mind and will now vote for the package.

Coble said on the House floor Friday that feedback from his constituents over the week heavily influenced his decision. After he and the House voted down the proposal Monday, he said he received calls and e-mails from constituents voicing support for the measure.

Coble joins Republican Rep. Sue Myrick in embracing the plan after voting against it.

Myrick said the legislation is still "full of things" she doesn't believe in, but that she will vote for it because the country is on "the cusp of a complete catastrophic credit meltdown."

Rep. Melvin Watt, D-12th district, told WRAL News that he planned to vote for the measure, while Rep. Virginia Foxx, R-5th district, said that she would oppose it. Reps. Bob Etheridge, D-2nd district, and Mike McIntyre, D-7th district were undecided before the vote began.

WRAL News was seeking comment from other N.C. representatives.

"I'm optimistic about today. We're not going to take anything for granted but it's time to act," said House Republican Leader John Boehner of Ohio.

"I think it will pass," agreed Rep. Jim Clyburn, the chief Democratic vote-counter, as debate unfolded in the House chamber.

The Senate passed the measure earlier in the week on a bipartisan vote of 74-25.

"No matter what we do or what we pass, there are still tough times out there. People are mad - I'm mad," said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, "We have to act. We have to act now."

Rep. John Lewis, D-Ga., another convert, said, "I have decided that the cost of doing nothing is greater than the cost of doing something."

Critics were unrelenting.

"How can we have capitalism on the way up and socialism on the way down," said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation - an unprecedented federal intervention into the private capital markets.

If anything, the economic news added to the sense of urgency.

The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. Employers slashed 159,000 jobs from their payrolls, the most in five years. That came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent.

The stock market opened higher on anticipation that the bill would pass, and the financial industry shakeout rolled on unpredictably.

Wachovia announced it had agreed to be acquired by San Francisco-based Wells Fargo & Co rather than by Citigroup. Executives said the new arrangement would keep the Federal Deposit Insurance Corp., on the sidelines, thus preventing any depletion of the government's fund that backs bank deposits.

The FDIC said it was sticking behind the Citigroup plan, leaving the fate of the bank in limbo.

It was little more than two weeks ago that Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.

The core of the plan remains little changed from its conception - the Treasury Department would have $700 billion at its disposal to purchase bad mortage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand.

At the same time, lawmakers have dramatically changed the measure, insisting on greater congressional supervision over the $700 billion, taking measures to protect taxpayers, and insisting on steps to crack down on so-called "golden parachutes" that go to corporate executives whose companies fail.

Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions.

The legislation had the support of the leadership in both parties - as was the case in the Senate, where it passed on Wednesday on a bipartisan vote of 74-25.

President Bush has been lobbying aggressively for its passage, and the White House issued the latest in a series of grim warnings of the risks of defeat. "If the financial markets fail to function, American families will face great difficulty in getting loans to purchase a home, buy a family car or finance a child's education," it said in a written statement.

The two major party presidential candidates, Barack Obama, the Democrat, and John McCain, the Republican also supported the bill and worked to assure its passage.

The vote on Monday staggered the congressional leadership and contributed to the largest one-day stock market drop in history, 778 points as measured by the Dow Jones Industrial Average.

Across the Capitol, party leaders decided to add legislation extending a series of popular tax breaks, as well as spending on rural schools and disaster aid. They also grafted on a bill to expand mental health coverage under private insurance plans.

At the same time, the change in federal deposit insurance and the action by the SEC on an obscure accounting rule helped produce a trickle of converts.

GOP Rep. Ileana Ros-Lehtinen of Florida, said she was switching her "no" vote to a "yes" after the Senate added some $110 million in tax breaks and other sweeteners before approving the measure Wednesday night.

"Monday what we had was a bailout for Wall Street firms and not much relief for taxpayers and hard-hit families," Ros-Lehtinen told The Associated Press. "Now we have an economic rescue package."

Republican Rep. Jim Ramstad of Minnesota also switched to "yes," partly because the Senate attached the mental health measure.

Democratic Rep. Emanuel Cleaver of Missouri was switching, too, said spokesman Danny Rotert, declaring, "America feels differently today than it did on Monday about this bill."

And Democratic Rep. Shelley Berkley of Nevada said she would back the bill after business leaders in her Las Vegas-area district made it clear how much it was needed. She said, "There isn't a segment of the population that hasn't been slammed and is not asking for some relief."


This story is closed for comments.

Oldest First
View all
  • Igor Oct 3, 2008

    "I'm sorry, but I think some of these banks and some of this credit should dry up. Lessons were NOT learned well enough since 1929, evidently."

    Oh they are failing...in droves...and the credit? The credit well is a desert TODAY. Lessons are being learned, but to get the banks lending again...this bill was needed. Without intervention, it is the 1930's all over again.

    Yes our country's morals are down the tubes, but greed has been, and always be there...fact of life, but bankrupting the country as a whole just to teach a hard lesson to the few who got us in this mess is something we cannot allow to happen again.

  • CestLaVie Oct 3, 2008

    I KNOW most everyone is to blame. Call if highhorse, call it whatever you want, this bailout is still a waste. This bailout won't get it done. And, by adding all the pork to the House version, they've added insult to injury. You know why it won't do much good? This country is in a far different place than 1929-1930, not so much eonomically, but politically, and mostly, MORALLY. Greed is rampant; ethics are down the tubes; morals for the most part are down the tubes.

    And yes, I do know what happened after 1929, and after WWII. The country pulled together and for each other. Many of the greedy ones then took their own lives & got out of the way, so the stronger ones could move on. It was a pitiful time, but moral strength prevailed. Not so today. I'm sorry, but I think some of these banks and some of this credit should dry up. Lessons were NOT learned well enough since 1929, evidently.

  • Igor Oct 3, 2008

    animal lover...the government did nothing in 1929 and you know what happened (or maybe you don't)...

    Please get off the high horse of "who is to blame"...Everyone (the government, banks and the american people as a whole) is to blame. Placing blame will not fix this situation. When the dust clears, regulation and oversight will be back in the financial industries (much like the 1932 and 1934 SEC acts) and the loose credit that started all this will not be back, but the alternative is NO CREDIT PERIOD, and with that, the economy can tank. The Great Depression started proimarily based on the collapse of banks and the drying up of credit.

    Go ahead and gripe about the past errors of others, this bill is an attempt to save the country from ourselves

  • CestLaVie Oct 3, 2008

    "Sad you guys can't see the big picture of what is happening..."

    Who do you mean by "guys"? Congress or posters?

    If you mean posters, I'm sorry but I do see the big picture. And yes, this "sticks" and it is NOT the right thing to do. Once again, greed & politics are not handling the problem, long before now, and NOW. Government intervention in the marketplace (of its specific choice, by the way); added pork on top of an unnecessary bailout; government inaction for decades now; rampant greed on the part of everyone involved, 1929 AND now; deregulation; etc.; etc.

    "...it is an attempt to stabilze our fragile economy from pure freefall, a freefall that could cost all of us 10 times what this bill will..." BS. Who caused this "fragile" economy or who helped it become one? Where were prior answers? Why weren't they forthcoming decades ago? And even with this, it may still NOT BE ENOUGH!! Then what?

  • Moriahe Oct 3, 2008

    Howard Coble and Richard Burr have lost my vote, and they've both received a letter from me informing them of this.

  • SlowDecline Oct 3, 2008

    I hear and see these comments of socialism surrounding government activities such as this. Pure market-based capitalism is what brings these things about. Greed drives people, not the desire to serve customers and provide jobs.

    Social democracy works well in the countries on the planet with the highest standard of living. Socialism doesn't work; we know that. We're learning, in a rather difficult way, capitalism doesn't either. Like in so many things, it's that "happy medium" between the two extremes.

  • ifcdirector Oct 3, 2008


    Vote Hugh Webster For Congress!

  • ifcdirector Oct 3, 2008

    "I'm voting against whoever votes for the bailout. Brad Miller, this means you."

    Good luck with that. Miller built his district custom made for his political career and he and David Price are career politicians. You may as well have given him a Supreme Court appointment.

  • Igor Oct 3, 2008

    The government did not act swiftly in 1929/1930 when the United States economy was in this almost exact same situation...

    For all those who do not know what happened after that, read about the "Great Depression" that lasted 10 or so years and then call this a "bailout"...it is an attempt to stabilze our fragile economy from pure freefall, a freefall that could cost all of us 10 times what this bill will...

    Sad you guys can't see the big picture of what is happening...

    Yes it sticks...but it is the right thing to do...

  • Rodney F Oct 3, 2008

    Only an institution that would pay hundreds of dollars for toilet seats and hammers would believe it is a good idea to buy billions of dollars of toxic investments. Vote the bums out in November.