State News

Dole, Burr split on bailout package

Posted October 1, 2008 5:04 p.m. EDT
Updated October 1, 2008 7:09 p.m. EDT

— U.S. Sen. Elizabeth Dole said Wednesday she would vote against a revised $700 bailout of the nation's financial industry, while  while Sen. Richard Burr said he would support the plan.

Dole said Wednesday the proposal is "a government takeover of our economy with no protection for taxpayers." While she said the relief package was an improvement over the Bush administration's original plan, Dole said it does nothing to fix the housing crisis largely blamed for triggering the meltdown of the nation's credit markets.

"Now is the time for careful, deliberate actions, not hasty, knee-jerk reactions," Dole said in a statement. "I will stand up for the taxpayers and vote no."

Burr said he expects the revised proposal to pass, with about 70 to 75 votes in favor of it.

The revised proposal includes sweeteners designed to appease House lawmakers, including energy tax breaks and an increase in the limit on federal bank deposit insurance from $100,000 to $250,000.

"It does put a depositor in a position where they stop moving moving money from institution to institution to stay under the $100,000 cap," Burr told WRAL News.

 Dole said the added provisions boost the cost of plan to more than $800 billion.

The House rejected the initial bailout plan Monday, and Burr said investors lost $1.2 trillion in the stock market that day, which add urgency to the need to pass the revised plan.

"The revisions are not huge, but (House members) certainly have a different perspective on the degree of the crisis," said Burr, a longtime House member.

Democratic state Sen. Kay Hagan, who is locked in a tight race for Dole's seat, said Wednesday she wanted to see the final measure before taking a position. She also declined to voice an opinion on the initial bailout plan that failed during a vote in the House earlier this week.

"We are in a precarious position," Hagan said. "I want to make sure we don't have a rush to judgment on this."

Dole serves on the Senate's banking committee, whose leaders brokered the negotiations between lawmakers and the White House. Rather than the plan before the Senate, which would spend billions to buy deeply discounted mortgage-backed securities at the center of the crisis, she said she would like to see a significant and immediate tax credit for purchasing a home, a suspension of "mark-to-market" accounting, and a program for securing or guaranteeing loans to banks.

Hagan was less specific, saying she would like to see increased oversight of the industry, a cap on executive pay and mechanisms to keep people in their homes.

"We obviously need action," Hagan said. "But I want to make sure we get it right."

The government's plan, pushed by the Bush administration and top lawmakers on both sides of the aisle, would allow the government to spend billions to buy bad assets, removing them from the books of financial institutions hit by a freeze in credit. Leaders of the push hope it will ease the concerns of banking firms, giving them more piece of mind as they return to lending to businesses and individuals.

Treasury Secretary Henry Paulson has said the measure will benefit both companies and individuals who could be damaged by ongoing turmoil.