House Rejects Financial Rescue, Sending Stocks Plummeting 777 points: House Speaker Nancy Pelosi (D-Calif.) addressed the media after the House defeated the bailout package worth $700 billion - the Republicans did not like what she said.

By Jonathan Weisman, Washington Post Staff Writer, Tuesday, September 30, 2008; Page A01.

A bipartisan rebellion in the House killed a $700 billion rescue plan for the nation’s financial system yesterday, sending global stock prices plunging, prompting fierce recriminations on the presidential campaign trail and dealing President Bush his worst legislative defeat.

House Democratic and Republican leaders vowed to go back into negotiations to devise compromise legislation to stabilize the credit markets, but no talks were scheduled. After U.S. financial markets closed, with the Dow Jones industrial average down a one-day record of 778 points, or 7 percent, Treasury Secretary Henry M. Paulson Jr. tried to calm frazzled traders, assuring them that work on a market intervention would resume.

“I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy,” he said. “We’ve got much work to do, and this is much too important to simply let fail.”

Rarely has a congressional vote held such high drama and produced such immediate repercussions, directly from the House floor to the trading floor. Wall Street traders huddling around television screens watched lawmakers denounce the bailout legislation, and then sent the Dow plummeting. Stocks had recovered somewhat by the time the vote was gaveled to a close, but jittery investors sent them plunging again as Republicans and Democrats took turns blaming each other for the defeat. In a few hours, $1.2 trillion in paper wealth was wiped out.

As lawmakers in Congress pointed fingers, the collapse of the world’s financial markets only built steam. Brazil’s main stock index lost more than 9 percent on the news of the U.S. congressional vote, and fears spread that other emerging markets could feel the credit crunch. European bourses fell earlier in the day as a result of the financial struggles of major European banks, and regulators from Belgium, the Netherlands and Luxembourg moved to rescue the European banking and insurance giant Fortis. And Citigroup stepped in to buy Wachovia’s banking operations for $2.16 billion, making it the dominant bank in the Washington area.

On the 228 to 205 congressional vote, 140 Democrats voted yes and 95 voted no; 133 Republicans opposed the measure, while 65 approved.

“The Democratic side more than lived up to its side of the bargain,” said House Speaker Nancy Pelosi (D-Calif.).

House Minority Whip Roy Blunt (R-Mo.) said of the Democrats: “We’re going to reach back out to them. We’re going to be talking to our members and see how we can come together in the next few days to reverse whatever negative impact there may be in the economy over the next few days because Congress has failed to act.”

Yesterday, Bush called nearly every member of Texas’s Republican delegation, GOP aides said. He won over four of the 19.

Congressional leaders and the White House faced several options, none of them palatable just weeks before a heavily contested presidential election. Democratic leaders could choose to return with a measure guaranteed to win more Democratic votes, even at the expense of Republican support. Instead of simply purchasing distressed assets from financial institutions, some Democratic economists favor injecting lenders with cash in exchange for stock, letting the institutions figure out what to do with the mortgage-backed securities and other troubled assets weighing down their books.

A Democratic bill would also include more money for homeowners in or facing foreclosure and would change the bankruptcy law to allow judges to adjust mortgage repayment terms. But Democratic leaders would have to ensure that the measure could survive a filibuster in the Senate and would be signed by the president.

Republicans were advocating slight changes to the bill that could attract a handful of new votes. Party members might be enticed by a measure that would allow businesses to write off more past losses on this year’s taxes or a more robust expansion of mortgage insurance, financed by banks. Democrats could add more assistance to ailing state and local governments without raising too many GOP objections.

In the thick of the presidential campaign, the collapse of the deal left Washington buzzing with recriminations. Republicans — from Sen. John McCain’s top economic aide to the House GOP leadership — initially blamed Pelosi, saying her floor speech castigating Bush administration “policies built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision, and no discipline in the system” poisoned the atmosphere and invited partisan retribution.


In truth, few Republicans were on the floor to hear that speech, and those who were there showed no signs of discomfort, as they often do. Republican leaders backed away within hours, conceding they never had the votes they had promised.

When two-thirds of the House Republican Conference voted no, the McCain camp changed its pitch. Not a single member of McCain’s home-state Arizona House delegation voted for the bill.

Obama campaign aides gleefully shared a quote from McCain’s chief political strategist, Steve Schmidt, who said Sunday on NBC’s “Meet the Press”: “What Senator McCain was able to do was to help bring all of the parties to the table, including the House Republicans, whose votes were needed to pass this.”

Obama delayed a campaign event in Westminster, Colo., to speak to Paulson and Pelosi, then told his audience: “One of the messages I have to Congress is, ‘Get this done, Democrats; Republicans, step up to the plate.’ “

For Bush, the defeat was the starkest sign yet that a president who once had lockstep support among congressional Republicans has all but lost his influence.

He has had vetoes overridden, on a water projects bill and a major agriculture measure, but nothing to compare to the defeat of a measure he had said was critical to the nation’s economy. In the days before the vote, the president addressed the nation about the urgency of the plan, spoke out daily, even summoned congressional leaders and the two presidential candidates to the White House.

The divisions in both the Republican and Democratic ranks that had bedeviled negotiators simply could not be mended that easily. House Republican leaders acknowledged they let Pelosi put the bill on the floor with at least a dozen Republican votes still needed. But they thought they could win them over, with stock prices falling and time running out.

Conservative Republicans who have been decrying the bailout never wavered in their opposition, nor did liberal Democrats who saw the measure as a rescue plan for Wall Street millionaires. And House members in tough reelection bids abandoned the legislation in droves.

Opponents included the most endangered Democrats, including Reps. Carol Shea-Porter (N.H.), Nick Lampson (Tex.) and Nancy Boyda (Kan.), and the most endangered Republicans, from conservative Marilyn Musgrave (Colo.) to moderate Lincoln Diaz-Balart (Fla.). Democrats Mark Udall (Colo.) and Tom Udall (N.M.), both running for Senate seats, voted no. Low-level members of the Republican leadership, such as Marsha Blackburn (Tenn.) and Thaddeus McCotter (Mich.), defied their senior leaders. African American Democrats with virtually no prospect of defeat voted no en masse.

Still, with the options declining and their members eager to get home to campaign, congressional leaders insisted they would not adjourn for the year without some kind of stabilizing legislation. The shock waves of the House defeat are expected to rock world markets this morning. Already, the carefree attitude that international bankers had been taking has begun to give way, with the European Central Bank moving an extra $173 billion into European markets yesterday.

“What happened today cannot stand,” Pelosi said. “We must move forward, and I hope that the markets will take that message.”

Staff writers Paul Kane, Anne E. Kornblut, Michael D. Shear and Perry Bacon Jr. contributed to this report.

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 http://www.ourfuture.org/blog

After the Revolt: Top 5 Reasons to Vote Against Wall Street’s $700 Billion Bailout.                                                by David Sirota, September 28, 2008,

On Calming Down, Not Celebrating and Getting it Right
By David Sirota, September 29th, 2008

Bank Lobbyists Laugh At Congressional Dems
by David Sirota, September 24, 2008

Don’t cry for the bailout plan
by Hank Kalet, September 30, 2008

The fix was in. The leadership of both parties in Congress, both major presidential candidates, media poobahs, financial statesmen from Warren Buffett to Bob Rubin, all weighing in to support giving Treasury Secretary Henry Paulson a $700 billion revolving fund to bail out Wall Street.
And then Americans said, “stuff it.” The bill was incredibly unpopular. Calls against were running as high as 200 to 1, with venom. With Americans struggling—their salaries not keeping up with the cost of gas and health care, their homes losing value, their savings exhausted, their credit cards maxed out, foreclosures and bankruptcies on the rise—giving the Treasury Secretary, the former head of Goldman Sachs, $700 billion to try to bail out his friends on Wall Street was a very hard sell.
Congress can’t walk away. Something must be done. We need a real plan:
• to get the economy going
• for financial reconstruction
• to staunch the housing hemorrhaging.
So in the House, the vote counters went to work. In both parties, to the extent possible, members in contested districts were to be given permission to vote against the bill. Those in safe districts were expected to vote for it. Leadership labored to assemble a bare bipartisan majority to pass it. But that increased the influence of progressives on the left and conservatives on the right who had relatively safe seats. Members of the Progressive Caucus split 50-50, but Speaker Nancy Pelosi produced the 150 votes she promised. Conservatives, eager to distance themselves from Bush, revolting against House Minority Leader John Boehner’s leadership and hoping to blame Democrats for the mess, bailed out on the bailout in large numbers. Pelosi wisely decided not to try to force it through with Democratic votes only.

But Congress can’t walk away. Something must be done. The markets were already indicating the Paulson plan was inadequate. Conservatives are truly out to lunch. Their plan featured suspending capital gains taxes (as if investors would then rush to put their money in the banks’ toxic paper), and further deregulation, letting banks hide the current value of their assets by suspending mark-to-market rules. That actually made it into the final bill, but it hardly would increase confidence in Wall Street. Rather than making further compromises with the conservatives who simply don’t get it, Democrats should put forth a plan that is far bolder and that deals with the real problems.

***

1. We need a real plan to get the economy going.
The Paulson plan had a big price tag, but wasn’t likely to work. It was, as Nobel Prize winner Joseph Stiglitz noted, essentially a version of the trickle-down economics that got us into this mess. Bail out the guys at the top and the benefits will trickle down to the rest of us.
The financial crisis comes from the collapse of an $8 trillion housing bubble. Banks—and many homeowners—made a lot of bad bets on the assumption that housing prices would always go up. The shadow banking system—including the off-balance sheet entities set up by the commercial banks—borrowed massively to make those bets. They invented exotic securities and over the counter, unregulated credit swaps and the like to add layers and layers to the house of cards.
Now it’s collapsed. The real economy is in trouble. Consumers have lost trillions in home equity and are tightening their belts. We are headed into what is likely to be a long and severe downturn. Defaults on mortgages, credit cards, auto loans and other consumer debt are rising. Banks and investment houses have no idea what the value of the paper they own is, much less the condition of other banks. Financial markets are close to freezing up.
So Paulson asked for the authority to bail them out—to buy some of the toxic paper, not all of it by any means—to “restore confidence” and create a market price for the stuff. Good luck with that.

In fact, the downturn in the real economy is more likely to send the pain upward. We already have rising unemployment; declining consumption; collapsed construction and decimated manufacturing sectors; sinking retail; and financially strapped states and localities about to make deep cuts in health care and construction, and lay off police, teachers and other public workers.

So what does the administration do? The president says it is “premature” to have a serious stimulus plan to get the real economy going. The Democratic leadership offers up a token, $50 billion stimulus. The Republicans in the Senate wage a filibuster to kill it.

Worse, by authorizing $700 billion for the bank bailout, Congress would set up those who will argue that we have no money left to stimulate the real economy.
Instead progressives should demand a real—$200 billion or more—stimulus that invests in new energy, extends unemployment benefits, aids states and localities to avoid debilitating cuts, rebuilds our crumbling infrastructure and puts people to work.

***

2. We need a plan for financial reconstruction.

Second, the Paulson plan itself simply does not go far enough to deal with the reality that Wall Street needs to be purged of insolvent firms, excess capacity, and that imprudent lenders and investors have to take their losses. Paulson is looking to restore confidence by buying some of the banks’ toxic paper. He could well end up with a Halloween plan, pumping blood into the living dead.

What we need, as Alex Pollock and John Makin, both of the conservative American Enterprise Institute, argue, is a Reconstruction Finance Corporation that has the power to take over financial firms, sort out the solvent from the insolvent, close down some, merge others, and back those that are solvent. Sweden provides, as many have shown, a good example of how this can be done—with remarkably little cost to the taxpayer.

***

3. We must staunch the housing hemorrhaging.

Finally, more direct steps should be made to help forestall foreclosures and insure that housing prices don’t simply collapse. The Paulson bill did instruct the Treasury Department to take steps to renegotiate mortgages on the paper that the government purchases. But with many of the mortgages sliced and diced into securities, Treasury will still have difficulty getting much done. And the bill, in a testament to Wall Street’s clout, omits the fairest way to sort out the victims from the bounders: empowering bankruptcy courts to renegotiate mortgages to keep deserving homeowners in their homes and reduce the flood of foreclosures across the country.
The turmoil in Europe and the decline in the markets are being read as warning signs that delay will be costly. And Congress is likely to try to pass a version of the defeated bailout bill with cosmetic changes once more, lipstick on pigs being in vogue. But, in fact, the Paulson plan deserved to fail. It exemplifies the philosophy that got us in this mess—the assumption, as Sen. Barack Obama noted, “ if we give more and more to those with the most, prosperity will trickle down to everyone else,” while ignoring the reality that the pain is shooting up.
We need real investment to kick-start the economy. We need an independent agency with greater power to take over and sort out the financial community. And we need greater focus on staunching the hemorrhaging of housing values on Main Street, not the value of securitized exotica in Wall Street’s basements. Let’s start with a bold plan that can work and negotiate from there.

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Top 5 Reasons to Vote Against Wall Street’s $700 Billion Bailout

There’s news this Sunday afternoon of a congressional deal to bailout Wall Street fat cats with $700 billion of taxpayer cash. Though the deal negotiated between congressional leaders and the White House is better than what Treasury Secretary Henry Paulson originally proposed early last week, it remains an insulting atrocity, having omitted even basic aid to homeowners, bankruptcy reforms and any modicum of future financial industry regulation. Now, the New York Times reports that the Democratic leadership may not have the votes to pass this bailout. So without further ado, here are the top 5 reasons (in no order) why every single member of Congress - Democrat and Republican - should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now - let them hear your voice.
1. BAILOUT’S INHERENT FISCAL INSANITY COULD MAKE PROBLEM WORSE
When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it’s akin to check kiting, which is is illegal. Apparently, though, when the government does it, it’s billed as Serious Public Policy. Because that’s what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan’s underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is “not based on any particular data point” - that is, they created it out of thin air because “We just wanted to choose a really large number.” Slapping that amount of money onto the national credit card when our government can’t even justify the amount is beyond absurd - it is insane.
It didn’t have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to “submit a plan to Congress on how to recoup any losses,” according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street’s misbehavior.
2. EXPERTS ON BOTH THE LEFT AND RIGHT SAY THIS BAILOUT COULD MAKE THINGS WORSE
Primum non nocere is the latin phrase for “first do no harm” - the priority principle for any EMT working on a sick patient. It should be the same priority for Congress at this moment - and a growing group of esteemed experts on both the Right and Left are insisting that this bailout bill could make things worse. Here’s a review:
The Washington Post reported on Friday, almost 200 academic economists “have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear.”
NYU’s Nouriel Roubini, the visionary who had been predicting this meltdown, says “The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan.”
Harvard’s Ken Rogoff, a Former Federal Rerserve and IMF official, insists that the prospect of this bailout is, unto itself, taking a manageable problem and making it into a more intense crisis. He says that credit is frozen primarily because banks want to avoid dealing with other banks that might drive a hard bargain, and instead would rather wait for free money from the government. Without the prospect of that free money, Rogoff suggests that credit would probably begin moving again, if slowly.
Dean Baker of the Center on Economic and Policy Research says that spending so much cash so quickly on such a poorly conceived plan could have the effect of making it impossible to fund economic stimulus that is the real way out of this mess. “Suppose the Paulson plan goes through,” he writes. “It is virtually certain that the economy will weaken further and the number of foreclosures and people without jobs will continue to rise. This is the fallout from a collapsing housing bubble…When families respond to their loss of home equity by cutting back their consumption it will deepen the recession. In this context it might prove very important to have the resources needed to provide a substantial stimulus. [and] there is no doubt that this bailout will make further stimulus much more difficult to sell politically.”
Meanwhile, it’s not even close to clear that this is a problem that requires such an enormous response. As mentioned above, the Treasury Department admits it has absolutely no factual basis for requesting $700 billion - an amount equivalent to about 5 percent of our entire economy. Additionally, the Washington Post reports that “Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.” Indeed, “many smaller banks said they were actually benefiting from the problems on Wall Street” and “even some of the nation’s largest banks, which have pushed hard for a federal bailout, deny that the current situation is forcing them to reduce lending.”
The questions, then, are simple: In the face of this bipartisan opposition from objective experts, why should a lawmaker instead believe the same Bush officials who helped create this crisis with their deregulation, the same Bush officials who just months ago said everything was AOK? Shouldn’t there be almost complete unanimity among both objective and partisan observers before spending 5 percent of our entire economy after just one harried week of White House demands? Fool me once shame on you, fool me twice, shame on me. It’s time, as The Who said, that we “don’t get fooled again.”
3. THERE ARE CLEARLY BETTER AND SAFER ALTERNATIVES
The mantra throughout the week has been that America has “no choice” but to pass Treasury Secretary Henry Paulson’s $700 billion giveaway - that, in effect, there are no alternatives. But that’s an out-and-out lie - one with a motive: Making it seem as if the only thing we can do is hand the keys to the federal treasury over to both parties’ corporate campaign contributors.
The truth is, there are a number of alternatives. Here are just a few:
In the Washington Post last week, Galbraith outlined a multi-pronged plan shoring up and expanding the FDIC, creating a Home Owners Loan Corporation, resurrecting Nixon’s federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.
The Service Employees International Union has drafted a plan based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their bad mortgages.
For those in the mindless, zombie-ish “someone has to do something, so we have to do what the White House says!” camp, consider the possibility that you are under the spell of the same kind of White House fear that led us to invade Iraq because of Saddam’s supposed WMD. Consider, perhaps, that there may not even be a compelling basis for doing anything just yet (or at least not anything nearly so huge), and that the whole reason there is this urgent push right now has nothing to do with the financial situation, and everything to do with creating the political dynamic to pass a wasteful giveaway - one that couldn’t be passed otherwise without a sense of emergency. And ask yourself why you would listen to this White House instead of listening to those experts who have been predicting this crisis and are now advising against this bailout - experts like CEPR’s Baker. In two separate posts (here and here), he says that letting the problem play out could be the best path, because Treasury and the Fed may already have the tools they need. Following this path, the worst thing that happens is “The Fed and Treasury will have to step in and take over the banks [which] is exactly what many economists argue should happen anyhow,” Baker writes. “So the outcome of the worst case scenario is a really frightening day in which the whole world financial system is shaken to its core, followed by a government takeover of the banks. Eventually the government straightens out the books and sells them off again. But the real threat here is not to the economy, it is to the banks.”
Then there is the idea of simply taking the $700 billion and simply give it to struggling homeowners to help them pay off part of their mortgages. This hasn’t even been discussed but the thought experiment it involves is important to understanding why there is, indeed, an alternative to the Paulson plan. If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks’ mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity. That would be a bottom-up solution helping the mass public, rather than a top-down move helping only financial industry executives.
On this latter proposal, some may argue that giving any relief to homeowners is “unfair” in that those homeowners created their problems, so why should taxpayers have to help them? But then, is helping homeowners any less fair than simply giving all the money away to Wall Street, no strings attached? I’d say no - and helping homeowners also serves a second purpose: namely, keeping people in their homes, which not only helps them, but helps an entire neighborhood (as any homeowner knows, nearby properties can be devalued when foreclosures hit).
4. ANY INCUMBENT VOTING FOR THIS PUTS THEMSELVES AT RISK OF BEING THROWN OUT OF OFFICE
As a preface, let me state that I think we live in a country where politicians too often listen to their donors and to the Establishment rather than their constituents, not the other way around. America is a country where our leaders dishonestly invoke the concepts of “Statesmanship” and “Seriousness” and their supposed hatred of “pandering” to justify ignoring what the public wants (as if giving the public what it wants is somehow not the objective of a democratic republic). So, in short, I don’t think there’s anything wrong with this bill being “politicized” by coming down the pike right before an election - in fact, I think it’s a good thing because the election - and the fear of being thrown out of office forces our politicians to at least consider what the public wants. I mean, really - would we rather have this decision made after the election, when the public can be completely ignored?
Polls overwhelmingly show a public that sees voting for this bill as an act of economic treason whereby the bipartisan Washington elite robs taxpayer cash to give their campaign contributors a trillion-dollar gift. As just two of many examples, Bloomberg News’ poll shows “decisive” opposition to the bailout proposal, and Rasmussen reports that their surveys show “the more voters learn about the proposed $700 billion federal bailout plan for the U.S. economy, the more they don’t like it.” Put another way, this bailout proposal has unified both the Right and Left sides of the populist uprising that I described in my new book and that is now even more angry than ever.
Any sitting officeholder that votes for this - whether a Democrat or a Republican - should expect to get crushed under a wave of populist-themed attacks from their opponents. We’ve already seen it start. In Oregon, Democratic challenger Jeff Merkley (D) is airing scathing television ads hammering Republican incumbent Gordon Smith for potentially supporting the deal. Similarly, this morning on Meet the Press, we saw Republican Senate challenger Bob Schaffer (CO) dishonestly papering over his own votes for deregulation and ripping into his opponent Rep. Mark Udall (D) for potentially supporting the deal. Incumbents, get ready for that kind of election-changing heat in your face if you vote “yes.”
This, by the way, could play out in the presidential contest. Barack Obama has been taking the advice of the Wall Street insiders in his campaign in endorsing this bailout. McCain has endorsed the vague outline, but he may ultimately back off once he sees the details, allowing him to then run the last month of the campaign as the economic populist in the race. I’m not saying it would work, considering McCain’s 26-year record of supporting the deregulatory agenda that created this crisis. But such a move could end up help him flank Obama on the defining economic issues of the race.
5. CORRUPTION AND SLEAZE ARE SWIRLING AROUND THESE BAILOUTS - AND AMERICA KNOWS IT
The amount of brazen corruption and conflicts of interest swirling around this deal is odious, even by Washington’s standards - and polls suggest the public inherently understands that. Consider these choice nuggets:
Warren Buffett is simultaneously advising Obama to support the deal, while he himself is investing in the company that stands to make the most off the deal.
McCain’s campaign is run by lobbyists from the companies that stand to make a killing off a no-strings government bailout.
The New York Times reports that the person advising Paulson and Bernanke on the AIG bailout was the CEO of Goldman Sachs - a company with a $20 billion stake in AIG.
The Obama campaign’s top spokesman pushing this deal is none other than Roger Altman, who Bloomberg News reports is simultaneously “advising a group of investors who are trying to prevent their shares from being diluted in the U.S. takeover of American International Group Inc.” - that is, who have a direct financial interest in the current iteration of the bailout.
Add to this the fact that the negotiations over this bill have been largely conducted in secret, and you have one of the most sleazy heists in American history.
**********
If this bill passes, it will be a profound referendum on the dominance of money over democracy in America. That - and that alone - would be the only thing an objective observer could take away from the whole thing.
Money will have compelled politicians to not only vote for substantively dangerous policy, but vote for that policy even at their own clear electoral peril. Such a vote will confirm that the only people these politicians believe they are responsible for representing are are the fat-cat recipients of the $700 billion - the same fat cats who underwrite their political campaigns, the same fat-cats who engineered this crisis, and want to keep profiteering off it. Any lawmaker who takes that position is selling out the country, as is any issue-based political non-profit group - liberal or conservative - that uses its resources to defend a “yes” vote rather than demand a “no” vote. This is a bill that forces taxpayers to absorb all of the pain, and Wall Street executives to reap all of the gain. It doesn’t even force the corporate executives (much less the government leaders) culpable in this free fall to step down - it lets them stay fat and happy in their corner office suites in Manhattan.
Even if they believe that something must be done right now, lawmakers should still vote no on this specific bill, and force one of the very prudent alternatives to the forefront. They shouldn’t just vote no on Paulson’s proposal - they should vote hell no. Our economy’s future depends on it.

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Monday, September 29, 2008 - Don’t cry for the bailout plan - Bipartisan support for the federal bailout plan has been offset by bipartisan opposition.

 http://channel-surfing.blogspot.com/2008…

A 228-205 vote killed the bailout plan today, with progressive Democrats and conservative Republicans joining to stymie the wishes of the White House and Congressional leadership.

Over the last week, the opposition has been painted as being composed mainly of Republican back-benchers, the younger, hardcore populist conservatives who lack the ties to Wall Street that the leadership has developed over the years.

Kucinich had distributed this letter to House colleagues this morning, according to his office:

If you are tempted to vote for this legislation because you think it will keep people in their homes, think again: in fact, Treasury will not be able to change the terms of bad mortgages because the Act does not require Treasury to purchase a controlling share in the underlying mortgage backed securities and collateralized debt obligations. The Secretary will be powerless to make any real and substantive change in the terms of mortgage. The Secretary will have NO power to avoid foreclosures and keep families in their homes.

Because the rule prohibits amendments, and we do not have the opportunity to correct this terrible oversight, I must encourage you to oppose this bill so that it can be reworked and the oversight addressed. To be sure, the recent past has taught us the valuable lesson that action in haste can be more destructive than delayed action.