House Will Convene on Bailout Vote on Thursday

Local taxpayers werent sold on the idea of the bailoutby Lesley R. Chinn

After Mondays shocking defeat of a$700 billion bailout plan that couldhave rescued the nations ailingfinancialinstitutions, the House has agreedto make another attempt to pass themeasure when Congressconvenes onThursday.

Defeated by a vote of 228 to 205,more than two-thirds of theRepublicans and 40 percent oftheDemocrats voted against the bill.Sixty-five Republicans joined 140Democrats in voting yes while 133Republicans and 95 Democrats votedno.

Before the House voted, the Dow hadplunged to 705 but later increased by777 points. The declinesurpassed the721 point record set after theSeptember 11, 2001 terror attacks,although it fell short of thestock marketcrash on Black Monday, October19, 1987 and the Great Depression of1929.

President Bush is expected to meetwith Treasury Secretary HenryPaulson and other top advisers todetermine next steps. The vote cameafter the Bush administration and lawmakersworked over theweekend tostrike a deal to prevent a greater economiccrisis. The plan would haveallowed theadministration to use taxpayersmoney to purchase troubledassets from failed financial institutions.Im disappointed in the vote. ... Weve put forth a plan that was big becauseweve got a big problem,Bush stated in a press conference at the WhiteHouse.

No sooner than the vote was defeated,what was supposed to have been abi-partisan effort to get the billpassed,Republicans and Democrats beganpointing fingers justifying reasons whyboth parties voted eitherfor or againstthe measure. Some Republicansblamed House Speaker Nancy Pelosisnon bi-partisan speechfor the defeat,which attacked Bushs economic policies.The speech blamed the currenteconomic situationon the administrationsright-wing ideology of anythinggoes, no supervision, no discipline,no regulationof financial markets.

We could have gotten there today had it not been for the partisan speechthat the speaker gave on thefloor of theHouse, Minority Leader JohnBoehner (R-OH) said. Pelosis words,poisoned our conference,caused anumber of members that we thoughtwe could get, to go south, he said.

On the flip side, referring toRepublican reaction to Pelosis comments,Democrats criticizedRepublicans fornot supporting membersof their own party includingPresident Bush and U.S. Senator JohnMcCain. Thatwas a remarkable accusationby Republicans againstRepublicans. Because somebody hurttheir feelings,they decided to hurt thecountry, said Rep. Barney Frank (DMA),chairman of the House FinancialServicesCommittee.

Under the 110-page plan, taxpayerswould have been the first in line torecover. It also wouldhave calledforcurbs on the pay packages of top executiveswhose firms get help, and assurancesthat taxpayers wouldultimatelybe reimbursed by companies for anylosses.

Moreover, the government wouldhave helped struggling homeowners torenegotiate bad mortgages in aneffortto reduce the two million projectedforeclosures in the next year.Additionally, the plan would haveextended a provision to stop tax liabilityon mortgage foreclosures.

Struggling small community banksimpacted by the mortgage crisis wouldhave been allowed to deductlossesfrom investments in Fannie Mae andFreddie Mac stocks. Executiveswhose companies may havebenefitedwould not have received golden parachutes,and their pay packages wouldhave been limited. Inaddition, firmsthat gross more than $300 millionwould not have received a tax deductionon anycompensation for top executivesmaking more than $500,000.Golden parachutes for CEOs who arefired orwho have run a company intothe ground would have faced stiffpenalties.

Neither presidential candidate is likely to be affected by this defeat. SenatorMcCain has taken credit forhelping tobroker a deal even though he never satin on congressional negotiations and isnot a member ofthe Senate BankingCommittee.

Democratic Presidential nomineeBarack Obama declared victory onSunday when the legislationwasfinalizedbefore it went to the House for avote. He welcomed toughersupervisionof the rescue plan,aid tohomeownersfaced with foreclosure and theexecutive pay limits. They are identicalto the things Icalled for the day[Treasury Secretary Henry Paulson]released his package, Obama said.

Paulson was criticized for doing apoor job in selling the concept of theplan to the public. Many taxpayersdidnot understand how their jobs, houses,pensions and ability to obtain credit aretied into the currentfinancial crisis. Iwas not sold on the idea. It [the economicbailout plan] was never reallyexplained to thepublic and how theycame up with the number $700 billion,said Jonathan Humphreys, aUniversity ofChicago alum.

The talks lasted for a week, whichunfolded after Treasury SecretaryPaulson and Federal ReserveChairmanBen Bernanke went toCongress with blunt warnings that afull-blown economic meltdown wouldoccur iflawmakers did not act quickly.Disappointed by the bills defeat,President Bush spoke Tuesdaymorningfrom the White House and saidhewanted to, assure our citizens and citizensaround the worldthat this is notthe end of the legislativeprocess.

It matters little what path a bill takesto become law.What matters is that weget a law. Were at a criticalmoment inour economy. Were facing achoicebetween action and the real prospect ofeconomic hardshipfor millions ofAmericans. For thefinancial securityof many Americans, Congress mustact.

Dwayne T.Ervin contributed to thisstory.How the House members fromIllinois Voted:

*Congressman Bobby Rush (D-1) No

*Congressman Jesse L. Jackson Jr. (D-2) No

*Congressman Daniel Lipinksi (D-3)No

*Congressman Luis Gutierrez (D-4)Yes

*Congressman Rahm Emmanuel (D-5) Yes

*Congressman Peter Roskam (R-6)No

*Congressman Danny Davis (D-7) Yes

*Congressman Melissa Bean (D-8)Yes

*Congressman Jan Schakowsky (D-9)Yes

*Congressman Mark Kirk (R-10) Yes

*Congressman Jerry Weller (R-11)Did Not Vote