Posted by In an effort to revive the stalled financial rescue package, Senate leaders are trying to jump-start the process by tweaking the bill in hopes of winning the 12 House votes needed to cover Monday’s shortfall.
But no matter how it’s altered, the package still faces substantial hurdles when the House takes it up again.
Despite the shock of Monday’s stock market plunge after the bill failed, House opposition reflects deep political fault lines that, for more than a year, have undercut effective measures to alleviate the housing recession and credit crisis that led to Wall Street’s meltdown.
Opposition to the $700 billion plan has come from the far reaches on both sides of the aisle. Conservative Republicans oppose the idea of making taxpayers cover Wall Street’s bad bets, while liberal Democrats argued that more help is needed for struggling homeowners on Main Street. With the election fast approaching, it remains to be seen whether a new bill can be crafted that will bring enough of those “no” votes back to the center to win approval.
“That may mean you have to add something to bring on more Republicans and something to help bring on more Democrats,” said Rep. Chris Van Hollen, D-Md. “The problem is, if you just add stuff to the right, you may lose votes on the other side. That’s why this is such a delicate balance.”
Some of the sticking points that sank the package Monday likely won’t change in the Senate version. For example, many of those who voted “no” simply balked at the staggering $700 billion size of the rescue plan.
Rep. John Culberson, R-Texas, was among those voting no because the package carried “just an unacceptable price tag.”
“This vote, in my mind, was a vote between bankrupting my daughter and our kids or bankrupting a few Wall Street banks who made bad decisions,” he said.
Opponents like Culberson also balked at the idea of extending help to foreign bankers, even though globalization of the credit markets was a key factor in their rapid unwinding. With U.S. and foreign banks so interdependent, strictly limiting the aid to U.S. banks could seriously undermine the rescue effort.
Many House Republicans who voted against the rescue also said they had a hard time accepting the basic idea of having the government solve what they see as a market problem.
“I am bothered that Secretary Paulson offered an immediate government solution rather than taking the time to explore effective private sector and market-based solutions,” said Rep. Steve Buyer, R-Ind. “The Paulson plan was an unprecedented infusion of power into the private financial sector.”
House members who voted no also cited voter outrage over what many see as the financial excesses that led to the current disarray.
“We are now in the Gold Age of thieves,” said Rep. Pete Visclosky, D-Ind. “And where I come from we put thieves in jail, we don’t bail them out.”
