The long awaited verdict has hit the airwaves. The $700 billion bailout was rejected. Democrats are scrambling around trying to blame Republicans for the failure of the bill. But that was largely the wishes of the constituents back home. So much for the longstanding theory that this was a Republican bailout of big businesses. Even though Democrats seemed to endorse it for the most part, the final vote was 228-205. The Democrats had 235 votes overall, while the Republicans had only 198. One person didn't vote. I don't know who that was. If Nancy
Pelosi had been able to rally the troops. Once again she has failed to mobilize the party for a united front. If she had done what a majority leader is supposed to do. We might be looking at another outcome here. Now we can hear why the people in congress did or didn't give it their support.
Vote details
Ayes:
Democrat - 140
Republican - 65
Noes:
Democrat - 95
Republican - 133
NV - 1
Greater Memphis delegation split on bailout vote
ReplyDeleteBy Bartholomew Sullivan (Contact), Memphis Commercial Appeal
Monday, September 29, 2008
Rep. Steve Cohen Discusses His Vote for the Financial Rescue Bill
WASHINGTON — Greater Memphis members of Congress John Tanner and Steve Cohen, D-Tenn., voted for the proposed $700 billion bailout of the financial industry today, while Travis W. Childers, D-Miss., and Marsha Blackburn, R-Tenn., voted against it.
The measure was defeated 205-228.
The 15-minute vote was held open for 37 minutes but few changed their vote and it was ruled down at 1:05 p.m. Memphis time. Ninety-five Democrats joined 133 Republicans to defeat the measure.
Blackburn's press spokesman, Claude Chafin, pointed out that Republican Presidential candidate John McCain on Sunday's broadcast of of ABC's "This Week" singled her out as one of a handful of congressmen "who stood up and got into these negotiations and became part of the solution."
Blackburn said early last week that emails were running 298-2 against the initial proposal.
Cohen asked constituents on his website and in an official newsletter that came out Sunday whether they were for the bailout. By the time of today's vote, 325 were against it and 195 were for it, according to the unscientific poll.
House Republicans Support a Plan That Would Insure Troubled Mortgages
ReplyDeleteBy EDMUND L. ANDREWS
Published: September 26, 2008
WASHINGTON — After temporarily derailing the Bush administration’s $700 billion proposal to bail out the financial system on Thursday, House Republicans pared back their goals on Friday and demanded that the plan rely at least partly on an industry-financed insurance program for troubled mortgages.
Issuing a vague declaration of “economic rescue principles” to limit the use of taxpayer money, the Republican lawmakers focused primarily on the insurance program.
The proposal would have banks and investment firms that own mortgages and mortgage-backed securities pay premiums for insurance that would guarantee them against losses if the mortgages default.
Supporters of the plan said it would restore confidence in mortgage-backed securities without putting taxpayer money at risk. “Instead of making the taxpayers pay, the securities holders would pay,” said Representative Paul Ryan, a Wisconsin Republican who helped create the plan.
That would be sharply different from the plan developed by Treasury Secretary Henry M. Paulson Jr., which would have the government buy up to $700 billion worth of currently unsalable mortgage-backed securities.
Treasury officials have argued that their plan would address the heart of the financial crisis, which is that banks and investment firms are holding vast quantities of securities that have little or no market value. By having the government buy up and hold those securities until the panic dies down, Mr. Paulson has been hoping to free the balance sheets of financial institutions, allow them to raise fresh capital from investors and start making loans again.
But Republican lawmakers said on Friday that they were not trying to scrap Mr. Paulson’s plan entirely. Instead, they said, they would simply try to insert an insurance program into the overall package.
“We don’t want to undermine the negotiations,” Mr. Ryan said. “We want to honor the spirit of the negotiations.”
That was a retreat from Thursday, when John A. Boehner of Ohio, the House Republican leader, told President Bush and Democratic Congressional leaders that most House Republicans would oppose the administration’s plan.
The idea of the insurance plan, championed by Representative Eric Cantor of Virginia, was to reduce uncertainty and restore confidence without actually using taxpayer money.
The federal government would guarantee the underlying mortgages in a mortgage-backed security, much as Fannie Mae and Freddie Mac have done for years and as the Federal Housing Administration does, as well.
In theory, the cost of that insurance would be borne by the companies that hold the mortgages or mortgage-backed securities.
Treasury officials had already told Republican lawmakers they had considered an insurance approach, but rejected it. The problem, from Mr. Paulson’s standpoint, was that insuring against mortgage defaults would do little to increase liquidity, or the amount of money available for making loans. By contrast, the Treasury plan would inject hundreds of billions of dollars in fresh, although borrowed, money into the marketplace.
But the insurance plan could pose other risks to taxpayers. The government would be insuring the riskiest and most default-prone mortgages made during the housing bubble, including loans that required no down payment and no income verification by the borrowers.
The allure of insuring mortgages, rather than buying them as Mr. Paulson would, is that the government would not have to put up any taxpayer money. But because the government would be guaranteeing nearly all mortgages in the country, since it already owns Fannie Mae and Freddie Mac, taxpayers could face big losses if losses from defaults turn out to be higher than expected.
Many House Republicans, including Mr. Ryan, had come up with a far more detailed rival plan earlier in the week that included Republican policy evergreens like new tax breaks and more flexible regulation as well as the insurance idea.
Some lawmakers wanted to at least temporarily eliminate taxes on capital gains and dividends, though senior Republicans knew they had no chance of getting that past Democratic leaders.
Members of the Republican Study Group, a group of conservative House Republicans, proposed lifting the mortgage market by letting companies reap retroactive tax rebates from their current losses. A company would be able to apply its losses this year against its profits from any of the last five years and get a rebate for taxes it had already paid.
But with lawmakers hoping to wrap up their work by Monday, Republicans dropped the idea as impractical because it would take too long for the Joint Committee on Taxation to estimate the measure’s cost.
On the regulatory front, some House Republicans championed the idea of relaxing what are known as mark-to-market rules that require investment firms to revise the value of their securities in line with changes in market prices of those securities.
Over the last year, Wall Street’s biggest investment banks have been forced to take huge write-downs on mortgage-related holdings, not because the securities were actually losing money but because the securities had become almost impossible to sell in the open market. For many securities, especially the arcane derivative securities known as “collateralized debt obligations,” there are virtually no buyers and no market prices.
“If you don’t have to sell the securities today, you shouldn’t have to mark it at today’s value,” said Peter Ferrara, a senior researcher at the Institute for Policy Innovation, a research group in Virginia with ties to many Republican lawmakers.
But Mr. Ryan said the issue was complicated. While critics of the current rules complained that they artificially understated a company’s financial position, other experts argue just as vehemently that marking to market is a crucial way of preventing companies from covering up bad investments.
In 2004 Democratic Representative Maxine Waters, Gregory Meeks, Barney Franks among other Democrats were very outspoken about Fannie and Freddie not needing oversight. They stated there is nothing wrong with Freddie and Fannie.
ReplyDeleteDecember 2004
Franklin Raines leaves his position as CEO for Fannie amist accounting irregularties. Franklin Raines is an Economic Advisor for Obama.
2005 McCain said:
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation
The main stream media and the Commercial Appeal will not report all the facts.
You have to do the research. The proof is out there.