AZ congressional delegation votes unanimously against bailout
By Jeremy Duda, email@example.com
Democratic and Republican members of Arizona's Congressional delegation found common ground on Sept. 29, voting unanimously against a $700 billion bailout package that aimed to boost the nation's failing financial industry.
All eight of Arizona's U.S. representatives - four Democrats and four Republicans - voted against the Emergency Economic Stabilization Act of 2008, which failed 228-205, despite having the support of both parties' House leadership, President Bush and Treasury Secretary Henry Paulson.
Arizona's representatives cited a number of reasons for rejecting the unprecedented financial bailout, which would have represented the largest federal intervention in the economy since President Franklin Delano Roosevelt's New Deal of the 1930s. Some worried about the lack of protection for taxpayers and homeowners, while others said the government simply doesn't have enough money to inject that much cash into Wall Street.
Republican Rep. Jeff Flake, well known as an opponent of wasteful spending, said the government does not have enough money in its treasury to pay for the proposed bailout, and cannot borrow enough to keep financial markets from finding their "natural bottom."
"The crisis we now face is the result of government intervention in the market," Flake said. "Let's vote down this bill and, instead, pass legislation consistent with (free market) principles."
Flake touted an alternative bill proposed by House Republicans. That proposal, he said, would provide relief to financial services companies through privately funded mortgage premiums. Other provisions of the proposal include a voluntary suspension of dividend payments, a repatriation window for profits earned overseas by American companies, and financial industry reforms such as limits on federal backing for high-risk loans.
Republican Rep. John Shadegg said he remained open-minded and was prepared to vote for an imperfect solution to the financial crisis, but said the proposed bill only encouraged more irresponsible conduct on the part of the failing financial firms by negating the effects of their poor decisions.
"If Secretary Paulson and Democrat leadership had negotiated in good faith, taking into account the major reforms that needed to be made, a financial bailout package would easily have been passed," Shadegg said. "My colleagues and I could not support a measure that would increase the involvement of the government in the financial services market without implementing safeguards against further damage."
The Democratic House leadership under Speaker Nancy Pelosi may have backed the bill, with the most notable opposition coming from Republicans, but not all House Democrats were on board. The bill had the support of 140 Democrats and 65 Republicans, with 133 Republicans and 95 Democrats voting against.
"I am not in disagreement that there is a financial crisis in our country," said Democratic Rep. Raul Grijalva. "I am in disagreement of a proposal that is rushed and, more importantly, does not advocate equally for Main Street and strong protections for working families."
Grijalva said the bill lacked oversight and had no guarantee that taxpayers would be paid back by the Wall Street firms that would receive money under the bailout. He urged the reversal of "bad policies" that helped cause the crisis, such as the 2005 bankruptcy reform bill.
Democratic Rep. Harry Mitchell also called for regulatory reform, and members of Congress were not allotted enough time to properly debate the bill.
"The (Bush) Administration and congressional leadership introduced this bill late yesterday and demanded a vote less than 24 hours later," Mitchell said in a statement on Monday. "There was not time for any kind of thoughtful deliberation or public comment. Considering $700 billion is at stake, I believe taxpayers deserve better."
The bill sought to bolster markets that have fallen dramatically, primarily as a result of the ongoing mortgage crisis. Companies with large investments backed by sub-prime mortgages saw their stock value plummet over the past week, and some of the United States' largest financial institutions such as Fannie Mae, Freddie Mac, Lehman Brothers, AIG and Washington Mutual have gone under, been bought out or been taken over by the government.
The failure of the bill comes after a week of intense negotiations in Washington, DC. Congressional leaders are hoping to bring a new bill up for a vote later this week, though there are no immediate plans to do so.