[R-G] Bush Plan Down but Not Out
Anthony Fenton
fentona at shaw.ca
Wed Oct 1 16:46:05 MDT 2008
ECONOMY-US: Bush Plan Down but Not Out
By Adrianne Appel
http://www.ipsnews.net/news.asp?idnews=44082
BOSTON, Sep 30 (IPS) - Leading U.S. lawmakers and the cabinet of Pres.
George W. Bush met behind closed doors Tuesday to strategise a way to
win more votes for their 700-billion-dollar plan to bail out Wall
Street, a plan that met with stunning defeat in the U.S. House on
Monday.
The leaders announced late Tuesday that they had arranged a vote on
Wednesday in the Senate, even though Congress is officially on break.
The Senate is considered more likely to approve the plan, and if it
does, this will add pressure on the House to get on board.
"I am disappointed by the outcome, but I assure our citizens and
citizens around the world that this is not the end of the legislative
process," Bush said Tuesday morning.
Only 12 additional House votes are needed to pass the bill.
"The 12 people who switch will be the most powerful people in America
over the next few days. They will shape the compromise bill," Darrell
West, vice president and director of government studies at the
Brookings Institution, a Washington think tank, told IPS.
Grassroots protests are planned throughout cities in the U.S. on
Wednesday, calling for no bailout of Wall Street.
Meanwhile, economists continued to warn against the Bush plan, saying
an entirely new approach is needed to truly free up the credit
markets, the loans between big banks that are key to a fully
functioning global economy.
"At this point I cannot identify a single good reason to do the [Bush]
bailout," said Dean Baker, co-director of the Centre for Economic and
Policy Research.
"Much of the country's political and economic leadership has been
running around raising the prospect of the Great Depression and a
breakdown in the banking system," Baker said. "These stories are
absolutely not true," he added.
In the days before the vote, 400 economists signed onto a letter to
lawmakers, urging them not to approve the Bush plan, said Rep. Peter
DeFazio, who received the letter and voted against Bush's bill.
"If we don't get this right were going to be back looking for more
money and our credit will be exhausted," DeFazio said.
"They warned that it's a risky bet. It's a bet that shouldn't be
placed by taxpayers," DeFazio said.
Bush's multi-billion dollar plan went down in flames Monday in a
narrow defeat of 205 to 228 against, made possible by the defection of
a majority of members of his own party, the Republicans, along with
one-third of the Democrats.
"The problem was this legislation was very poor. The idea of bailing
out rich Wall Street institutions wins no friends," West said.
The Bush plan, crafted by Treasury Secretary Henry Paulson with input
from Republican and Democratic leaders, would give Paulson wide
latitude in spending700 billion dollars with little oversight. The
bill does not curb excessive CEO compensation or assist the million
people dealing with foreclosure of their homes.
Presidential candidates John McCain and Barack Obama called on their
colleagues to pass the bill. Many lawmakers, however, stood firm.
"Why is it that we can find a way to bail out Wall Street, but we
cannot help the people struggling on Main Street? People are losing
their jobs, their homes, and struggling without health care. No one
has come to their rescue, but yet overnight we are pressed to come to
the aid of Wall Street," Rep. John Lewis said before voting against
the bill.
U.S. citizens from coast to coast cried foul and flooded Congress with
phone calls and emails telling them to vote against the bailout.
Hundreds of lawmakers heard them.
"When I tell my constituents that a fellow named Paulson came and
asked for 700 billion dollars for the financial industry, they say,
'What about me? We understand the urgency of the moment, we also want
fairness," said Rep. Elijah Cummings of Baltimore, who voted against
the bill.
Adding to Monday's drama, the Dow Jones industrial average plunged 777
points, the largest single-day drop in history, and governments around
the world moved to stabilise their financial sectors. Regulators in
Belgium, the Netherlands and Luxembourg came to the aid of Fortis, a
Banking and insurance enterprise. Brazil's stock market dropped 9
percent after the U.S. House vote.
The U.S. Federal Reserve made hundreds of billions more available to
the world's central banks, the large banks that loan currency to each
other, trying to ease the credit crunch. U.S. markets rebounded Tuesday.
The prospect of a hasty Senate vote on Wednesday did not go over well
with Rep. Peter DeFazio, who is opposed to Bush's plan.
"We have to make sure the Senate doesn't ram this through," DeFazio
told reporters. He and other progressive Democrats will introduce
their own bill to aid the economy, they said.
DeFazio and a group of progressive Democrats want no part of the Bush
plan, and Tuesday announced that they had drafted their own bill aimed
at assisting stalled credit markets, boosting the troubled U.S.
housing market and helping homeowners.
"It shouldn't bee too hard to come to an agreement to deal with the
problem of lending between banks," DeFazio said.
"We need to start with a clean slate. I come from a district facing
the highest rates of foreclosure in [Maryland]. People are losing
their homes. We need to have a mechanism in this legislation for
helping those homeowners," said Rep. Donna Edwards.
(END/2008)
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