Bailout package a slam-dunk? Far from it, state’s bipartisan congressional delegation says

Testifying Tuesday before the Senate Banking Committee were, from left, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, SEC Chairman Chris Cox and Federal Housing Finance Agency Director James Lockhart III.

REUTERS/Kevin Lamarque
Testifying Tuesday before the Senate Banking Committee were, from left, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, SEC Chairman Chris Cox and Federal Housing Finance Agency Director James Lockhart III.

Forget the pleas of the Bush administration and some congressional leaders. The proposed $700 billion bailout package for the nation’s staggering financial firms is not going to get either a quick or clean ride through the U.S. Capitol.

A telephone poll of the Minnesota congressional delegation makes it clear that the president and his financial advisers face trouble on the right and on the left in quickly passing the package put together by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.

Even 3rd District Rep. Jim Ramstad, who is leaving Congress at the end of the session, is offering resistance.

“The Bush administration’s $700 billion bailout plan for Wall Street imposes great risk to taxpayers and no guarantee of success,” he said in a statement. “Congress should not give the Treasury Secretary a blank check from the American taxpayers with no provisions for accountability, transparency or disclosure.”

This from a congressman who is known for thoughtful moderation. This, from a congressman who no longer has to be hindered by political calculations in his decision-making.

“Until we know more about the plan and its consequences to taxpayers and Main Street, I am prepared to oppose the Administration’s bailout plan,” Ramstad said.

The middle isn’t so comfortable with rushing this package through, either.

To date, not a single member of the Minnesota delegation has stood up and said that the bailout package must be passed as is. (MinnPost checked in with the entire delegation but was unable to reach 7th District Rep. Collin Peterson.)

And, according to staffers of the Minnesota delegation, there’s no demand from constituents urging quick action. Phones in the Washington offices of the state’s senators and House members, Republicans and Democrats, are ringing constantly. Most of those calls are from angry people who don’t see a need “to bail out the fat cats.”

McCollum calls for Bush to address Congress, nation
The concerns of members of Congress — and constituent anger and mistrust — has led Rep. Betty McCollum to insist that President Bush needs to accept personal responsibility for selling the proposal his administration says is so urgently needed.

On the floor of the House this morning and later in a conversation with MinnPost, McCollum insisted that President Bush, who only a few days ago was saying the economy was fundamentally sound, must rally Congress and the public by giving a televised speech to a joint session.

“I’m asking the president to come and say, ‘I was wrong (about the health of the economy). The numbers are showing that. But we’re smart enough — we can get through this.’ ”

Isn’t that pointing a political finger at President Bush?

“Not at all,” said McCollum. “This is a historical moment. He needs to bring the country together. His office comes with the responsibility to lead in a situation like this. We were all together on 9-11. That was a crisis. This is a crisis. It is the president’s job to bring everyone together.”

Has the president shown any inclination to make such a speech?

“I haven’t seen his schedule,” McCollum said.

No matter how he goes about his business, the president’s job of selling a bailout package will not be easy.

Troubles on the right
Start with the president’s troubles on the right.

Sixth District Rep. Michele Bachmann joined with other Republicans who are having trouble swallowing bailout legislation at a press conference late last week.

“Our heads are spinning with bailout mania,” she said in the conference. “What’s next? Starbucks? Too big to fail? We don’t know where this is all going to end.”

In her blog dated Monday, Bachmann said that she has signed a letter to Bush, penned by a fellow Republican, Joe Barton of Texas.

The letter asks the president to add drilling for oil in Arctic National Wildlife Refuge (ANWR) to any bailout package.

“As we work to strengthen our markets through an assistance package,” the letter said, “we should also offset some of the liability, without raising taxes. This package should contain some means to pay at least part of the cost of rescuing these financial giants, and do it without asking the taxpayers to shoulder a burden which is, after all, not their responsibility. We therefore encourage you to include legislative language that would open up ANWR to leasing, along with the Outer Continental Shelf.”

Ironically, in a statement released by her office today, Bachmann blames Democrats for “adding pet projects to the bill.”

“Democrat leadership is already posturing to add its own pet project to the bailout,” she said in the statement. “Congress is preparing to rush this legislation through — partly out of panic, partly out of politics — without exercising its own fiduciary responsibilities to the American people.”

Left not happy either
But that “rush” isn’t coming from the left.

Rep. Keith Ellison said he’s not voting “yes” for any package that doesn’t include oversight and stimulants for the economy as a whole.

“I recognize there’s a crisis,” said Ellison. “I hear the gloom and doom. But if they’re not willing to give us what we need, then you must not really have a crisis. If the system is going to topple, which is what his (Bush’s) advisers are saying, then you won’t mind oversight, you won’t might taxpayer equity, you won’t mind taking away executive compensation.”

Even in the middle, where people such as Sen. Amy Klobuchar live, there’s no rush to say “yes” to this package.

“The guiding principle of our efforts should be that Main Street should not have to suffer the mistakes of Wall Street,” Klobuchar said in a statement. “Secretary Paulson’s initial plan is a starting point.”

According to longtime observers of the Washington scene, nothing is normal this week.

Normal would only be hectic. This is, after all, supposed to be the last week of congressional work until after the elections. There are pet bills that are supposed to be acted on.

Rep. Jim Oberstar, for example, has high hopes that the Great Lakes Compact, a bill calling for the cleanup of the lakes, will survive a repeat visit to the House floor.

Congress must also pass continuing legislation to fund government operations.

But everything is in the shadow of the bailout.

So there’s an effort to go about doing business as usual.

But nothing is usual.

“There were some people in my office this morning,” said Ellison. “They had important environmental issues to talk to me about, but I admit, it was hard to pay attention. I’m frazzled. We’re all frazzled.”

The drumbeat of phone calls from constituents is way above typical in terms of both passion and numbers.

There’s earnestness in conversations among pols, who know they must act on a package that is hard to sell back home.

There’s a bipartisan similarity to the official statements flowing from Minnesota congressional offices.

Of all the members of the delegation, 2nd District Republican John Kline seems most inclined to accept the White House package and move on. He issued this succinct statement on Friday: “The American economy is facing grave challenges that threaten disastrous consequences for American workers, their jobs, their bank accounts and their retirement security. The federal government has a responsibility to put partisanship aside and work together to get our economy moving in the right direction.”

He’s had no public utterances on the subject since.

Says Republican Sen. Norm Coleman: “This isn’t a time for partisan politics and finger-pointing. It’s time for action. We must put taxpayers first, and not only insist on accountability from Wall Street executives who shoulder a great deal of responsibility for this crisis but ensure we avoid such catastrophic failures in the future.”

From Rep. Tim Walz, a Democrat: “… The American people want to know that whatever steps Congress takes, we will restore responsibility and accountability to Wall Street. They want to be reassured that no one will get rich off of taxpayer-funded bailouts. And most importantly, they want to know how and why this is happening and how this bailout will help the middle-class families who are really hurting right now.”

Adds Bachmann: “As we consider this proposal, we should ensure that shareholders do not make a dime of profit from taxpayer money. We should ensure that government spending is cut or frozen to pay for the added taxpayer burden. We should, above all, ensure that we take whatever means are necessary to make this bailout the last.”

From Oberstar, a Democrat: “I am committed to working with the administration to make this proposal stronger. We need to make certain that none of the bailout money is used to pay for golden parachutes for the Wall Street CEOs who got us into this mess.”

(It should be noted that, in his statement, Oberstar did do a little finger-pointing. “The package Congress will consider this week,” he said, “could drive our national debt to more than $11 trillion, more than double the $5 trillion national debt the nation held when President Bush took office eight years ago. This is the legacy of the failed policy of deregulation. …”)

It’s almost certain that Congress, which was expected to get its work done by Friday, will be working through the weekend.

Ultimate passage predicted

In the end, a bailout bill will be passed, McCollum predicted, because no matter how frustrated, members of the Congress must do something.

“We have to do something, because we can’t just sit here and watch people’s pensions dry up, their home values continue to fall,” said McCollum. “Right now, we’re in the emergency room, and when you’re in the emergency room, everyone must work together.”

But passage of the bailout won’t be easy or clean and, even if a collapse of the financial markets is averted, the story of this crisis won’t be over.

McCollum sits on a congressional oversight committee, which she said is scheduled to meet in October. That’s when finger-pointing will begin in earnest. There may even be questions raised about whether crimes were committed, she said.

“We have to figure out what happened and what’s needed to make sure it doesn’t happen again,” McCollum said.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.

Comments (4)

  1. Submitted by Don Gulseth on 09/23/2008 - 05:10 pm.

    The current result, I believe has to be called Trickle Down Debt: the result of a trickle down economy.

  2. Submitted by True Lee on 09/23/2008 - 06:24 pm.

    Where are the CEO’s of these companies? Why are they not testifying in front of Congress right now!! Why are Paulson and Bernancke speaking for CEO’s?! Wall Street should be forced to beg in front of the people as this would demonstrate personal accountability.

    I’m sick and tired of the lack of hard hitting questions from the media. They should be asking why the CEO’s are missing from testifying in front of Congress!!

  3. Submitted by Reggie McGurt on 09/24/2008 - 11:26 am.

    I heard Bachmann on MPR this morning. She actually blamed the current crisis on too much interference from government. So while virtually every economist, politician and every Joe Schmoe who knows anything has pointed the finger at a lack of meaningful oversight and regulation, Bachmann is somehow blaming Democrats.

    Heck, even John “I’m not a regulator” McCain is calling for more oversight. He went so far as to call for the head of the SEC to step down.

  4. Submitted by Bernice Vetsch on 09/24/2008 - 02:58 pm.

    I don’t care why Michelle Bachmann votes against this bailout as long as she casts a big fat No.

    Paulson, Bernanke and Bush have chicken-littled this $700 billion bailout fund (totally controlled by Paulson: no congressional oversight, no governmental auditing) as our ONLY alternative to a world-wide meltdown. There are other alternatives on the table, among them having the government purchase equity in the troubled companies, thus giving them capital with which to write new/good loans AND the responsibility to deal with their own bad loans as they can, over time.

    Paulson said yesterday (9/23): “This is all about the American taxpayer. That’s all we care about.”

    Tell us another one, Mr. Bush appointee Wall-Street guy.

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