OC Register: Senate passed rescue bill
Washington, Oct 1, 2008 - The Senate overwhelming approved a souped-up version of the financial crisis bill the House defeated Monday. It's up to House lawmakers to decide Friday whether they will accept what their colleagues across the Capitol have passed.
The 74-25 vote was more than the two-thirds majority the bill required. And the importance of the measure was underscored by the presence of three senators on the presidential trail – John McCain, Barack Obama and Joe Biden. They all voted yes. In a rare move, Majority Leader Harry Reid asked members to stand at their desks and vote, a procedure reserved for only the most crucial Senate actions.
The new bill includes the basic architecture of the $700 billion rescue plan the House defeated. But it's been sweetened with a number of tax breaks and other items, pieces congressional leaders hope will help mean they can send a bill to President Bush to sign by week's end.
"I think if we really do care about the livelihoods of our constituents, there is only one vote, and it's yes,'' Sen. Dianne Feinstein, D-Calif., said on the Senate floor. "We're now hearing from people who say they want to buy a home and they can't get a mortgage. …This is what is beginning to happen.''
Feinstein said she voted yes despite the fact that of the 91,000 calls she has received from constituents on this question, only 5,000 supported the measure.
"People don't understand this package,'' Feinstein said. "It isn't a bailout. It's purchasing strategic assets,'' She said it will bring liquidity to the market and unfreeze credit.
Sen. Barbara Boxer, D-Calif., who also voted yes, said on the Senate floor that "I believe, and I hope, this package will do what is needed to restore trust in the short term. For the long term, we need regulatory reform and change that makes job-producing investments in America, not in foreign lands.''
The measure includes a one-year increase in the Federal Deposit Insurance Corp. cap from $100,000 to $250,000. There are tax breaks for business and the middle class. There's a one-year fix to the Alternative Minimum Tax rate. There's a number of tax-related measures including research and development tax credits and credits and other incentives for renewable energy sources. And this bill incorporates a popular measure that would ensure that health insurance companies treat coverage of mental illness the same as physical illnesses.
Senate Minority Leader Mitch McConnell praised the chamber for the bipartisan way it handled the bill.
"This is the kind of vote we were sent here by the people to cast,'' said McConnell, who called the measure a "package we will believe will address the Main Street problems facing America as a result of the credit crunch.''
The bill still faces an uncertain path in the House where predictions of its passage are by no means assured, given that Monday's defeat shocked lawmakers and Capitol Hill watchers alike.
Orange County's House delegation split right down the middle on the bill, and there's no indication yet that any of them are apt to change their votes.
Red. Ed Royce voted no, mainly because the series of reforms he believes are necessary to avoid such a catastrophe again are not included in the package. And so far he hasn't been leaned on and hasn't seen anything that will lead him to change his vote.
"I'm waiting for the Senate bill,'' said Royce, R-Fullerton. "But if those reforms are not in there, no steps will have been taken to keep this from happening again and under those circumstances I'm very skeptical about going down this road without correcting the problem.''
And Rep. Dana Rohrabacher said that while he hasn't closed the door on approving what comes over from the Senate, it would have to meet some high thresholds for him to vote yes.
"I have not ruled out voting for something if it sounds like they've taken care of the fundamental problems with the bill,'' said Rohrabacher, R-Huntington Beach.
Rohrabacher said he believes the $700 billion request must be scaled down and there needs to be a full debate about what other options are possible. And he sad he's "adamant that this money not be used to bail out foreigners.''
GOP officials are hoping to find 12 more yes votes in their caucus to reverse the 228-205 defeat they suffered on Monday. Despite reports that GOP officials had begun leaning on members who voted no, neither Royce nor Rohrabacher said they have been lobbied by their leaders.
Rep. Loretta Sanchez, who also voted no on Monday, could not be reached today to comment on whether she's open to changing her vote.
One Orange County financial academic said the Senate did the right thing but isn't a panacea.
"The bailout, if it passes both houses, will save us from a depression, but it definitely won't save us from a recession,'' said Peter Navarro, UC Irvine professor of economics and public policy. "The problem is that consumers have experienced a huge financial shock and they won't be spending a lot of money. Consumption is two-thirds of our GDP."
But one local businessman wasn't impressed with what lawmakers did.
"I'm being told by politicians and people on TV there's no credit there, so how come I'm getting bothered by telemarketers begging me to take their credit?,'' said John Houwink, Fullerton owners of a heating, air conditioning and refrigeration contracting firm. "I'm against this bailout, because I'm not scared enough. This is a scam to get all our taxpayers money."
Register staff writer John Gittelsohn contributed to this report.
Original Article: OC Register