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House opposition remains strong ahead of Friday vote
By Kevin G. Hall
and Dave Montgomery
McClatchy Newspapers
Published on Thursday, Oct 02, 2008
WASHINGTON: The Senate approved a massive $700 billion rescue plan for the nation's tattered finance system Wednesday night, but only after tacking on another $110 billion in tax breaks to lure votes from both parties.
A strong bipartisan majority rallied behind the controversial Wall Street bailout package, passing it by 74-25. Ohio's senators voted in the majority.
The vote sends the measure to the House of Representatives, where lawmakers rejected the original version on Monday 228-205. A new House vote is expected Friday, and many lawmakers in both parties there remain opposed to it.
President Bush, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke have warned repeatedly that failure to pass the legislation would lead vital credit markets to seize up, forcing employers to lay off employees, plunging the economy into recession and perhaps even another Great Depression.
Senators of both parties,
including Democratic presidential nominee Barack Obama of Illinois and Republican presidential nominee John McCain of Arizona, said that threat made it imperative for Congress to pass the financial-rescue package.
''Inaction is not an option,'' Senate Majority Leader Harry Reid of Nevada said. ''This is — I repeat — a crisis. . . . We've got to get this done.''
Senate Republican Leader Mitch McConnell of Kentucky agreed.
''The question is not how we got here, but how we get out,'' McConnell said.
Not all senators went along.
''Action is clearly needed to return stability to our financial markets, but most importantly, effective, sound action is needed. To fix the markets, we must deliver a market-based solution, not a government bailout,'' said Sen. Elizabeth Dole, R-N.C.
Many lawmakers voiced disdain for the extra tax breaks the Senate added to the financial-rescue package. They ranged from a one-year fix to prevent the alternative-minimum tax from hitting more taxpayers to extending the research credit for business to allowing rural utilities to issue tax-exempt bonds for use of renewable energy.
Also included were more obscure terms extending tax breaks for motor-sports racing tracks, makers of wooden arrows for children and the rum excise tax for Puerto Rico and the Virgin Islands.
Incentives criticized
The tax breaks added to the Senate bill would cost the Treasury an estimated $110 billion over 10 years, according to Congress' Joint Committee on Taxation.
''It's garbage,'' said Rep. Devin Nunes, R-Calif. ''They're trying to put more decorations on the Christmas tree, but the problem is the Christmas tree.''
''The bailout legislation that the Senate is sending back to the House is a fraternal twin to the one I voted against on Monday — meet the new bill, same as the old bill,'' said Rep. Joe Barton, R-Texas, who led efforts to kill the House bill. ''I'm kind of an old-fashioned guy, and I think we ought to pay for what we do as a government, but instead we're talking about adding $1.5 trillion to our national debt and forcing our children to pay the cost.''
Dole echoed that sentiment.
''Because of unrelated spending additions, this bill now comes at a cost of over $800 billion, and it is still a government takeover of our economy with no protection for taxpayers. It raises the debt ceiling to $11.3 trillion. It bails out foreign investors before American homeowners struggling to pay their mortgages. And it does nothing to address the root cause of this mess, the housing crisis,'' Dole said.
And some Senate Democrats also felt the bill didn't do enough to help struggling homeowners stay in their homes.
''Until we stabilize the housing markets and until we stem the record number of foreclosures, our market is simply not going to improve,'' said Sen. Bill Nelson, D-Fla.
Some top House Democrats were also upset that the Senate's tax breaks were mostly for business.
''If they're looking to make the rescue package better for families on Main Street, there are many House-passed provisions that would provide immediate relief, such as an extension of unemployment benefits, money for food stamps and help for families struggling to afford heating oil with winter around the corner,'' said Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee, in an angry statement.
Similar to original
Like the legislation the House rejected Monday, the Senate bill essentially would create a $700 billion federal program to buy bad assets from banks and other financial firms at a steep discount.
The hope is that the government would recoup much or all of that money by selling the assets later, once stability returns to the financial world.
The measure also includes strong terms to ensure legislative oversight of the Treasury-run bailout and would give the government an ownership stake in firms that get bailed out. That would give taxpayers a share of any profits once the firms return to profitability.
The Senate version would make one significant change to the earlier financial-rescue package. It would more than double the insurance that the Federal Deposit Insurance Corp. provides on customer deposits to $250,000 from the current $100,000. The higher amount would apply for one year.
The FDIC would also be granted unlimited temporary powers to borrow without limit from the Treasury to keep the banking system solvent.
Economists think that the FDIC measures, if also approved by the House, would provide a boost of confidence for small community banks.
''I think many small banks feel like they're losing the competition in keeping deposits . . . and are fearful they won't have the deposits to [allow them to] make the much-needed loans in their communities to businesses,'' said Mark Zandi, chief economist for Moody's Economy.com. ''It will give them a more level playing field with the mutual funds and bigger banks, because people won't be nervous about putting their money into smaller banks.''
WASHINGTON: The Senate approved a massive $700 billion rescue plan for the nation's tattered finance system Wednesday night, but only after tacking on another $110 billion in tax breaks to lure votes from both parties.
Get the full article here.
Comments
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akron, oh
Posted 04:43 AM, 10/02/2008
Oh what the heck - afterall, what is another 110 billion to buy a few votes. shameful.
Akron, Oh
Posted 05:37 AM, 10/02/2008
tax relief for businesses nothing for the tax payers this should turn the tables yeah right throw it in the garbage let them all fall we will get through it.
Barberton, OH
Posted 05:49 AM, 10/02/2008
And just who is paying for this in the end? WE are! Our taxes will skyrocket while we pay for the mistakes that other people have caused.
Posted 06:09 AM, 10/02/2008
We already had one depression of the economy known as the Great Depression. Maybe a vote can be taken on the next title such as Great Depression II or Greater Depession or Dumb Depression. Yeah, Dumb Depression, that fits. Because if we didn't see this one coming we ain't gonna see the next one coming either cause the dumb only get dumber.
Tallmadge, OH
Posted 07:21 AM, 10/02/2008
And some of you thought John McCain was against PORK? He's right in there fighting for a place at the trough to get his butt elected. Well John, it's not going to work for you. This morning Obama is up by 6 points and leads the electoral college 338-185 with OH, FL, VA, NV, and CO now in his pocket.
Unfortunately, after 8 years of Bush's hands off approach for business, and an economy in ruins, he leaves this mess for Obama to cleanup when he takes office in January 20th.
Tallmadge, OH
Posted 07:25 AM, 10/02/2008
The bailout has done John McCain in. he's now behind in the polls by 6 points at least and has lost OH, VA, and FL to Obama. Obama now leads 338-185 in electroral state count. Obama in 2008 !!!
Posted 09:07 AM, 10/02/2008
Obama should be 20 points ahead in Ohio. We have the most job loss and I can't believe those who support him and hurting financially are supporting this man. S.A.D. Sad And Dumb.
Bizarrebertucky, OH
Posted 09:09 AM, 10/02/2008
More business tax cuts,just what we needed.
Canton, OH
Posted 10:02 AM, 10/02/2008
Why can't big businesses be penalized for getting themselves in this mess. You know like we pay late fees on credit cards and oh my, if we should bounce a check the fees the banks charge are hugh, even if it is an honest mistake on our part, they sure don'twant to hear it. Why don't big businesses have to pay a price? Sounds like they might have bounced a few checks of their own. Why is it always the little guy? And we are giving tax breaks to motor-sport racing tracks, wooden arrows for children, and gin?
Why doesn't all sport owners have to pay tax on income, gee maybe that would help get us out of debt. I guarantee that if an individual owes the govenment money, social security for working to hard, or income tax we get penalized and have to pay the govenment. Why can't we get the breaks? We will spend our money and help the economy or maybe just maybe we will save some of it. Does the govenment know what the word "saving" means. I agree we have to bail out but why tax exemptions to sports and gin makers, hello they make a lot more money then people who work hard for a living.
I guess law makers like Nascar races and to drink gin and tonic while their kids are at home shooting the babysitter with wooden arrows. So the moral of the story is to live fast, drink away your problems and teach our children to fight so they can go to war. Good job guys.
Posted 10:14 AM, 10/02/2008
What in the world does tax breaks on Rum coming from P.R have anything to do with this? I say vote this garbage down...something of this whole bailout stinks badly.
Posted 10:53 AM, 10/02/2008
It bails out foreign investors before American homeowners struggling to pay their mortgages.
south of Akron, NO
Posted 12:03 PM, 10/02/2008
well, folks. It's now the official beginning of the end.
Sterling, Oh
Posted 12:08 PM, 10/02/2008
Senate adding $110 billion to the $40 trillion social security and the $9.3 trillion debt defying demands of Natural Law (what Mother Nature, God, or Whatever Power decreed to be the reality of the real world), God, democracy, capitalism, the US Constitution, and free, fair, and affordable commerce.
Demanding every corporation, farmer, business, outsourcer sweatshop, and nonprofit, tax-exempt, organization and Church markets the cost in the wholesale and retail price of his or her product and service. Of every workers, consumers, and taxpayers living (including pension and health care). Enabling parents to love, nurse, nurture, discipline, protect, and provide, for every child (job) they conceive and fund schools, infrastructure, national security, government services, and etc.; with money derived from wages or independent business profit. Created!
Reality demands Americas grandchildren pay interest with this debt until they are 18 years old. Then pay this debt with the $6.85 per hour labor wage. There is no reason to believe America’s grandchildren’s children that go to bed hungry can afford life and pay this debt with money derived from wages or independent business profit in a hundred million years.
Posted 02:32 PM, 10/02/2008
WHERE THE HECK IS MY TAX BREAK?? I'M A SINGLE WHITE MALE NO KIDS. I CAN'T EVEN SAVE FOR MY RETIREMENT BECAUSE I'M PAYING FOR ALL THOSE WELFARE BABYS OUT THERE, AND THE FREELOADERS THAT THINK A PAYCHECK COMES TO THEIR MAILBOX ONCE A MONTH. I HAVE BEEN FORTUNATE TO HAVE A DECENT JOB WITH DECENT PAY, BUT IT SEEMS ANYMORE WHAT I MAKE OUR GOVERNMENT THINKS THEY HAVE THE RIGHT TO STEAL MY HARD WORKED EARNINGS AND DO WHAT THEY PLEASE WITH IT. I'M FED UP AND IF THEY TRY TO TAX ME MORE, I GUESS I'LL JUST HAVE TO START SELLING DRUGS, STEAL OR WHAT EVER TO KEEP MY STANDARD OF LIVING AND SAVE FOR MY RETIREMENT. THE HECK WITH THIS CRISIS, THEY BROUGHT IT ON THEIRSELF AND WHY SHOULD WE, AND THE FUTURE GENERATION PAY? LET THEM LOOSE THEIR MONEY AND SEE WHAT IT'S LIKE TO STRUGGLE SOME. I'M JUST PLAIN FED UP WITH THE STUPID ,RICH, GREEDY THAT USE THEIR MONEY POWER TO OVERPOWER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Posted 05:30 PM, 10/02/2008
Where is all the good conservative opinion when we need it. I bet if the conservatives had run the government six of the last seven years we wouldn't have all this mess. Oh wait, maybe they did. Never mind.
Posted 08:20 PM, 10/02/2008
Hmmmm,,,,SEEMS LIKE THE 911 TERROISTS MAY HAVE SUCEEDED AFTER ALL,,THEY KNEW TO CRIPPLE THE FINACIAL STRUCTURE OF THE GREEDY AMERICANS WAS THE BEST WAY
