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How the Iowa delegation voted on the bailout

by: desmoinesdem

Mon Sep 29, 2008 at 15:58:10 PM CDT


I was pleasantly surprised to hear that the $700 billion bailout bill failed in Congress today on a truly bipartisan vote: 140 Democrats for, 95 against; 65 Republicans for, 133 against.

In the House, Bruce Braley, Tom Latham and Steve King voted no, while Dave Loebsack and Leonard Boswell voted yes.

The full statement from Braley's office is after the jump. I will update this post with full statements from Iowa's other members of Congress as they become available. The Des Moines Register has excerpts from each representative's statement here:

http://www.desmoinesregister.c...

Senator Tom Harkin spoke out against the bailout several days ago.

UPDATE: I encourage those of you who support this bailout to read these notes from a conference call Treasury had with about 800 Wall Street analysts. If you click the link you can even download a recording of the call and listen yourself. The notes at that site are plenty for me. All of the "concessions" the Democrats got were meaningless:

1. The tranching is a mere formality, and the Treasury boys as much as said so. They could take the $700 billion max as soon as the bill has passed,

2. However, they do not plan any action immediately, will wait a couple of weeks. They want to focus their efforts on stronger companies but also made noise about protecting the financial system. This, by the way, is the Japanese convoy system all over.
[...]

5. The exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes. More detail on that point, but I don't need more detail to get the drift of the gist.

Regarding that second point about Treasury planning to wait a couple of weeks before doing anything, I totally agree with this analysis:

Waiting a couple of weeks because no one has any idea when or where the next bomb will blow up. In other words, all their doomsday scenarios about Black Monday were B.S. They screamed the check had to be written by Monday, but now they're saying they actually have a few weeks before they need to cash it. Plus, this will allow them to "seek guidance" from GS, JPM, and other selfless public servants about where the money should be funneled.

Remember, a Treasury official admitted to Forbes last week that they made up the $700 billion number. There was no analysis supporting that number.

I think Jerome Armstrong is right on target:

It's almost as if, the administration thought this election through already, and decided that if they could bust the budget wide enough, then Democrats, incoming with 60 votes in the Senate, 250 in the House, and a President, would be able to do nothing but cut costs.  Try to spend anything in '09, and the Republicans would be re-born as fiscal deficit hawks running against the spendster libruls.

I don't pretend to know the solution here, other than taking the fiscal downer now, which is admittedly trite. I also have to wonder about the tact to 'own' this thing as well, making it a Democratic bill that takes on Bush, which has its own set of problems. Its become so poisoned that to let the Republicans off the hook would seem to be handing them a gift. At the end of the day, I am doubtful that this "no" sticks, and won't be at all surprised to see a dozen votes flip to pass this behemoth budget buster pass as is. We win it all, and are able to do nothing but raise taxes and cut spending.

Folks, this is a trap that will enrich a bunch of people while doing little to help the overall economy.

Final point: I totally disagree with Nate Silver, who said this about retiring members of Congress who voted for the bailout:

The congressmen who are retiring this year -- and who therefore can perhaps be described as the most neutral arbiters of the public good -- voted overwhelmingly for this measure.

Neutral arbiters of the public good?

A lot of retired members of Congress go work at lobbying firms, "consult" with investment banks or get paid to serve on corporate boards. I reject the premise that their support for the bailout means it was a good idea.

desmoinesdem :: How the Iowa delegation voted on the bailout
September 29, 2008

Contact:  Nicole Buseman, Press Secretary
nicole.buseman@mail.house.gov
(202) 225-2911 (office)
(202) 297-6725  (cell)

Braley Opposes $700 Billion Wall Street Bailout

Washington, DC - Rep. Bruce Braley (D-Iowa) released the following statement after voting against the $700 billion Wall Street bailout plan:

"I have no doubt that action must be taken to stabilize our financial markets, protect American taxpayers, and rebuild our economy.  As I carefully considered the plan before the House today, I made my decision with the best interest of  Iowa families in mind.  I cannot support a multi-billion dollar handout to Wall Street that fails to adequately protect the interests of Iowa taxpayers, and short-changes Iowa families.  

"Wall Street greed and lack of oversight by the Bush Administration caused the current problems in our financial markets.  Now  Iowa taxpayers are being asked to save these companies from their irresponsible choices.  Working families should not be forced to foot the bill for Wall Street's mistakes, without stronger language to protect their interests.  While putting taxpayers on the hook for nearly a trillion dollars, the bill provides insufficient protection against abuses by the Secretary, fails to guarantee a return on taxpayer dollars, and provides no direct help for middle class families.  This is the wrong approach.

"For far too long, this Administration has ignored the needs on  Iowa 's Main Streets, while preaching the gospel of "wealth-at-any-cost" on Wall Street.   Many families in Iowa were being squeezed by rising costs and natural disasters before this economic crisis, yet this bailout does little to help Iowa families make ends meet.  

"To help our economy grow, we should also be investing in the future of our country by rebuilding America's crumbling infrastructure and creating jobs that can't be outsourced overseas, like the 15,000 employees AIG has in China.  We should increase our investment in renewable energy, to create jobs at home and move our country away from foreign oil.  Devoting hundreds of billions of dollars to bail out Wall Street will limit our ability to make these critical investments.

"While I agree that we must take action on our economy, today's plan benefits Wall Street CEOs while leaving working families to fend for themselves.  This plan doesn't go far enough to help Iowans at risk of losing their homes, jobs or savings, nor does it provide the resources necessary to invest in the future.    Iowa 's working families and taxpayers deserve better."

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Once again I disagree (0.00 / 0)
This bailout plan is making strange bedfellows. Latham and King, who have each voted with Bush 90% of the time, choose this time to disagree with him. Harkin spoke out against the original plan, but I haven't heard anything about how he feels about the modified one.

One thing that I have not seen is anyone who is against the bill proposing a better solution. Creating "green jobs" and "investing in renewable energy", are good campaign slogans, but are not going to ease the credit crisis.

The stock market dropped more than 700 points after the bill failed.

I have to say that the person I am most proud of in Iowa right now is Dave Loebsack. As a junior congress person, he is taking a risk supporting an unpopular bill.


if you think it's unpopular now (0.00 / 0)
I think it would be more unpopular two or four years from now, when everyone would be able to see that it was an extremely expensive plan that did not fix the problem.

I agree with Newt Gingrich, who predicted that if Democrats pass this bailout, Republicans will make big gains in the 2010 elections by running against the bailout.

Let Congress come up with a bailout plan that doesn't transfer enormous wealth from the middle class to the wealthiest Americans (again).

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
I think you've got it wrong (4.00 / 1)
I'm afraid I just don't understand your analysis. The failure of leadership today is nothing to celebrate. The fact is that crisis is effecting real people, and if the market tumbles even further, like it did today, it will hit all of us. I have yet to hear any respectable economist or expert argue convincingly otherwise.

And as your own numbers make obvious, this was not a "bipartisan" failure. Congressional Republicans ducked the bill 2-1 to distance themselves from Bush. It was purely political. Nate Silver broke down the numbers at FiveThirtyEight.com:

Among 38 incumbent congressmen in races rated as "toss-up" or "lean" by Swing State Project, just 8 voted for the bailout as opposed to 30 against: a batting average of .211... Among 26 congressmen NOT running for re-election (almost all of whom are Republicans), 23 voted in favor of the bill, as opposed to 2 against and one abstaining.

This was an unpopular bill, for obvious reasons, where Republicans were looking for an easy dissent. Now that it failed, they - along with John McCain - have 777.68 points hung around their necks.


in my last two posts on the bailout proposal (0.00 / 0)
I linked to articles citing various respected economists who said this was a bad idea.

This bailout would not have solved the underlying problems. However, it would have crippled the next president with even more debt. Also, it would have made sure the buddies of Henry Paulson and Roger Altman didn't have to pay any price for their stupid business decisions.

If you would like Obama to accomplish any of his domestic policy goals (improving health care, transportation, environment, etc.), you probably don't want to see the federal government fork over $700 billion to Wall Street while getting nothing in return.

I want the wealthiest individuals and corporations, which have benefited from the failed economic policies of the Bush administration, to pay for any bailout. I do not want that to happen on the backs of ordinary Americans.

I call it a bipartisan rejection when nearly 100 Democrats voted no. Good for Braley and the others like him. And if Latham and King voted the right way for the wrong reasons, so be it.

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
Ordinary Americans (0.00 / 0)
will be hurt by this. Obama will not be able to accomplish any of his domestic policy if he can not tax the wealthiest Americans because they are no longer wealthy. Also if unemployment spikes, he won't be able to tax the middle class either--because they will decrease too.  

[ Parent ]
this bailout would not have fixed (0.00 / 0)
the unemployment problem.

Also, the wealthiest 1 percent will still be wealthy even if we raise taxes on them.

Rhonda Abrams' syndicated column in the Register today laid out a few simple programs that would encourage job creation by small businesses. They could create huge numbers of jobs and would cost a lot less than $700 billion.

The stock market has been overvalued, and I doubt that this bailout would have prevented it from sliding further in the coming six months to a year.

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
Its a different bill (4.00 / 1)
You linked to articles that objected to the original Paulson proposal, that Democratic and Republican leaders declared DOA last week. The bill that failed today was written by Chris Dodd. Many of the economists you cited, most notably Paul Krugman, now tentatively support the new bill. It included executive pay compensation, so CEOs won't profit, and taxpayer protection, basically guaranteeing that when these companies bounce back a big chunk of the returns will go back to the Federal government. Thus, it provides hope that Barack Obama will have some room to push his agenda, though it may take some more time and muscle. I'm betting if the stock market continues its nose-dive, and everyday banks start to crumble, Universal health care is gonna take a back seat for a while.

This bill is no more popular in those 95 Democratic districts than for the majority of Republicans. But the numbers clearly show the Republicans brought it down. Its been a bad sell, with Paulson, Bush, and Pelosi - God love her, she's not popular - as the public faces. But I have every reason to believe it was necessary. Like I said, today was a political failure.  


[ Parent ]
read the notes from the conference call (0.00 / 0)
Treasury officials had with Wall Street analysts.

The Dodd bill had some fig leaves in there, but they wouldn't have changed the overall picture.

The executive pay provisions would not have done what some Democrats were claiming.

Pelosi is a huge disappointment as a "leader." She bungled the whole energy bill/offshore drilling debate as well.

I'd advocate removing her if Steny Hoyer weren't even worse.

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
Many business journalists seem to back the bailout... (0.00 / 0)
Many of the the business journalists I saw on TV and heard on the radio this morning seemed to be for the bailout. They suggested that, just as with the Great Depression bailout, the government would recoup its costs in a few years when the economy recovers. Even if the bailout "didn't work", it would just mean that the government wouldn't see the return on investment for a longer time.

And after it failed, the consensus seemed to be that this will end up hurting the American people. More banks will fail, more people will lose their jobs, more homes will be foreclosed on, etc. Still, they thought that this isn't the end of the world--it just guarantees a recession or depression will happen.

Therefore, I suppose I reluctantly support the bailout. Any thoughts on these points?  


[ Parent ]
the same business journalists (0.00 / 0)
have been little more than cheerleaders for Wall Street for more than a decade.

These people didn't catch on to the accounting gimmicks that pumped up the value of so many firms in the 1990s.

They did not see this crisis coming either.

They never ask tough questions about the business practices of these big banks and firms.

One of my brothers is an investment adviser/money manager and not nearly as liberal a Democrat as I am. He thinks Paulson is the most dangerous man in America. If something has to be done, let the government nationalize these failing firms and then sell off the equity, as was done in Sweden. The taxpayers get something out of that deal, and we don't reward executives for their greed and stupidity.

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
Really terrific post, DMD. Nice job. (4.00 / 1)
I see you are taking fire in the comments.  In response, I think we should separate the issues:  are we having some kind of crisis?  Yes.  Economists from all corners of the Dismal Universe seem to agree on that.  If we aren't, it's certainly a good imitation.

Different question:  what should we do, if anything?  Far right conservatives, still besotted with their beloved and largely fictional free market, argue that doing nothing is desirable, and interference is socialism.  Most people in the rest of the spectrum disagree with that view and argue about what should be done.  There are lots of ideas out there.

Congress is designed to have hearings, then craft legislation, argue about it and vote.  In this case, the text hit the internet yesterday afternoon and they voted today.  This is a ridiculous way to go about it.  

The Democrats, (and the Republicans), should be suspicious of a three-page bill presented as an urgent emergency right before an election.  That the bill was drafted by the Bush Administration, and reportedly had been in the can for weeks awaiting the end of the congressional session, both are facts that do not inspire confidence.  When I read the bill, my immediate reaction was a letter to the editor about the unfettered grant of power to the Treasury Secretary.  Hello?  My ancestors fought in a revolution over this sort of thing.

The fallacy of the bill is that it was this or nothing.  I think that the Federal Reserve has tools to increase the quantity of credit in the system, and Congress can pass short-term measures while looking at longer ones more closely.  What would have happened if Congress had said:  here's 50 billion to tide you over while we talk about this?  

I saw the report of the conference call tonight, too, and my reaction was that once again Tom Harkin was right.  He has been around the track a few times, and he said we were being stampeded.  The commenters who say people are going to get hurt are right.  I am not happy about what I see in my modest investment account, and I know that things can get a lot worse.  But how do they know that the bill would have prevented that?  The available evidence is that it wouldn't.  I think it's time to get serious about passing legislation that is actually responsive to the problems we have.


My impression (0.00 / 0)
My impression was that by the time of the vote that most of the more outrageous provisions of the bill (lack of oversight, no foreclosure intervention, etc.) had pretty much been taken out through the intense debate and compromise that had been taking place over the course of the week.

I thought the form of the bill on Monday was far different and better than than the form of the bill that the administration initially floated.


[ Parent ]
fake compromises (0.00 / 0)
When Paulson is happy, Treasury is telling Wall Street it's good, and Bush is not threatening to veto, you know we didn't get enough concessions in there. Those were mostly window dressing.

I imagine some kind of bailout will pass. It will be too expensive and probably won't solve the problem. However, whatever its final form, it will probably be a bit better than the package that failed yesterday.

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
also (0.00 / 0)
I remember when the Clinton administration was trying to get NAFTA through. I was a reluctant supporter, because I believed their spin about how they got strong labor and environmental standards into the treaty. They were lying, just like (I suspect) they are lying now about accountability measures and other things in the bailout that will supposedly protect taxpayers.

Why Obama wants to cripple his own presidency is beyond me.

Invite other Iowa political junkies to join us at Bleeding Heartland.


[ Parent ]
I need more facts (0.00 / 0)
First of all, I appreciate the back and forth. What a community blog is good for. Unfortunately, I don't feel that you've provided enough evidence. The website you linked relies  on unsourced "notes" of a meeting that happened to be with Wall-Street evil-doers:

to have a group of interested parties get a privileged briefing by government officials on a matter of keen public interest flies in the face of what a democracy is supposed to be about

This may be so, but its more of a conspiracy theory than a reason to oppose the bill. These meetings happen in DC all the time, concerning almost every bill that will effect "interested parties." Its part of the government's job to explain its own intervention. Furthermore, the "notes" cited often contradict the original source of the site, the self described "tabloid" that originally live-blogged the phone-in. For example, according to the live blog, the Treasury officials explained that while Paulson could ask for the extra money at any time, he would need Congressional approval for it. With this much media attention and public dissent, extra-billion dollar approvals from Congress are not "mere formalities," as point #1 you cited above seemed to interpret.

In this new bill, as I understand it, the government will buy the risky assets at a much lower price than the original Paulson proposal. In other words, the public will get something out of it - I don't have to tell you nationalizing huge financial institutions isn't politically realistic as long as there is a Republican party.

Real oversight and accountability, including taxpayer protections, are not fig leafs - I grant you, executive pay caps are essentially lip service. Nothing in the liveblog that I saw discredits these real compromises.

Of course the compromises haven't changed the overall picture. The overall picture is to stop the market from bleeding to death - no one disputes that.

At the end of the day, I respect anyone who is skeptical of this bill on shear principle. In fact, I would love it if you could convince me that it isn't necessary. I just don't think you've made that case yet. I'd recommend taking a look at an email dissent written to Andrew Sullivan - a conservative - for his oposition to the bill.


[ Parent ]
Hey, If you're not pissed off yet (0.00 / 0)
Bailout Opposition (0.00 / 0)
I don't think that we should bail these corporations out because it would reward irresponsibility. These people got themselves into trouble. Let them figure out how to get themselves out without the usage of taxpayer money.

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