5 Area Congressmen Vote Against Bailout

WASHINGTON -- If partisan politics helped kill yesterday's $700 billion bailout proposal, you couldn't tell it from how the Kentucky and Southern Indiana delegations voted.

Three Democrats -- Rep. John Yarmuth, D-3rd; Rep. Ben Chandler, D-6th; and Rep. Baron Hill, D-9th -- broke ranks with their party's leadership, voting against the $700 billion bailout of the financial industry. They were joined by two Republicans -- Rep. Ed Whitfield, R-1st; and Rep. Geoff Davis, R-4th -- who also refused to go with the bill that President Bush backed.

Only two area congressmen -- Rep. Ron Lewis, R-2nd; and Rep. Hal Rogers, R-5th -- voted for the plan that the Bush administration said was crucial to rescue the nation's financial sector.

Those who opposed the House bill said they did so for a variety of reasons: The plan helped Wall Street more than average citizens, it was a naked power grab, it exposed taxpayers to too much risk. And some said they aren't convinced the bailout is the way to fix the situation.

"To come up here and say out of the blue that there's a crisis and it needs to be solved by the very next day, and to have it go on for a week, and not have a crisis develop and the sky fall -- the president has no credibility in my view whatsoever," said Chandler.

Supporters said they thought the proposal was the best that could be hoped for on short notice and was needed to calm financial markets and free up frozen credit.

"As mad as I am at how we got here, we are here, and the sad reality is our country lies at an economic precipice," Rogers said in a statement. "Our banks face a serious credit crunch, limiting our people's ability to borrow money for everyday needs. Everything from buying groceries or supplies, to buying a car or home, from sending your kids to college, or saving up for your retirement -- all could be put in serious jeopardy.

"With this threat, it was either vote for a plan I didn't like, or do nothing. This is not a gamble I was willing to take," Rogers said.

Yarmuth of Louisville, who voted against the plan, said he had never before heard so many fellow lawmakers say, as they did in the last week, "If this vote costs me my job, so be it."

"Without question, people understood the gravity of this situation and the magnitude of the problem, and nobody put politics above what they considered their sincere concern for what was the best course of action," he said.

Yarmuth said the plan gave too much unchecked power to the secretary of the treasury. And it was too deferential to Wall Street, rather than the general public, he said.

There also was no requirement in the plan that banks help homeowners with mortgages, nor was there a fix to the law that bars bankruptcy court judges from changing mortgage terms, Yarmuth said.

But Lewis said the fixes made by party leaders convinced him to vote for the plan.

"While far from being an ideal bill, I believe some modifications made over the weekend improved the treasury's plan," Lewis said in a statement.

Hill of Indiana said Congress was being rushed.

"There hasn't been enough time to evaluate the impacts this legislation would have if enacted, or to consider alternatives," he said in a statement. "Congress deserves time to weigh the benefits and the potential pitfalls of borrowing this money."

Hill said there should be a congressional investigation of the crisis before a bill is voted on.

"There is no consensus on this proposal," he said. "I have talked with everyone from bankers to neighbors, and there is no one position that stands out amongst them all."

Whitfield said he opposed the plan for a variety of reasons, including questions about the scope of the problem that the plan is supposed to address.

He said that according to the Federal Deposit Insurance Corp. (FDIC), only 1.6 percent of banks are in financial trouble.

Whitfield agreed with others that the plan gives too much power to the treasury secretary, creates a complex bureaucracy, fails to do enough to limit CEO compensation for companies the plan would help, and is so expensive it would weaken the nation's financial condition.

He said there are less drastic steps that can be taken, including changing how potential losses and the value of financial instruments like mortgage-backed securities are calculated. The Federal Reserve Board could make more cash available, too, Whitfield said.

"These steps alone would stop the bleeding and give us time to solve this crisis in a more deliberate time frame," he said.

Davis said the plan "did not adequately protect taxpayers in Kentucky and across the nation."

"It is not the taxpayers' responsibility to pay for mistakes made on Wall Street," he said in a statement.

Lawmakers on both sides of the issue said Congress needs to keep trying to address the nation's financial difficulties.

"There is a way to save it," Yarmuth said of the rescue plan. "I am confident that the government will do something. ... I think the government does need to act."