Shea-Porter: 'Taxpayers need a better bill'; Hodes: 'Flawed from the start'; Gregg: 'Severe ramifications'

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2 hours, 35 minutes ago

WASHINGTON, D.C. – U.S. Sen. Judd Gregg issued the following statement after the House rejected the market stabilization plan.

“Obviously this vote has severe ramifications as we’ve already seen a dramatic decline in the markets, which undoubtedly will have significant effects on Main Street and the everyday lives of Americans.

This effort to stabilize the markets is not just an exercise in political ideology, but a critical and responsible measure to stave off serious fiscal trouble.

"It is now time for both sides of the aisle, in both chambers of Congress, to recognize the need to act.

"We must work together and find a way to advance this necessary legislation so we can begin to restore confidence in our markets, repair our economy, and make sure that American families can feel assured that their savings are secure, and their ability to finance their homes, cars, and children’s education is possible.”

U.S. Rep. Paul Hodes, talking to New Hampshire reporters on a conference call this afternoon, said, “I expect that we’ll be back, as early as the middle of this week” to address the crisis.

“While I have no doubt that it is necessary to act to stabilize our financial markets and protect American taxpayers and rebuild our economy,” he said, “I could not vote for a plan which spends $700 billion of taxpayers money on a plan I considered flawed from the start,” and even as modified, “fails to protect New Hampshire taxpayers.”

The first-term Democrat said the plan “was top-down, trickle-down economics, which according to numbers of people whom I consulted -- academics, economists, people involved in Wall Street who had been involved in various administrations -- would not adequately address the critical underlying problems, which are the mortgage crisis, starting at the sub-prime and now going into prime loans and the credit crisis.

“At the core, I felt that a bottom-up approach that directly addressed the mortgage crisis and directly dealt with liquidity in the credit markets, and then other issues” would be a more effective approach “and have a much better chance at success,” Hodes said.

He said the plan contained only “after-the-fact oversight, which essentially meant the $350 billion would be gone before any oversight could be exercised.”

Hodes said the mechanisms for dealing with auctions and valuing the securities “seemed to me too indirect.”

Hodes said he wanted the plan to include a revision of the bankruptcy law to be sure that homeowners in foreclosure who had to file bankruptcy could “seek protection to work out their loans.

“While this plan said that (those lenders) would be encouraged to work out the loans, there was no real forum established for that to happen,” said Hodes.

Hodes said judicial review provisions in the bill were weak and “would not support seeking a remedy of law to stop something from going wrong.”

“I had spoken with the leadership and made it clear to them that I expected we should come back and get right to work on alternatives and come up with a bill we all agree on and more directly deal with the issues that face us,” Hodes said.

Hodes said the way the proposal was originally presented, which gave the U.S. Treasury “unfettered” discretion to spend $700 billion with no oversight, “created a very difficult atmosphere for the negotiators on this bill and for the rank-and-file in Congress, considering the proposal at its core and the modifications.”

He said the bill grew from three to 110 pages, but “at its core, I think there was great mistrust of this administration.”

He said the simple fact that the bill was dubbed a “Wall Street bailout” created “a difficult environment for it.”

Hodes cited “an enormous volume of communication from constituents,” and, “it was overwhelmingly against the plan.

“It’s my job to represent the interest of the people I represent in New Hampshire,” said Hodes. “That’s my first priority.”

Hodes said it was “a difficult vote because whether this plan passed or didn’t pass, there were risks.”

But he said he said he is confident that until a plan passes, “ the Treasury and the Federal Reserve, as they have done, have the capability, to act prudently and responsibly to stabilize financial markets as necessary, to inject liquidity where they see it may be necessary.”

He said that despite a short-term downturn in the stock market, “In the long term, we believe that rebuilding this country’s economy will be done and will be successful, that we will get through this crisis and that the long-term prospects for the country are very good.”

Hodes' 1st District Democratic colleague, U.S. Rep. Carol Shea-Porter, released the following statement this afternoon after voting against the Emergency Economic Stabilization Act:

“Our economy has been battered by eight years of a financial wild west on Wall Street. There was no oversight and no accountability. I thought it was a mistake for the Administration to ask Congress to vote on a $700 billion bill to bail out Wall Street with only a single week to consider the proposal and a single day to review it. The Administration asked Congress to give up its Constitutional power of the purse and hand over a blank check for $700 billion. Congress said no.

“While I believe it is essential to address our credit and liquidity crisis, I voted against the Bush Bailout. I could not support the bill because it did not address the fundamental problem in our economy that caused the crisis in our financial institutions.

“I voted against the bill because it gave the Secretary of the Treasury -- a political appointee -- unfettered control over the execution of the bailout program. If the bill had passed, the Secretary of the Treasury would have had absolute authority to decide which securities to buy, from whom to purchase, and how much to pay. The Secretary of the Treasury would have also had absolute authority to decide who he would hire to manage the assets he purchased.

“More than four hundred economists, including three Nobel Laureates, appealed to Congress to slow down and make sure we got this right. Congress took about 8 months to draft and pass the legislation establishing the Resolution Trust Corporation -- and this only involved about $100 billion of taxpayer money. Certainly, Congress needs more time than one week to invest $700 billion of taxpayer money in a bailout.

“American taxpayers need a better bill, a better plan, and better protection. That is why I voted to stay in Washington and continue working on this bill. That is why I voted against this bill.”

U.S. Sen. John Sununu has not yet commented on the vote.

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Nice job by Reps Hodes and Shea-Porter. While they are spouting broadminded ideology and searching for long range solutions the economy is gasping for relief. Look, $700B is a lot of money and one week is not a lot of time to approve such expenditure. But, with our economy dying in the emergency room they shouldn’t be shopping for a doctor. Where were they when CEO’s were robbing companies profits? Where were they when America’s working class achieved the dubious honor of zero savings and record debt? Where were they when the petroleum companies, who so graciously contribute soft money to political parties, announced record profits while their constituents scratched in their pockets deciding which coins would go to health care and which to gasoline. Could they not read the handwriting on the wall? And now they piously pretend to protect the mortgagees who should be held at least as culpable for this financial debacle as the mortgage companies who took advantage of them. Get hold of this capitalist principal: Wall Street is paved with the dollars of Main Street. Bailing out Wall Street is bailing out: every American citizen who has handled their money responsibly as well as some who haven’t; every family who saved in 401K’s for decades; every retired woman and man (like myself) who spent a lifetime saving and investing; every small manufacturing business who depends on the large orders that Wall Street giants provide; every minimum wage worker who’s paycheck depends on the health of the food chain / big box store / construction company they work for; every middle and upper class wage earner in a management position who can only stay employed if he/she has a workforce they are able to supervise; and, it is bailing out every unfortunate mortgage holder who hopes to wake up tomorrow morning and find that the company who provides their paycheck was able to secure the commercial paper needed to accomplish the difficult task of staying in business and making that payroll. Wall Street keeps American wage earners in jobs and keeps its retired citizens out of job. We’re in the ER and we need the cure now. Not after months of study and partisan politics. The financial blood being shed is that of all American classes and at every station in their life. Our Reps are allowing America to die on the gurney while they are searching the Yellow Pages for a better looking physician.

- John F, Belmont, NH

You should all realize that the Democratic caucus in Congress voted 2-1 in favor of the bailout (notwithstanding our two congressmen.) The Republican caucus voted aginst the bailout by 2-1. As a Democrat and a prudent person I am relieved to see our representatives were on the right side of this issue. Ironically, the Republicans and our representatives will be the ones that are hurt politically by doing the right thing. My advice to all of you is to buy buy buy right now. These crashes always recover their value. As George Bailey said in "It's a Wonerful Life": "Old man Potter is buying while you're all selling in a panic." Be smart. America is strong. We will be fine. And a better bill will come out of this.

- Bob, Manchester

I have been unemployed for 6 months...I've heard of recent cases where hundreds of people are applying for a single entry level job...I think the failure of the bailout bill to pass can only make things worse as it begins to effect the economy...I'm afraid things are going to get worse before I am able to find a job...I am only one person but I can't help but think there are others who are unemployed thinking the same thing...I'm afraid and feel helpless as I continue to look for a job...

- Barry Nestor, Milford

I anyone has looked at their 401K in the last 3 weeks and see a 30 % drop in value maybe Congress would have some urgency. Everything government touches hurts the taxpayer because they continue to tax us to death. 1 trillion in stock value was lost today which is more than the bailout. Congress basically sits on their hands and does nothing until there is a crisis. The energy crisis must be over as I have heard nothing about it for quite awhile. The people in Congress don't have to pay social security taxes and they get a pension when they are done--what me worry.

- Mike C, Deerfield

The problem is the Community Reinvestment Act and the Clinton-recommended removal of the down payment requirement. Giving loans to people who couldn't pay is stupid. A first-grader knows that. Wish Congress was composed of first graders rather than the idiots there now.

Less government is the only solution.

- Danny, Manchester

Oh, please, Mr Hodes..."the Bush Bailout?" I was led to believe that this was a bipartisan plan that until you and Ms Shea-Porter went to the floor this afternoon was best for America. If this bill was so flawed, why weren't you screamin g about it yesterday afternoon, last night, and this morning?

Mr Hodes, you and your colleague took the gutless route, so why not just admit it. I hope voters will hold you both responsible for this failure to lead. You are and continue to be an embarrassment.

- Joe, Bow

I agree... except the cause of the crisis is not what she states. If we controlled Freddie and Fannie 3 years ago we would be in a better economic footing today. I seem to recall a certain NH senator who championed this issue!

The housing lending practice liberalized over the last 20 years brought us no-money down, interest only and no documentation mortgages. Thanks mainly to our "friends" south of us - Franks and Dodds.

- Ken, Bedford

Well, can you identify whay you think the fundamental problem is ? You said there is a fundamental problem but you didn't say what it is, and I'm dying to know what you think this problem is.

Also, I could read a lot more of what you say without grimmacing if you didn't plaster you articles with phrases like "the Bush this and that", and blame others while deflecting blame from your glorious capital D friends. But whatever your reasons, its nice to see this fail, if only because people were trying to ram it through before anyone knew what was really in it or before anyone knew what it would actually do.

- Mike Duggins, Londonderry

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