Fingerpointing continues on bailout failure

This article was last updated on April 16, 2022

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Members of Congress traded more recriminations Tuesday over the stunning House vote that killed a $700 billion financial system, while insisting there’s still time to get an acceptable deal.

But Rep. Marsha Blackburn, a Tennessee Republican who voted against it, said she still believes Republicans and Democrats can come together on a bill, perhaps by this weekend. “We’re committed to finding a resolution to this, and I think by week’s end we will have a solution to this problem,” she said on CBS’s “The Early Show.”

Democratic Rep. James Moran of Virginia retorted that he believes House members should have supported the plan on Monday instead of voting it down.

When asked about scores of Democrats who also voted no, Moran replied that the Democratic caucus did not want to “own this bill.”

Rejection of the legislation on a 228-205 vote caused the largest selloff on Wall Street since the day after the Sept. 11, 2001 terror attacks.

Moran said that he believed there was an understanding by both House Speaker Nancy Pelosi, D-Calif., and House Minority Leader John Boehner, R-Ohio., that the two party conferences could muster at least 110 votes apiece — enough to put the bill over the top.

Blackburn said that lawmakers are still concerned about the level of public obligation — or taxpayer commitment — to the bailout and said “that is why we have worked diligently. … This is something we can’t leave on the table and leave Washington. This is something that affects every man and woman, every family in this country.”

Moran blamed Republicans for the bill’s failure — it lost on a 228-205 vote — saying the Democrats “were willing to hold the vote open” so that people could change their minds. “I don’t know where the (Republican) leadership was,” he said.

Rep. Tom Price, R-Ga., who voted against the bailout, said he thinks “it’s important to get this vote right, not necessarily to get it quick.”

“We are principled in the fact that we believe we ought to stick to American principles, we ought to protect the taxpayer, we need to make sure that private money, private equity can get involved and have Wall Street bail out Wall Street, not on the backs of the taxpayers,” Price said on NBC’s “Today” show.

“And we need to make certain that there’s an exit strategy,” he said, “so that there’s not a huge, massive bureaucracy that grows up around this. I’m positive and hopeful that we’ll be able to get to this by the end of the week.”

Two other lawmakers — Reps. Marcy Kaptur, D-Ohio, and Marilyn Musgrave, R-Colo., — called on the Bush administration to get the Securities and Exchange Commission to change accounting rules to loosen up the credit crunch.

“We have to look for something that will make the markets function in the way that they should, not reward bad behavior,” Kaptur said on ABC’s “Good Morning America.”

She also had a message for Wall Street: “Calm down. Don’t panic. Don’t be led by fear.”

Musgrave said the House would come together later this week to find a bill that members could pass.

“We know that inaction is not the answer. We’re coming back to work on Thursday,” she said. “We’re trying to come up with the very best solution for this country and the responsibility we feel is to pass a good bill.”

Both lawmakers said the SEC should change accounting rules to ease the credit crunch, which Kaptur said “is really at the heart of some of the anxiety of the market.”

Specifically, they want the commission to change existing “mark-to-market” rules that require companies to value their holdings at what similar securities have recently sold for — in some cases pennies on the dollar, when the assets get marked down. That hurts the companies’ balance sheets, which could cause some to fail.

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