Begich, Berkowitz voice concerns over federal bailout
Published Wednesday, October 1, 2008
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Stumble It!WASHINGTON — While lawmakers on Capitol Hill prepared to try once again to pass a massive bailout package to shore up the faltering economy, Alaska Democrats running for Congress expressed disappointment that the proposed rescue plan focused on Wall Street instead of Main Street.
The House of Representatives on Monday rejected a $700 billion plan designed to restore confidence in the U.S. financial system. Some 133 Republicans, including Rep. Don Young, and 95 Democrats opposed the plan.
Young said he voted against the package because it did not enjoy wide support among Alaskans. He said he might change his position if public opinion shifted in favor of the bailout, though he remains opposed to the idea of the federal Treasury buying troubled assets with taxpayer money.
The rejection was a major defeat for the Bush administration, which had lobbied aggressively for the bailout and warned of a major downturn in the economy if it failed.
As if on cue, the stock market plummeted 778 points and lost $1 trillion in value on news that the House rejected the rescue plan. The market rebounded almost 500 points on Tuesday.
Anchorage Democrat Ethan Berkowitz, former minority leader of the state House, criticized House lawmakers for not acting quickly to assist the ailing economy.
“I’m not going to armchair quarterback what should be done, but clearly doing nothing is the worst of all options,” he said.
Berkowitz complained about what he called the “top-down solution” being offered by the White House and congressional leaders. What’s needed, he said, is a plan that protects the assets of regular Americans instead of Wall Street.
Berkowitz, who is hoping to unseat Young, a Republican, in the November elections, said he agrees with Treasury Secretary Henry Paulson that the government needs to act fast or the nation could face a credit crunch that would be devastating to consumers and small businesses.
“You don’t cut and run from the biggest financial crisis to face the nation since the Great Depression,” he said of the House’s failure to approve the bailout.
However, he said any rescue plan should include assistance for homeowners facing foreclosure, tougher limits on executive compensation and greater oversight.
Berkowitz said the root cause of the financial crisis that must be addressed first is the roughly 8,000 mortgages that are slipping into default daily.
“If your neighbor’s house is on fire, you help them put it out,” he said.
Anchorage Mayor Mark Begich, a Democrat who’s challenging Sen. Ted Stevens in November, said the White House proposal was missing measures benefiting everyday people.
“They must focus on an economic stimulus package for both the long-term and the short-term,” he said.
Begich blamed President Bush and what he called a lack of leadership in Congress for the economic situation.
“Eight years of the Bush administration and its policies have driven us to where we are, there’s no doubt about that,” he said.
However, Begich said, lawmakers need to set aside partisan differences and come up with a plan that restores confidence in the economy and protects taxpayers.
Among the proposals Begich supports is an expansion of FDIC insurance for private deposits up to $250,000 that was added by the Senate on Tuesday.
“That protects a lot of seniors who have invested in savings accounts because that’s all they trust,” Begich said. “That would be a simple thing to do and so far they haven’t done it.”
Begich said he also wants to make sure 401K and other retirement savings accounts are protected as well as find a way to get banks to refinance mortgages so more people can stay in their homes.
The Senate has vowed to approve a revised rescue package today, though it remains unclear how much latitude lawmakers have to make changes in order to win over the 12 votes needed for passage in the House. Any change could endanger Democrats’ support for the bill.
Sens. Stevens and Lisa Murkowski, both Republicans, have said the bailout is necessary to keep the economy from going off the rails. While Stevens and Murkowski harbor reservations about putting taxpayers on the hook for the bailout, they both say the alternative would be worse.
The Senate is set to meet today and members worked over the Jewish New Year yesterday to try to craft a compromise package that could pass both chambers.
The House goes back into session at noon on Thursday, though it was unclear when members might take up the bailout plan.
Community Discussion
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The same president who said that it was critical that we go to war with Iraq, and who has screwed up everything he has touched, from the response to hurricane Katrina, to the federal debt, to a non-existent energy policy, now proclaims, quite suddenly, that we must give away nearly one trillion dollars???
The suddenness of the announcement along with great proclamations of a dire crisis looming without a bailout has propelled a "no" vote in Congress to a self fulfilling prophesy of economic calamity.
The Alaska Permanent Fund has fallen, (on Sep 29), to as little as 33.4 billion dollars. That is one consequence of yet another instance of Bush's irresponsibility.
Lowering the federal funds rate would have been a better, first approach to the current situation. A trillion dollar bail-out, and another trillion dollars in US debt will only weaken the US dollar, and cause crude oil prices to climb- further hurting "main street".
(Another over used cliché). Maintaining the massive US debt ensures that we send, literally, hundreds of billions of dollars to overseas investors.
Gee, just how damaging is that to our economy?
The Wall Street Meltdown was predicted in 1558...
http://upload.wikimedia.org/wikipedia/co...
..and it was predicted in 2006 by Peter Schiff
http://www.youtube.com/results?search_qu...
Don't bank robbers say "Hurry up and just put the money in the bag"??
http://faculty.chicagogsb.edu/john.cochr...
Including "the recent housing bill gave the government nearly $1 trillion in authority to purchase mortgages," in essence, we're throwing nearly $2 trillion at the problem, if a "bailout" is approved.
Don't know about FY09, but looks like the federal budget for 2007 was about 2.7 trillion (http://en.wikipedia.org/wiki/Image:U.S._...), so are we throwing nearly as much as the total spending of the federal government at this problem?
I'll admit I'm ignorant. I want to be educated. Maybe I'm seeing it all wrong...
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I am not liking what Berkowitz had to say about the issue, and I doubt it will strengthen his support for office.
This is a pickle, no doubt, but I think a bailout such as this is just another nail in the coffin.
God help us, these two do not have a clue regarding the economy expect pouting old party lines. Has either one heard of the credit market which is currently frozen. The credit market is the one that will impact Americans more than Wall Street.
What are we hearing from Berkowitz here...is he saying Barney Frank should resign and what are we hearing from Begich here...that Chris Dodd and his friend Chuck Schumer, who are the real villians here need to find other work..??..These guys are the real crooks in this mess and to think about adding two more zero's to the mess is just not an option Alaskan's should or will support. President Bush is not running for re-election. We will have new leadership in the White house with President McCain and Vice President Palin. Help is on the way.
Congress should move all the 401Ks to the banks so the Wall Street Crooks, can't fill their pockets.> http://www.rense.com/general27/stt.htm
Good to see some politicians reacting thoughtfully, not just relying on polls to decide how to vote.
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