Alaska delegation splits on federal bailout
Published Sunday, September 28, 2008
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Stumble It!WASHINGTON — Sens. Ted Stevens and Lisa Murkowski remained confident late Saturday that congressional leaders and the White House would strike a compromise on a $700 billion plan to rescue the faltering U.S. financial sector before capital markets open Monday.
Lawmakers remained on the Hill over the weekend to hammer out details of a bailout package, despite opposition from many House Republicans who said the federal government shouldn’t be using taxpayer dollars to intervene in the financial markets.
Despite reservations, Stevens and Murkowski said the federal government must act quickly to shore up confidence in the financial system to avoid a sharp downturn in the already ailing economy.
“If Congress doesn’t act, the markets will go into meltdown,” Stevens warned.
Rep. Don Young was among those who strongly disapproved of the idea of using taxpayer dollars to rescue at-risk financial institutions.
He said he remains unconvinced that government intervention is necessary or would even be successful.
“I haven’t seen the details yet, but it’s very doubtful that I will vote for this,” he said.
The plan being pushed by the Bush administration would authorize Treasury Secretary Henry Paulson to buy up to $700 billion in troubled home loans and other mortgage-related assets.
Paulson told Congress the plan would free up the assets of banks to continue lending, averting a credit squeeze that could seize up the economy if left unattended.
The rescue plan, however, is widely unpopular with Americans, who see it as a get-out-of-jail-free card for unscrupulous lenders while middle-class homeowners struggle with their mortgages.
The delegation has been swamped this past week with angry calls from constituents opposed to the bailout proposal. Murkowski said she’s started noticing a subtle shift in the tone of the calls, though.
“In the past couple of days, I’m sensing that it’s sinking into folks that this may have a wider impact than they initially thought,” she said. “It may have started on Wall Street, but it has gone from Wall Street to Main Street to my street. It’s getting very local.”
Murkowski and Stevens said their concern is that not acting on the financial crisis could place further stress on the markets, triggering a credit squeeze that would spark job losses and drive down home values.
“I don’t like it, but what is the alternative?” Stevens said.
Murkowski recently talked to the chief executives of several banks in the state who all expressed the same concern that the credit crunch, which is making it difficult for Lower 48 residents to get car loans and mortgages, could eventually reach Alaska.
“As blue as the skies may be in Alaska, they recognize that there are storm clouds out there, and we all need to be concerned about them,” Murkowski said.
Stevens said there was “no question” the growing financial crisis would impact the ability of Alaskans to obtain affordable credit. He said it was also putting at risk the state’s small mortgage industry, which depends on being able to sell its loans to larger national investors.
“The decline in housing prices is taking away from the equity of everyone who has a home now,” Stevens said. “Many people are going to be in the position of owning a house that is worth less than what they borrowed.”
Young remained unconvinced Saturday that government action would improve the situation.
“This is a slippery slope, and I don’t want to be part of setting this great nation on the road to socialism,” he said.
Young said he preferred to take a wait-and-see attitude and not rush to enact sweeping legislation that could have a profound effect on the economy for years to come.
“I may be wrong,” he said. “The whole thing may come crashing down on Monday, and they may say they told me so.”
David Cuddy, the Anchorage developer and former banker who ran an unsuccessful bid to unseat Stevens in the Republican primary for the Senate this year, said the bailout could turn out to be a good deal for taxpayers if the government can pick up the bad debt at a deep discount.
Paying face value for troubled home loans as currently proposed in the administration’s plan isn’t such a good deal, Cuddy said.
But Cuddy said the root of the financial crisis is not only the bursting housing bubble but also Congress’ addiction to deficit spending and the $10 trillion national debt.
“Putting $700 billion into some kind of bailout and thinking that will solve the problem is shortsighted,” he said. “If we don’t deal with this budget deficit and the national debt, there’s going to be a day of reckoning.”
Murkowski said she, too, was skeptical of Congress meddling with the economy, but that was before investment bank Bear Stearns faltered, mortgage giants Fannie Mae and Freddie Mac were placed under federal control and the massive insurance company AIG had to be rescued with an $85 billion federal loan guarantee.
“What has happened over a 10-day period should make everyone concerned,” she said.
Not to act would “ignore the reality of what we’re seeing, not only on Wall Street, but also all over the country,” Murkowski said.
All three members of the state’s Republican delegation stressed that a final deal had not yet been struck nor had they seen details of the proposal being considered.
“Something is necessary, but no one has shown me a plan that is satisfactory to meet our needs yet,” Stevens said.
Community Discussion
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Buying bad mortgages at face value?! NO WAY! As Cuddy said, buying up this bad debt at a deep discount is the only answer. It will appreciate and be worthwhile in the long run for the American taxpayer. No other deal is acceptable. George Bush's administration makes me sick - their plan is just one more plot to make the rich richer and leave the average American in dire straits with no decent jobs and a debt beyond your wildest nightmares. I'm disgusted that Bush and Cheney haven't been impeached and imprisoned yet. All of their enablers need to go along with them, Democrats and Republicans.
Isn't it strange that when capitalism is broken it takes socialism to fix it?
Simple math:
500 billion = almost $5000 from every man, woman, and child in the United States, given so that the companies who screwed us in the first place can keep doing it.
What we should do is:
1. Throw a party while we watch em die.
2. Then, we should throw Ted and Murky out of office for even considering voting in favor of this.
3. Lastly, we should all consider the source of this problem in the first place, and act accordingly this November:
http://www.youtube.com/watch?v=H5tZc8oH-...
You reap what you sow.
Simply considering that Ted and Lisa both have far more brains and intellect than Don, I am inclined to side with Ted and Lisa on this complex issue.
I, like everyone else, am very angry that the government, following Republican deregulation policies got our country into this mess. I don't WANT to spend a dime bailing out the greedy blankety-blanks who triggered the collapse. However I see the NEED to do a bailout to avoid an even worse catastrophe.
The Democrats have the right idea to keep the greedy ones from profiting, putting in oversight and other things that have expanded the bailout from a 3 page document that gave the treasury unfettered control of 700 billion to a document of more than 90 pages with many controls and restrictions that make the bailout better for the poor and middle class and not some give away program for the rich that the original 3 page document threatened to be.
Who ever votes for this stupid idea will NOT get my vote.
Everyone knew in 2004 that the economy had "recovered" by the shameful backing of 1 Trillion Dollars of future debt on our kids.
Day after day there were newspaper stories of ordinary folks buying, buying, buying, property they were unable to afford. And spending on their credit cards like drunks. The rich and poor did it based upon what credit the finance industry said one could get away with -not what one could afford.
Even the kooks on talk radio exposed the stupidity of it; yet they continued to cheer on the Bush agenda. Most folks were too stupid to realize the inconsistency.
How many times has Bush said the "economy is sound". OMG McCain kept up the drumbeat until just 13 days ago. Now nationally recognized airhead Sarah Palin chanted right along. "We're winning". The ekonmy iz veary strong." "I'm just ill about theeze things."
Now the neo-cons and talk radio want to ride the "no savior" cause. They are breaking with the Party Nominees, Bush, Cheney, and why -They are the very ones who got us here.
And for those of you who live off the pensions, insurance monies, construction loans and credit cards at your shops and businesses beware of a real slowdown.
The debt was spent at your stores. The bailout is especially for you, and
be flexible because the gravy train is over.
AKpatriot, I agree the original document was hastily put together and full of flaws, however, saying the democrats have the right ideas shows very little research on your part. Watch this video
http://www.youtube.com/watch?v=H5tZc8oH-...
THEN tell me how well the democrats have handled themselves.
I dont feel like the republicans have any answers either. As I stated in my previous post, Ted and Murky need tossed ASAP. Truth is, the people of the US need to chuck all the Reps and Dems out of office and start voting for intellect instead of charisma. Partisan politics has got to go NOW. Unless we can do that, our fate is sealed.
I agree with Young...let's wait and see.
I don't believe in the "Fear Mongering" going on.
I'm not a "stock market" person either, aside, of course from the PFD. So, I'm biased.
Wall Street, sub-prime mortgages, etc...It's all gambling. Let the gamblers, including the Federal Govt. take the fall and accept responsibility for their action, or, inaction as the case may be.
Our Senators say citizens are angry? No, Americans are furious.
Anyone who thinks they'll serve another term in office who votes yes, shows how very out of touch they are. Oh, I almost forgot. Our govt. apparently has that covered with the voter fraud being implemented and perfected by ACORN. Part of this package gives that organization 20% of the money...absurd!
What I don't like about the bailout is the lack of "specifics". I'd like names please.
I'm an intelligent grownup. Which Wall Street firms? What banks?
Again, the "We're gonna fail!!" fear mongering doesn't cut it for me.
PioneerAK......just where did you read about this alleged investigation against ABC and NBC? Don't you think if there was such an investigation that there would be something in the news or on the internet about it? Hmmmm? That's right.....there is NOTHING out there about it! Before you post such slanderous allegations you had better check your facts in the future! You are the victim of someone's idea of a sick joke!
This is a repost from yesterday.......I am waiting for an answer!
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