Colorado’s congressional delegation split along unusual lines Monday, voting 4-3 against a proposed $700 billion emergency plan to bail out the nation’s troubled financial institutions. The House of Representatives rejected the bill 228-205, sending markets into a panic and ending the day with the largest dollar loss in Wall Street history.
Democrats Mark Udall and John Salazar and Republicans Marilyn Musgrave and Doug Lamborn cast votes against the bill. Republican Tom Tancredo and Democrats Diana DeGette and Ed Perlmutter voted in favor of the rescue plan.
Across the country, lawmakers of both parties in tight races voted against the unpopular bailout. In Colorado, Udall is running against Republican Bob Schaffer for an open Senate seat and Musgrave faces a strong challenge from Democrat Betsy Markey in her bid for re-election. Both sounded populist notes and pointed to overwhelming opposition to the bailout from constituents.
“People are mad. People are upset,” Udall said Sunday on Meet the Press. “My calls are mixed between people who say no and people who say hell, no.”
Colorado supporters of the bailout can more easily weather the ire of voters: DeGette and Perlmutter face only token opposition on the ballot and Tancredo is retiring from Congress this year after a failed run for president. Still, all three described their vote as a principled choice between the lesser of evils and none cast their vote enthusiastically.
“Despite my hesitations, I supported this bill,” DeGette said in a statement, “not because I wanted to, not because it was the politically easy thing to do, but because it was the right thing to do.”
The other two Colorado votes against the bailout don’t face tough contests this fall, but both have good reason to heed their districts. Lamborn, who won renomination in August after a bruising three-way primary, rejected the bill on conservative economic principles, calling the measure’s failure a “victory for taxpayers.” Salazar, whose 3rd District splits evenly by party affiliation, decried the bill’s lack of protection for taxpayers and threw in with the majority of the Congressional Hispanic Caucus opposing the measure.
Lamborn and Musgrave are likely holdouts if the House reconsiders the bill later this week with adjustments demanded by opponents. In a statement released Monday, Lamborn endorsed an alternative that relies on tax cuts and other policies designed to ease private capital into constricted markets.
Because I do not support a government bailout of private institutions, I voted against this bill. It is an invasion of the free market, which I believe is the best way to sustain prosperity for our country.
“I agree that something should be done to restore confidence in our markets. That is why I support alternative legislation by the Republican Study Committee that will allow Congress to help Wall Street ’workout’ this crisis in a way that does not force the taxpayers to ’bailout’ Wall Street. I believe that voluntary private capital, not involuntary taxpayer capital, will best help our financial markets recover.”
Musgrave roundly rejected the notion of a taxpayer-funded bailout in a statement released at the end of last week:
“For years, Americans on Main Street have heard about the lavish excesses of Wall Street. We heard about their mansions, exotic cars and above all, record profits. Now the party is over and the same bankers are asking working families across the country to bear the consequences of their excess and greed. I refuse to burden families already struggling with soaring energy and food prices with bailing out investment banks that made bad decisions.”
Udall and Salazar both called for a better bill with stronger protection for taxpayers and more comprehensive fixes to the financial system. “It’s not acceptable to spend $700 billion to bail out the boat, with no assurances that we will ever fix the hole,” Udall said in a statement Monday. “A stronger version should be brought before the House,” he said.
“My first responsibility is to the people of Colorado and to our nation’s taxpayers. I take very seriously the warnings about how conditions in the credit markets could affect the overall economy. But, the cost of this bailout was too high and the return far too uncertain for the American families who were being asked to bear the burden.
Salazar also laid out a roadmap to improve shortcomings in the bill and win his support in a statement released to the Grand Junction Sentinel on Monday afternoon:
Unfortunately, the bill before the House today was not acceptable to me. Rather than including a mandatory way to repay the taxpayer, the bill provides only discretionary authority to a future Treasury Secretary. The bill is also deficient in that it provides no relief to homeowners who desperately want to remain in their homes but need direct assistance.
“Congress must act, but it must not rush to judgment as it has in this case. Rather than adopting this bill, Congress should remain in Washington as long as it takes to craft legislation that restores confidence in the markets and helps Main Street, but doesn’t leave the American taxpayer holding the bag for the excesses of an out-of-control Wall Street.”
Perlmutter, who expressed strong reservations about the bailout as originally presented by the Bush administration, sits on the House Financial Services Committee, which on Sunday sent the House version to the floor for Monday’s vote. He sounded open to the complaints of some opponents in a roll-up-our-sleeves statement released Monday:
While not perfect, I felt this bill was a vast improvement over the original proposal which was a blank check to the Administration, little to no oversight or taxpayer protections or a prevention of huge compensation packages for executives. After 10 days of careful consideration and difficult decisions, I felt we needed to do something to stabilize the markets and help hard working Americans. …
That being said, this bill can get better, and I think the failure of the bill today presents us with an opportunity to come back to the table and work together to create a better plan.
DeGette struck a similar note in her statement after the bill failed:
“I will work with the leadership of Congress on both sides of the aisle to bring a new bill to the floor as soon as possible to inject liquidity into the market, allow small businesses and consumers to continue to obtain credit, and begin the long process of restoring confidence in the American financial system.”
Tancredo, who has made a career of defying public opinion, struck a principles-over-politics tone in his statement:
“After significant reflection, I have voted for the “bailout” plan designed to stabilize the markets and restore some degree of confidence to investors. I did so even though a significant majority of the calls and emails we received came from folks who were opposed to the measure. …
“I made the decision because I fear the folks who did everything the right way – those who paid their bills and lived within their means – would pay the price for the excesses of others.”
Waxing metaphoric, Tancredo described the urgency of the economic crisis and his take on the federal government’s responsibility:
“A careless smoker who starts a fire in his house may deserve to suffer the consequences. We could refuse to call the fire department and take solace in the fact that the careless smoker will lose everything – but if we do not act, the embers from the fire caused by his irresponsibility may land on homes throughout the neighborhood. In order to save our homes, we must put water on the fire started by the careless smoker.”
Congress resumes work Thursday after a recess Wednesday for Rosh Hashanah.