Wayne County's US Reps speak on bailout failure
By Matthew Whittle
Published in News on October 1, 2008 1:53 PM
Wayne County's U.S. Reps. G.K. Butterfield and Walter Jones said Tuesday morning that despite Wall Street's historic 700-point collapse Monday, they believe the House did the right thing by voting down the proposed $700 billion bailout.
But while both described their decisions as a reaction to their constituents and an effort to protect taxpayers, their explanations were different.
Democrat Butterfield ex-plained that he was concerned that there was not enough in the proposed legislation to protect homeowners and ensure its price tag was affordable.
Republican Jones said he was simply not sold on the idea of the bailout as the only, much less the best, option.
"There are some serious problems, no question about it. This is a long-term issue, though, and we need to listen to the experts. This was not the right bill," Jones said. "I would like to see Wall Street itself step up. The taxpayers need not be responsible for failures of Wall Street."
Butterfield said the bailout is necessary, but agreed this wasn't the right bill.
"There's no question that the markets are in trouble, but the solution is not just throwing $700 billion at this problem, purchasing up bad debts and crossing our fingers that the government can recoup the money," he said.
He explained that despite the leadership's efforts, there simply was not enough in the bill that the rank and file members of either side of the aisle could agree with.
He applauded the inclusion of a five-member board to oversee the spending of the $700 billion, limits on executive compensation for company's accepting bailout money and the provisions for the government to see a return on its investments -- although he also noted that the last two points didn't go far enough.
But it was what was not in the bill that in the end led him to vote against it.
He explained that in any future legislation, he would like to see a better accounting of how it would be paid for, a provision to increase bank deposit protection from $100,000 to $250,000, and a provision to allow bankruptcy judges the ability to modify people's mortgages to help them stay in their homes.
"We ran into a roadblock yesterday. Almost all my phone calls (from constituents) were opposed to the bailout in its current form, so I made the decision that it was not in the best interests of the people in my district to vote for it," Butterfield said.
It was a similar story from Jones, who also said his phone had been ringing off the hook with people urging him to oppose the legislation.
"Congress needs to look at all its options," he said. "It is not right to rush this through. You can't do all this in one week."
Now the trick will be to come to another compromise before much more damage is done to the financial markets.
In particular, Butterfield voiced concerns about what could happen to small businesses if credit continues to tighten, and to homeowners and local governments relying on tax dollars if foreclosures continue to increase.
"Business need to be more responsible and many of the families should have known better. But it's a cascading effect. There's no question we need to enact a rescue plan, that the government should intervene," he said. "The question is how and to what extent.
"There are mainstream economists who say we have a problem, but that there are other ways, less expensive ways to deal with it.
"The leadership thought they could just run it through, warning about Armageddon if we didn't vote for it, but they got the message that this didn't satisfy the rank and file."
Butterfield and Jones are hopeful that a solution can be reached once Congress returns to Washington, D.C. Thursday.
The goal, Butterfield said, is to take another vote by Monday or Tuesday.
"I'm hoping we will slow down and settle down and get some more input from economists," he said. "There are two sides to this debate, and we need to not act recklessly."
Other North Carolina members voting against bill were Democrats Heath Shuler and Mike McIntyre, whose district includes Duplin County, as well as all the other five Republicans, Virginia Foxx, Howard Coble, Robin Hayes, Sue Myrick and Patrick McHenry.