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'No deal' sentiment on bailout softens
Friday October 03, 2008
By Berny Morson
Colorado's congressional delegation reported Tuesday a softening of public opposition to a bailout of the financial services industry.
The vast majority of calls and e-mails late last week and into Monday opposed a bailout plan negotiated by congressional leaders and the Bush administration.
But the tone changed markedly after Monday's rejection of the package and the dizzying plunge in stock indexes.
By Tuesday afternoon, congressional offices were reporting a more sober tone from the public, with constituents divided on whether to bail out the markets.
Last week, callers were saying, "Don't bail out the Wall Street fat cats," said Rep. Diana DeGette, D-Denver, who voted for the failed package.
"Today, what's happened, finally there's been some education, the calls are much more balanced, and there's much fewer of them and a lot of people are now calling and saying, 'Thank you for taking a gutsy vote that will protect my pension,' " DeGette said.
"People are realizing how this will affect them, that their credit card limits will be reduced, that their lines of credit will be eliminated, that they won't be able to get mortgages, and if they do it will be a higher interest rate and higher down payment," she said.
That realization will be critical in changing votes in Congress when a new version of the bill comes up for a vote, DeGette said.
No such change was evident from Rep. Doug Lamborn, R-Colorado Springs. A spokeswoman said he's sticking by the statement he issued immediately after the Monday vote, which referred to defeat of the bill as "a victory for taxpayers."
Lamborn said the government should not interfere with the free market.
Rep. John Salazar, D-Manassa, said his calls last week were solidly opposed to the bailout.
On Tuesday, about 80 percent of callers backed his vote against the bill, but 20 percent now want a solution to the crisis, with some worried about their retirement plans, Salazar said.
Salazar noted that, despite the plunging stock prices Monday, "The sky didn't fall." That bolsters his contention that Congress should not allow itself to be rushed into a solution.
"We should stay here until we get it right," Salazar said. Getting it wrong could cause more problems, he said.
Rep. Ed Perlmutter, D-Golden, voted for the bailout. His calls were evenly divided Tuesday, spokeswoman Leslie Oliver said.
Perlmutter, who sits on the financial services committee, sent a letter to House leaders calling for several steps before a bill is brought back to the House.
Perlmutter said more of the proposed rescue money should go to agencies that lend directly to farms and Main Street, such as the Farm Credit Administration and the Small Business Administration.
He also called for technical changes in the way banks value bad loans. The current method makes the situation seem worse than it is and hurts efforts to attract new capital.
Permutter's third recommendation: "Consider placing someone other than Hank Paulson in charge of this."
Perlmutter did not elaborate on why he thinks Paulson, the Treasury secretary, must go.