Staff and Wire reports
SANTA FE — New Mexico Reps. Tom Udall and Steve Pearce, locked in a race to succeed retiring U.S. Sen. Pete Domenici, voted Monday against the bailout of the nation’s financial system. Each cited insufficient protection for taxpayers in the $700 billion package.
The third member of the state’s congressional delegation, Republican Heather Wilson, voted for the plan, which failed 205-228.
Udall, the Democratic nominee for the Senate seat, said the proposal endorsed by the White House and some congressional leaders did too much for corporate executives and too little for homeowners.
Udall said he “cannot vote for a Wall Street bailout that does not solve the underlying problems with our economy.” Congress made significant changes to President Bush’s proposal but “should have taken more time to get this right,” he said.
Pearce, the GOP nominee, said he disapproved of “putting taxpayers on the hook in order to bail out the Wall Street firms that got us into this crisis.”
“We now need to rewrite the bill to incorporate real taxpayer protections, market solutions instead of massive government intervention and correct the abuses that caused the problem,” Pearce said.
Wilson, who is not running for re-election, said she supported the legislation because it’s important for Congress to stabilize the financial markets. The plan contained protections for taxpayers and homeowners, she said.
“The bill would have given needed liquidity to the financial industry and let taxpayers share in the profits as mortgage markets recover,” she said.
All three members of the delegation are leaving their House seats. Wilson lost to Pearce in the primary election for the seat held by Domenici, the longtime Republican senator.
In a news release, Domenici criticized the House vote.
“This is very serious and we have to find a plan that Congress can accept. Doing nothing is not an option,” he said. “This action will precipitate an economic catastrophe for America.”
Domenici predicted the possiblity of higher interest rates on home mortgages, a continued credit freeze, loss of jobs and contraction of the economy, and loss of billions of dollars in pension plans.
He urged Congress to immediately begin working on adjustments to the plan.
Udall faulted the Bush administration for failing to adequately oversee the U.S. financial markets.
He said flaws in the bailout plan included giving the Treasury unprecedented power to spend taxpayer money without adequate oversight or a plan to fix the systemic problems; allowing corporate executives who “ran their companies into the ground” to get millions in “taxpayer-funded golden parachutes;” spending tax dollars to bail out foreign companies “whose governments are doing nothing,” and providing insufficient help for families who could lose their homes or watch their assets reduced as foreclosures drive down property values.
Pearce said the bill “was not our only option.”
“Going forward, legislation should include accountability for those who created the mess, transparency so investors can make informed decisions, limitations on leveraging so financial institutions are not allowed to overextend, end ’naked’ short selling, and favor market principles over government intrusion,” he said.
Investors “sell short” — borrowing shares of a company, usually from their brokers — if they think the shares of a particular company are going to decline and they want to profit from the drop.
“Naked” shorting, which has been restricted but not banned, involves selling shares without actually borrowing them.