By Johnny Jackson
After a turbulent Monday on Capitol Hill and on Wall Street, the U.S. Senate has decided to continue to press forward to find a solution in the collapse of major financial institutions.
Some in the Senate - expected to convene today, following the Rosh Hashanah holiday - anticipate a vote could be made on a financial rescue plan as early as this evening.
While most Georgia leaders in the U.S. House oppose the plan, Sen. Johnny Isakson (R-Ga.) plans to vote for the Senate's version of what has been called a $700 billion "bailout" package when it hits the Senate floor.
"This is the most important issue we've faced in a half-century. Our country is struggling. Doing nothing is unacceptable," Isakson said. "I hope cooler heads will come to the table, so we can move forward with a proposal that is in the best interests of the American people, their savings and their future."
The plan to rescue the nation's financial institutions failed Monday in the House, which voted 228-205 to oppose the bill.
The House vote triggered an unprecedented decline in stocks. The Dow Jones industrial average lost 777 points - its largest single-day fall ever, beating the 684-point lost on the first day of trading after the Sept. 11, 2001 terrorist attacks.
"Obviously, the House vote [...] puts everything in a state of uncertainty and complicates the issue of whether or not the Senate will vote on a financial rescue plan, and I am certainly concerned about the way the markets have responded to [Monday's] vote," said U.S. Sen. Saxby Chambliss (R-Ga.)
"I believe failure by Congress to take action on the current financial crisis in the right way will have serious repercussions on Main Street," he added. "Something must be done, but any proposed legislation must protect our citizens and taxpayers and their economic well being, first and foremost."
U.S. Reps. David Scott (D-Ga.) and Lynn Westmoreland (R-Ga.) were among those who voted against the bill. Residents in both Scott's 13th District and Westmoreland's 3rd District were overwhelmingly vocal in their opposition to the bill.
"After all is said and done, David Scott is going to do what the majority of his constituents say to do," Scott said.
He said he believed the "bailout" did not address the root of the financial crisis. "Bailing out Wall Street with $700 billion dollars of taxpayer money without a dime to help struggling homeowners is wrong," he said. "The cause of the problem deals with these mortgages and the people who are unable to pay for these mortgages.
"Wall Street cried out for help, and they were heard," Scott added. "[But] I could not vote for that bill to bail Wall Street out and have nothing in this bill to bail out Main Street and these struggling communities. My district - we are among the nation's leaders in home foreclosures. It's not just a Wall Street problem, this is a problem at the kitchen table of American families across this country. They've got to have a stake in this as well."
Scott is asking that, in the amended version of the bill that failed on Monday, at least 1 percent of the "bailout" funding (which is about $7 billion) be earmarked for a program to help those currently facing foreclosure.
Rep. Westmoreland's office reported receiving hundreds of calls and e-mails per day last week from constituents who overwhelmingly opposed the "bailout" at a rate of about 95 percent, according to Westmoreland Spokesman Brian Robinson.
Robinson said that, though Westmoreland voted against the bill, the congressman would support returning to work on the issue immediately after Rosh Hashanah.
"I do believe that our nation faces great financial challenges right now, and I believe that Congress should act," said Westmoreland. "But the House should not appropriate up to $700 billion for a bill that didn't exist until a few days ago and that never went through one committee hearing.
"This legislation costs way too much to pass through Congress with so little scrutiny. If the process is broken, the product is flawed. Combined with war costs, other bailouts and the stimulus packages, we can't afford to be wrong with a price tag this high."
He said though the "bailout" may work in the short term, he is concerned about the long-term consequences. "When government willingly steps in to rescue people from risky behavior, government creates an incentive for future risky behavior," he said. "When businesses accept greater regulation in order to receive a bailout, we enlarge government, distort markets and render capitalism less efficient."
Several Georgia Republican and Democratic leaders voted down the bill, expecting to revisit the issue in the coming days. "Undoubtedly, this is one of the toughest votes that I've taken in Congress," Westmoreland added. "When faced with a tough decision, I rely on my principles - that smaller government is better and that markets work better [than] bureaucratic decisions."
He said he supports an alternative plan that would lower taxes and regulations, in order to create an incentive for private money, foreign and domestic, to flow back into the credit markets. The alternative proposal was shutout of the plan that went up for a vote Monday.
The alternative included, among other things, reform in mortgage-loan requirements, and requires that the Treasury write rules prohibiting excessive compensation, or golden parachutes, to executives of failed companies at the expense of taxpayers.