By Johnny Jackson
The controversial multi-billion dollar emergency economic stabilization proposal that failed to pass in the U.S. House of Representatives on Monday, succeeded Friday on an amended second go-round. A version that could total more than $800 billion.
U.S. Rep. Lynn Westmoreland (R-Ga.), who represents parts of Henry County, voted against the legislation, which passed the House, 263-171, with every Georgia Republican opposing it.
"I voted 'no' on Monday, because I didn't think that our leaders had taken the right approach to the financial crisis," said Westmoreland on Friday. "I voted 'no' today, because it's the exact same 'solution,' but with sweeteners added to attract votes."
The House vote follows the passage of similar legislation in the U.S. Senate on Wednesday.
"Because of this week's actions in Washington, Americans who pay their taxes, and who pay their mortgages on time, and who acted responsibly, will be handed a tab for up to $700 billion," Westmoreland said. "My constituents in Georgia's Third Congressional District called and wrote me in record numbers over the past two weeks, and by a margin of 9-1, they asked me to oppose this bill."
He said he believes the bill, which has been called the "bailout," may or may not help the U.S. economy in the short term.
"In the long term, it puts us on a dangerous path toward government ownership of private securities and creates a 'moral hazard' - investors and businesses will believe that risky bets will enrich them, if they succeed, and government will write a check if they fail," he said. "We face serious challenges in our economy, and I do believe that Congress can help. But this legislation is not the answer."
U.S. Representative David Scott (D-Ga.) - a member of the House financial services committee who represents parts of Clayton County and parts of Henry County - voted to support Friday's version of the rescue bill.
"If I thought this was just a bailout for Wall Street, I would continue to oppose it," he said. "[But] two things changed this week to help me decide to vote for the final version of this economic assistance bill.
"First, I was able to work with House leadership to strengthen language providing assistance to homeowners," he said. "The language of the bill now forces the Secretary of the Treasury to take a more aggressive strategy to restructure troubled mortgages and prevent further foreclosures."
Scott said that some small businesses in Atlanta have started to run out of short-term loan options and have said they would have to start cutting payroll to make ends meet.
"I believe that, in order to help keep employees on the job, we could not wait around for a perfect bill," he said.
He said he also wanted to bring more attention to legislation that he previously helped pass to bring relief to homeowners. He helped draft the Housing and Economic Recovery Act. Scott said that the Department of Housing and Urban Development and the Federal Housing Administration announced two programs this week which should help homeowners.
The HOPE for Homeowners Program is designed to help at-risk homeowners, in default and foreclosure, refinance their home mortgages into more affordable, sustainable loans. The Neighborhood Stabilization Program would provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities by providing grants to purchase foreclosed or abandoned homes, to rehabilitate, resell, or redevelop them.
According to Rep. Westmoreland, Treasury Secretary Henry Paulson had presented his three-page plan to Congress two weeks ago, warning that the markets would collapse if Congress did not act within days.
"The secretary was clear that no alternatives were considered, and I believe that too much is at stake to do this in a closed process," Westmoreland said. "I, along with other members of the Georgia delegation, advocated for free-market solutions that would have put liquidity into the credit markets, while putting the responsibility on the offenders, not the innocent taxpayers.
"Our present credit crisis derives from millions of Americans defaulting on their mortgages. This legislation does nothing for those homeowners; instead it focuses its assistance on the Wall Street titans who bundled, bought and sold these toxic securities and made millions doing it. I want a 'workout' not a 'bailout.'"