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Sep 29, 2008 6:04 PMPublication: The East Hampton Press

Tim Bishop says failed bill would have stablized 'Main Street'

Sep 29, 2008 6:04 PM

U.S. Representative Timothy Bishop of Southampton joined most Democrats and some Republicans voting Monday in favor of a $700 billion economic recovery bill, although, in a historic event for both Washington and Wall Street, the House of Representatives rejected the rescue plan, 228-205.

“The downside of doing nothing greatly outweighed the risk of doing something, which we tried to do today,” he said Monday night of his vote in favor of the package, which would have provided $350 billion to the financial industry, and could have provided another $350 billion to Wall Street after a congressional review. “Now, the Dow is down. It lost 500 points from the time we began voting around 1 p.m. today until late this afternoon.”

When the dust cleared, the Dow had actually fallen 777 points from opening to close on Monday, the largest one-day slide in history. The market regained nearly 500 points on Tuesday, though, one of the largest increases in history, with news that Congress will convene on Thursday to try to assemble a package that will pass both houses of Congress and be signed by President Bush.

Meanwhile, Lee Zeldin, Republican candidate for Mr. Bishop’s 1st District seat in the House, said he opposed “Washington’s plan to force taxpayers to foot the bill for a $700 billion bailout of Wall Street” at the expense of taxpayers, and urged Mr. Bishop to vote against the plan.

But Mr. Bishop said the bill was not a case of bailing out Wall Street, and that his opponent “didn’t get it.”

“I don’t think anyone will argue it was a perfect solution, but it is a workable solution—and now that it didn’t pass, we are already seeing the downside. The Dow lost 777 points today. That’s a very alarming number ... That’s what I mean by the risk of doing nothing,” Mr. Bishop said Monday.

“This was not a bailout of Wall Street. It’s about an effort to bring stability to and liquidity to our credit market, and to our financial market, so people can have jobs and borrow money. In other words, it’s about keeping the economy moving. It’s about protecting Main Street.”

As a sign of the worsening economy, Mr. Bishop noted that on Eastern Long Island there are at least 14 multimillion-homes being built where the owner of the home has stopped construction “because he doesn’t know what’s in his future. It’s not just about the 14 homes, it’s about all the construction workers that aren’t going to have jobs as a result.”

Mr. Bishop said the bill, as revised from the original proposal from President Bush and Treasury Secretary Henry M. Paulson Jr., featured strong taxpayer protections. Some of the key components were reinvesting in the troubled financial markets to stabilize the economy; reimbursing the taxpayer by requiring a plan to guarantee they will be repaid in full; and reforming how business is done on Wall Street, with no “golden parachutes” for chief executives, and sweeping government oversight.

The bill also gave taxpayers a share of the profits of participating companies, or put taxpayers first in line to recover assets if a company fails; required the president five years from now to submit a plan to ensure taxpayers are repaid in full, with Wall Street making up any difference; and allowed the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families.

Mr. Bishop had predicted Monday night that “we will see even further losses in the Dow Tuesday.” But American markets rebounded, with the Dow Jones Industrial Average, Nasdaq and the Standard & Poor’s 500-stock index all up between 4.68 and 5.27 percent on the day.

In a telephone press conference Tuesday morning, U.S. Senator Hillary Clinton agreed with Mr. Bishop that doing nothing to offset Wall Street’s losses was worse than passing the bill, which she said everyone agreed was not perfect.

“I think it’s very important to stress, first of all, that if nothing is done, we will see small businesses that cannot continue to keep their doors open because they cannot get the loans that they need for inventory and other important business expenses,” Mrs. Clinton said. “Even larger businesses I’m hearing from are stretched to near the breaking point. A lot of our businesses depend on credit every single day, and they’re finding that credit very difficult, if not impossible, to find and afford.

“But on the personal level, students are going to have increasing trouble finding college loans. Families are having difficulty with the daily expenses and certainly with their housing costs as home values drop. And we know that this credit crisis that we are in the midst of cannot on its own correct. It sounds dire, but there is a risk that commerce could grind to a halt,” she said.

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I just e-mailed Rep. Bishop to urge him to reconsider his support for a bad bill. An overwhelming majority of Americans do not support the bailout. Some alternative ideas I sent along are 1.) cut corporate income tax 2.) cut corporate capital gains taxes 3.) restructure failing mortgages through private lenders 4.) offer insurance to those private lenders that assume the montage backed securities debt 5.) save capitalism
By tom (53), Hampton Bays on Sep 29, 08 10:53 PM
There is supposed to be risk on Wall Street! Our totalitarian government should stop trying to scare us in order to save the wealthy ruling class and strip individuals of their independence.
By TheGoodLife (43), Westhampton Beach on Oct 2, 08 1:00 PM