Many Americans are unhappy about bailing out the very people on Wall Street who they see as creating the crisis, writes Denis Staunton
THE MEMBERS of Congress who voted against President George Bush's $700 billion financial rescue plan this week came from both ends of the political spectrum and most points in between.
The most reliable determinant of each vote, however, was the margin of victory a congressman enjoyed at the last election, with those facing the closest elections in November most likely to vote against the Bill.
Every seat in the House of Representatives is up for re-election in a little over a month and congressmen facing tough races were unwilling to offer challengers a populist cause to use against them.
Some 32 out of 37 House Republicans listed by the Cook Political Report as in danger next month voted No, as did 18 out of 29 Democrats in the same category. On the other hand, 22 of the 29 Republicans who are leaving the House this year voted in favour of the Bill; all but two of the Democrats who are leaving this year voted yes and the pair who voted No are running for the Senate.
Despite Bush's warnings that the entire US economy is at risk if his plan is not passed, many Americans are unhappy about what they see as a bailout of the very people on Wall Street who created the financial crisis by taking reckless risks with other people's money.
Conservative talk show hosts like Rush Limbaugh have been railing every day against the expansion of government influence over the market, accusing treasury secretary Hank Paulson of seeking the role of a socialist commissar running a command economy.
On the day of the vote, Limbaugh singled out a phrase in the Bill providing authority to the treasury secretary "to restore liquidity and stability to the US financial system and to ensure the economic well-being of Americans."
"This absurdity is better known as socialism," Limbaugh said.
"Our government is going to pass a law that has as its stated purpose the secretary of the treasury ensuring the economic wellbeing of Americans? No, ladies and gentlemen, that is not what is in the United States constitution."
Political fear was not the only motivating factor behind opposition to the plan, which conservative Republicans and liberal Democrats alike complain will concentrate too much power in Paulson's hands.
Most members of the black congressional caucus and of its Hispanic counterpart voted against the Bill because it did not include changes to the bankruptcy laws that would allow home-owners facing foreclosure to file for bankruptcy protection to stay in their homes.
Other Democrats are sceptical about throwing $700 billion at Wall Street in the hope that easing the credit crunch in the financial markets will trickle down to ordinary Americans. They argue that more of the money should be used to provide a bottom-up economic stimulus, perhaps through an increase in unemployment insurance.
The Bill's rejection highlights the bleeding away of Bush's authority in the final days of his presidency, as he failed to convince voters and members of his own party in Congress of the urgency of supporting his plan.
Some in Congress are also blaming Paulson, a former chairman of Goldman Sachs who has spent much of his career on Wall Street but lacks political instincts.
They complain that the treasury secretary tried to railroad the rescue plan through Congress without taking into account that he is dealing with elected officials who need to defend their seats in a few weeks.
Neither presidential candidate has offered a profile in courage during the crisis, as John McCain appeared uncertain on the rescue plan, while Barack Obama sought to stay as far away from the controversy as possible.
Obama is benefiting politically from the financial crisis, regaining a strong lead in the polls in recent weeks and there is little evidence that the Democratic candidate swung many votes in favour of the plan. Indeed, some of his closest associates in the House voted against it, including Illinois congressman Jesse Jackson jnr.
Republicans sought to blame House speaker Nancy Pelosi for using the debate on the Bill to deliver a partisan attack on the economic policies of the Bush administration. The more serious criticism is that she allowed the Bill to reach the floor before she was sure there were enough votes to pass it. Important measures are usually driven through Congress with tough discipline, as whips threaten and cajole members.
With a measure like the bailout plan, which was unpopular but seen as necessary by congressional leaders, neither party wanted to claim ownership, even if the leaders wanted it to succeed.
All sides agree that a revised version of the plan will return to Congress before the end of the week, but if it is to succeed, Bush, the presidential candidates and the party leaders will have to do a better job of explaining to Americans why rescuing Wall Street is necessary to protect Main Street from economic destruction.