The Capital Region’s two Democratic members of the U.S. House of Representatives were on opposite sides in Monday’s vote on the $700 billion financial bailout bill.
Rep. Michael McNulty of Green Island voted for it, and Rep. Kirsten Gillibrand of Greenport voted against it.
The bill was defeated in the House by 228 votes to 205. It had been supported by congressional leaders of both parties and the Bush administration, who predicted dire economic consequences if the government failed to act.
But the legislation drew widespread opposition from the public. McNulty is retiring this year, but Gillibrand is in a fight for re-election in the 20th Congressional District against Republican candidate Sandy Treadwell.
Rep. John McHugh, R-Pierrepont Manor, voted for the bill.
A Gillibrand statement said she had “stood up to President Bush and her own party’s leaders in voting against a taxpayer-funded bailout for Wall Street.” Gillibrand said “We need to help firms recapitalize, and this should be done without solely using taxpayer money. … if the federal government needs to intervene, then [it] should receive a fair equity stake in the company in order to protect the taxpayer. If taxpayer funds are invested, then we would need much stricter executive compensation limits, so that Wall Street executives are not financially rewarded for the crisis they have created. To calm fears, we should raise the FDIC insured limits.”
The Federal Deposit Insurance Corporation insures bank deposits up to $100,000.
Treadwell took a similar position, issuing a statement saying: “I would not have supported the Paulson bailout bill before Congress because it lacked the necessary taxpayer protections and would have allowed Wall Street executives to continue to make millions while taxpayers foot the bill.
“It is the job of Congress to craft a fair plan that will protect retirees, homeowners, and small businesses. Congress needs to do that job now, before it’s too late.”
In the 21st District race to succeed McNulty, Democratic candidate Paul Tonko declined to take a position on the bailout legislation because he hadn’t read it — the bill was over 100 pages long.
He said it was greatly improved from the proposal initially put forward by Treasury Secretary Henry Paulson, but did not do enough to restrain executive compensation or to help homeowners struggling to pay a mortgage.
Tonko said he accepts the urgent need to address the credit slowdown, and that Congress needs to proceed in a bipartisan fashion to pass a new bill.
James Buhrmaster, Tonko’s Republican opponent, also was hesitant to take a position, although he said he probably would have supported the bill because “I don’t want to see a financial disaster.”
Like Tonko, Buhrmaster said the bill was an improvement over Paulson’s original proposal, and that he hopes Congress can pass better legislation in the coming days.
“I’m most concerned to protect taxpayers,” Buhrmaster said, adding he has “no sympathy for the businesses that got us into this mess.”
Former Saratoga County Treasurer and unsuccessful Republican candidate for state comptroller Chris Callaghan called the bailout bill “a bad but necessary thing.” Speaking just before 2 p.m. as the House was voting and he was watching it on TV, Callaghan said, “it may be the Apocalypse, I don’t know.”
Called again after the New York Stock Exchange closed, and the Dow had dropped several hundred more points, Callaghan was asked whether it’s alarmist to fear that America may be on the verge of another Great Depression.
“It’s alarmism to say it. It’s probably not alarmism to worry about it,” he responded.
Callaghan said he knows two people who have recently succeeded in getting credit, one from a local bank, TrustCo, and one in a Florida real estate transaction. Still, he said, he accepts the expert consensus that credit markets are not functioning at an adequate level, and that this puts the Main Street economy in jeopardy. Automakers will lay off workers, he predicted, if the crisis is not resolved.
Another Saratoga County resident, author Jim Kunstler, wrote on his blog Monday morning, before the vote, that even if the bill passed, “I expect the Great Bail-out to fail rather quickly in its main mission: to stabilize the banking system and calm the markets.”
Kunstler is a Democrat who has taken to calling the GOP “the party that wrecked America.” He has long predicted an economic depression, mainly because of a worsening worldwide oil shortage.
In reference to another of the day’s big financial stories, the takeover of Wachovia Bank by CitiGroup, he wrote “It’s odd to watch the talking heads on CNBC this morning, parsing endlessly over the latest minutiae of the latest deal for CitiGroup to land on Wachovia like a giant amoeba and begin the gruesome process of digesting its innards.”
Rep. McHugh’s district includes part of Fulton County. Gillibrand represents most of Saratoga County and part of Rensselaer, and McNulty has most of the Capital Region, including Schenectady, Albany, Montgomery, Schoharie, and parts of Fulton, Saratoga and Rensselaer counties.