Congressmen offer take on economy
Dorchester's two men in Congress - Michael Capuano in the Eighth District and Stephen F. Lynch in the Ninth - agree they want to see Wall Street help foot the bill for any government-sponsored bailout of the financial industry. Nonetheless, the men came down on opposite sides of Monday's vote on Treasury Secretary Henry Paulson's $700 billion bailout bill.
"Do you take the risk of voting yes, saving the economy and incurring a cost to taxpayers or do you take the risk of voting no and the economy collapses? I took what I thought was a smaller risk to my average constituent," said Capuano, who voted for the bill.
Lynch, siding with fellow Massachusetts lawmakers Bill Delahunt and John Tierney, voted against it.
"The bill that they came up with simply relied on the taxpayer exclusively to bail out the financial industry," said Lynch in an interview Tuesday. "There was no shared sacrifice in this proposal and I could not support it."
Lynch said he would have added a payback from Wall Street firms, such as government imposed trading fee on large stock market transactions, or a fee on all trades.
"It could have been pennies," he said. "I haven't heard from anyone who thinks [the bill as it stood] was a fair deal."
Capuano also said he would have preferred stronger oversight over the proposed purchases of distressed assets, purchases that could have included items such as Collateral Debt Obligations (CDOs), in which ownership is very difficult to determine.
"But something was better than nothing, in my opinion," he said. "Anything more would have cost us more Republican votes."
Both Lynch and Capuano serve on the House's Financial Services Committee under chair Barney Frank, who was under siege last week every time he appeared on the floor. Congressmen from far and wide assailed Frank with requests, suggestions and demands. Frank led negotiations with the administration and the Senate on the bill, hastily drawn in only eight days since Paulson first proposed it on Sept. 20. Frank's efforts were for naught on Monday, however, when the bill was voted down, 228 to 205.
The vote sent the Dow Jones Industrial Average plunging 777 points - hailed alarmingly as the largest point drop in history (but actually a smaller percentage drop than 1987's Black Monday crash). The market recovered the majority of that ground by Tuesday's closing bell.
"I represent 640,000 people. I don't represent Wall Street," said Lynch. "Sure they're upset I don't think they should expect a taxpayer bailout."
Members of the House have been asked to hold today open for a possible rematch between the carefully balanced sides of the issue, one in which the slightest variation in the bill seems to split the vote along new and unpredictable fault lines on both sides of the aisle.
"I think the best thing we can do is take a deep breath and see what happens in the next few weeks," said Capuano. "Some people think we have a shorter time frame than that, I'm not so convinced."