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Area leaders react to bailout talk
By Heather M. Smith, Staff Writer
President Bush addressed the nation Wednesday night in a special broadcast, appealing to the nation to support his $700 Billion bailout proposal.
Earlier in the day, Senator John Cornyn spoke on the Senate floor; he discussed his initial concerns with the Bush administration’s proposal for financial stabilization.
“I have to tell you that I am extremely upset that we find ourselves in this terrible situation,” Cornyn said. “And I can tell you that the phone calls I’ve been getting from my constituents are overwhelmingly angry at how we could possibly find ourselves in this situation.”
The president bowed to some demands the Democrats issued. The Treasury Secretary will have to answer to how he spends bailout dollars and provisions of executive compensation were changed so that salaries and severance of top executives will be capped.
“This is too little too late,” Dan Dodd of the Collin County Democratic Party said. “The executives were making millions, now they’re going to still get a President’s salary of $400,000 -- this isn’t enough.”
Bush reminded the nation that there were triple-digit swings in the stock market recently and that banks have restricted lending. He stated that we are “in the midst of a serious financial crisis.”
The president went on to say that they, his administration and Congress, are working to address the root cause behind the instability in the markets. He said this bailout proposal is not aimed at preserving any individual company.
“Our economy is in danger,” he said.
Bush addressed key questions, he said, the American people had. First “how did we reach this point in the economy?”
In response, the president said that the problems developed over a period of time. More people borrowed money, due to the massive amounts of money flowing in from foreign markets. He said “easy credit combined with the faulty assumption that the housing market would continue to rise” led to defaults on loans when supply of housing exceeded demand. This set off a domino effect in the economy, investors incurred severe losses. They faced imminent collapse and that would cause the “gears of the American financial system to grind to a halt.”
Bush urged the nation not to “let the irresponsible actions of some to undermine the financial security of all.”
He addressed another question of the American people, “how would the rescue plan work?”
His response was that it would remove the risk posed by troubled assets and free banks from the bad loans on their books so they can resume the free flow of credit. They would also establish a bipartisan board to oversee the money. The bill would also ensure that taxpayers are protected.
We will make certain that failed executives don’t receive a windfall from your tax dollars,” Bush said to the nation. “Much if not all of the tax dollars will be paid back.”
“What’s going to happen is that what Bush presents isn’t what’s going to be passed,” Dodd said. “Things will change significantly.”
Bush closed his address by stating that in the long run Americans have a good reason to be confident in the American economic strength, “democratic capitalism is the best system ever devised” he said.
“It’s absolutely ridiculous that we would be doing this,” Chris Claytor, Libertarian candidate for U.S. Representative said. “This isn’t what the Constitution says the government should do.”
Thursday morning, before the meeting among McCain, Obama, and Congressional leaders, a consensus was reached on the general direction of the legislation. According to the Associated Press the private talks among the leaders ended midday. An agreement in principle was announced following the talks.
House Republican leader John Boehner issued the following statement, “I am encouraged by the bipartisan progress being made toward an economic package that protects the interests of families, seniors, small businesses, and all taxpayers,” he said. “However, House Republicans have not agreed to any plan at this point.
The new tentative plan would give the treasury secretary $200 billion up front and if he could certify that it was needed, be given an additional $100 billion. The final $350 billion, Congress could block with a vote. This would give Congress more control over the spending.
The Noriega campaign to elect Richard J. Noriega for U.S. Senator issued the following statement, “Any new bailout must contain provisions to help middle class Americans keep their homes and their retirement security. Americans need to hold Wall Street accountable for its failures, just as Americans need to hold their elected representatives accountable for their failures to address this before it became a $700 billion problem.”
Discussions about the proposal continue to bounce back and forth between Congress and the Bush administration. Congressman Sam Johnson’s office calls it “a moving target.” Daily concessions by the Administration are being made, but key lawmakers in Washington still demand more before an official agreement will be met.
“What I see when talking to voters is that there is a feeling of injustice” Tom Daley, democratic candidate for U.S. Representative said. “The government is turning their back on individual homeowners and small businesses, yet demanding a bailout. Last night Bush failed to connect the pain on Main Street with the bailout on Wall Street.”
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