Tancredo supports bailout plan

Posted 9/30/08

Robyn Lydick Comparing the investment and credit banking industry to a burning methamphetamine lab, U.S. Rep. Tom Tancredo, R-Littleton, defended his …

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Tancredo supports bailout plan


Robyn Lydick

Comparing the investment and credit banking industry to a burning methamphetamine lab, U.S. Rep. Tom Tancredo, R-Littleton, defended his vote on a bailout plan for Wall Street.

“When a meth lab is burning, people feel the guy deserved it,” Tancredo said.

Like a house fire started by a careless smoker, Tancredo said, Congress must shore up the financial industry.

“A careless smoker who starts a fire in his house may deserve to suffer the consequences. We could refuse to call the fire department and take solace in the fact that the careless smoker will lose everything — but if we do not act, the embers from the fire caused by his irresponsibility may land on homes throughout the neighborhood,” Tancredo said. “In order to save our homes, we must put water on the fire started by the careless smoker.”

Tancredo, along with Rep. Diana DeGette, D-Denver and Rep. Ed Perlmutter, D-Golden, voted for the plan offered by U.S. Treasury Secretary Henry Paulson, which would have provided a quick cash infusion of $350 billion and a bump of $100 billion later with options to ask Congress for another $250 billion, all through asset purchases by the government, which it would then hold and sell later.

The $700 billion figure is a cap on the proposal, and it has a two-year limit.

Part of the plan called for a new cap on public debt of $11.3 trillion.

The plan failed Sept. 29 by a 228-205 vote.

Congress then recessed for Rosh HaShannah and will be back in session at noon, Oct. 2.

Perlmutter called the plan a vast improvement over the first plan. He referred to the first plan as a blank check for the Bush administration.

DeGette released a statement that said, in part, “this is not an abstract concept about Wall Street. Without this legislation, it will be harder for consumers to get basic car or home loans, small businesses will have trouble making payroll, pensions could deteriorate, and credit card rates will soar.”

Rep. Mark Udall, D-ElDorado Springs, said he voted against the bill because he wants to see more oversight.

“I take very seriously the warnings about how conditions in the credit markets could affect the overall economy,” he said. “But the cost of this bailout was too high and the return far too uncertain for the American families who were being asked to bear the burden. And I cannot ignore that many of the people sounding the alarm are the same ones who recently said things were under control, that risk was being nearly managed out of the system, and that stronger government oversight was unnecessary and counterproductive.”

Tancredo, voting with Perlmutter and DeGette, said he expects a new bill when Congress resumes.

“I hope the leadership is working on something that can get 218 votes,” he said.

Tancredo said he was looking out for people and smaller business.

“I could care less if Wall Street hot shots get a haircut, but it is endangering all of our homes,” he said, returning to the meth lab fire metaphor. “Everybody’s got a 401(k), and things don’t happen in a vacuum and only the bad guys get hurt. We all get hurt.”

As of press time Sept. 30, stocks were ticking up from the record 777-point freefall of the Dow Jones Industrial Average the day before.

The Dow is a measurement of 30 of the most widely held stocks. Three banks are traded on the Dow: Bank of America, JP Morgan Chase and Citigroup.

Tancredo called it a dangerous situation and said that stability in the market benefits everyone.

“I’d love to be wrong. The bill failed and the consequences could get ugly, if I’m right.”

In his news release, Tancredo said he had no bank support.

“For the record, I receive no support from big banks, Wall Street investment houses or corporate executives. I was not individually lobbied by any of the Congressional leadership to vote for the bill. And I have no job offer from any entity connected with the any organization that would benefit from the bill.”

A scan of donors over the years turned up several banking related political action committees.

Corporations cannot give to political campaigns, so companies or business associations form PACs to spend money in politics.

Tancredo has received $50,800 from banking, credit union, and investment PACs:

American Bankers Association, $4,500 from 1998 to 2001

Amvest Corp. PAC, $500. Amvest is an investment banking firm.

Credit Union Association of Colorado, $50.

Credit Union Federal Legislative Action Committee, $4,000.

CULAC, the PAC of Credit Union National Association, $20,000, with $8,000 from 2004-06, Tancredo’s last election.

First National of Nebraska PAC, a bank with holdings and locations in Colorado, $500.

Goldman Sachs Group PAC, $2,000.

Heartland Community Bankers Association PAC, $2,750.

Independent Community Bankers of America PAC, $2,500.

Investment Co. Institute PAC, $4,500.

JPMorgan Chase PAC, $3,000. Acquired Washington Mutual late last week in a government-brokered deal.

Morgan Stanley PAC, $1,000.

Oppenheimer Funds PAC, $2,500.

Sallie Mae, college and educational loans, $3,500.

US Bancorp political participation program, $2,000.

“I received no calls asking for my vote on the plan from the banking industry,” Tancredo said.

He said he hopes leadership on both sides of the aisle will come forward with a viable bill to stabilize the money markets.


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