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WASHINGTON — Unanimous opposition from North Carolina Republicans in the House today helped defeat a $700 billion plan to buy bad debt from Wall Street.
All six House Republicans voted “no,” despite warnings from the Bush administration and both Republican and Democratic leaders in Congress that failure to approve the plan could lead to an economic meltdown.
Four of seven North Carolina Democrats in the House also voted against the plan. The remaining three Democrats voted for it.
Stocks plunged on Wall Street during and after the vote, which was held open 37 minutes as congressional leaders tried unsuccessfully to persuade enough members to change their minds.
The buyout package, which emerged after a week of delicate negotiations among the House, Senate and Bush administration, was defeated 228 to 205.
Opposition came from both ends of the political spectrum.
Conservatives objected to the use of billions in taxpayer funds to buy bad debt linked to mortgages securities, while many liberals were troubled by the lack of substantial changes to the way Washington regulates Wall Street.
Some moderate members facing tough re-election battles were disinclined to vote for a measure that, polls show, most people oppose.
“This legislation was fundamentally flawed. It was expensive, and it would not have brought certainty to the marketplace,” said Rep. Patrick McHenry, R-N.C., one of more than 100 conservatives who lined up against the package.
While the effectiveness of the legislation has been debated, one thing is certain. The bill’s failure Monday inflicted deep uncertainty on Wall Street, where the Dow fell 778 points, the biggest single day drop in history.
The markets dropped sharply even before the voting ended. Rep. Virginia Foxx, R-N.C., who voted against the measure, said both Democrats and Republican leaders were attempting to change “no” votes by pointing to the drop.
The argument failed to move her. “The stock market may be down, but the Constitution is up,” said Foxx. “The stock market will survive this.”
Like McHenry and other conservatives, she argued that the package would not correct the underlying problem in the credit markets while putting too much taxpayer money at risk.
“The president should go on TV and explain to the American people that there are other ways to solve this problem,” she said.
It was unclear Monday how the Bush administration and congressional leaders would proceed after the defeat.
Until the public is convinced that an economic meltdown would result without the legislation, it is unlikely to pass Congress, said Rep. Mel Watt, D-N.C., who voted for the measure.
“Right now, they just perceive that we’re bailing out Wall Street, bailing out rich people,” he said.
A turning point, Watt said, will come when the public truly perceives that problems in the credit market have begun to affect their lives – restricting credit card limits, business loans and mortgages – and puts pressure on Congress to act.
“The real problem is that the American public has not been convinced there’s really a problem to solve,” he said.
Rep. Brad Miller, D-N.C., who voted for the measure, said he did so with great reservations, but that it was important for Americans to realize what could happen to the economy if the credit markets are not loosened.
“If credit is not readily available and affordable, middle-class American families will have a hard time buying a new car, with disastrous results for the Americans who depend on the automobile industry for their livelihood. The story is the same in industry after industry,” he said.
WHAT THEY SAID
REP. BOB ETHERIDGE: “The situation on Wall Street is affecting workers and businesses on Main Street and will only worsen without intervention.”
REP. WALTER JONES: “If anything, I am of the firm belief that this $700 billion Band-Aid won’t do anything in the long term to address the problems they say it will fix.”
REP. HOWARD COBLE: “Now that this bill has been defeated, we have to go back to the drawing board to see where Congress can assist in the recovery of the financial, credit and housing markets. I was never completely convinced that this rush to judgment was the right approach.”
HOW THEY VOTED
Voting Yes
Democrats
Rep. Bob Etheridge
Rep. Brad Miller
Rep. David Price
Rep. Mel Watt
Voting No
Democrats
Rep. G.K. Butterfield
Rep. Mike McIntyre
Rep. Heath Shuler
Republicans
Rep. Howard Coble
Rep. Virginia Foxx
Rep. Robin Hayes
Rep. Walter Jones
Rep. Patrick McHenry
Rep. Sue Myrick
All six House Republicans voted “no,” despite warnings from the Bush administration and both Republican and Democratic leaders in Congress that failure to approve the plan could lead to an economic meltdown.
Four of seven North Carolina Democrats in the House also voted against the plan. The remaining three Democrats voted for it.
Stocks plunged on Wall Street during and after the vote, which was held open 37 minutes as congressional leaders tried unsuccessfully to persuade enough members to change their minds.
The buyout package, which emerged after a week of delicate negotiations among the House, Senate and Bush administration, was defeated 228 to 205.
Opposition came from both ends of the political spectrum.
Conservatives objected to the use of billions in taxpayer funds to buy bad debt linked to mortgages securities, while many liberals were troubled by the lack of substantial changes to the way Washington regulates Wall Street.
Some moderate members facing tough re-election battles were disinclined to vote for a measure that, polls show, most people oppose.
“This legislation was fundamentally flawed. It was expensive, and it would not have brought certainty to the marketplace,” said Rep. Patrick McHenry, R-N.C., one of more than 100 conservatives who lined up against the package.
While the effectiveness of the legislation has been debated, one thing is certain. The bill’s failure Monday inflicted deep uncertainty on Wall Street, where the Dow fell 778 points, the biggest single day drop in history.
The markets dropped sharply even before the voting ended. Rep. Virginia Foxx, R-N.C., who voted against the measure, said both Democrats and Republican leaders were attempting to change “no” votes by pointing to the drop.
The argument failed to move her. “The stock market may be down, but the Constitution is up,” said Foxx. “The stock market will survive this.”
Like McHenry and other conservatives, she argued that the package would not correct the underlying problem in the credit markets while putting too much taxpayer money at risk.
“The president should go on TV and explain to the American people that there are other ways to solve this problem,” she said.
It was unclear Monday how the Bush administration and congressional leaders would proceed after the defeat.
Until the public is convinced that an economic meltdown would result without the legislation, it is unlikely to pass Congress, said Rep. Mel Watt, D-N.C., who voted for the measure.
“Right now, they just perceive that we’re bailing out Wall Street, bailing out rich people,” he said.
A turning point, Watt said, will come when the public truly perceives that problems in the credit market have begun to affect their lives – restricting credit card limits, business loans and mortgages – and puts pressure on Congress to act.
“The real problem is that the American public has not been convinced there’s really a problem to solve,” he said.
Rep. Brad Miller, D-N.C., who voted for the measure, said he did so with great reservations, but that it was important for Americans to realize what could happen to the economy if the credit markets are not loosened.
“If credit is not readily available and affordable, middle-class American families will have a hard time buying a new car, with disastrous results for the Americans who depend on the automobile industry for their livelihood. The story is the same in industry after industry,” he said.
WHAT THEY SAID
REP. BOB ETHERIDGE: “The situation on Wall Street is affecting workers and businesses on Main Street and will only worsen without intervention.”
REP. WALTER JONES: “If anything, I am of the firm belief that this $700 billion Band-Aid won’t do anything in the long term to address the problems they say it will fix.”
REP. HOWARD COBLE: “Now that this bill has been defeated, we have to go back to the drawing board to see where Congress can assist in the recovery of the financial, credit and housing markets. I was never completely convinced that this rush to judgment was the right approach.”
HOW THEY VOTED
Voting Yes
Democrats
Rep. Bob Etheridge
Rep. Brad Miller
Rep. David Price
Rep. Mel Watt
Voting No
Democrats
Rep. G.K. Butterfield
Rep. Mike McIntyre
Rep. Heath Shuler
Republicans
Rep. Howard Coble
Rep. Virginia Foxx
Rep. Robin Hayes
Rep. Walter Jones
Rep. Patrick McHenry
Rep. Sue Myrick