Worcester Telegram - Senator Kerry on the Financial Crisis
Kerry says bailout needed
By John J. Monahan TELEGRAM & GAZETTE STAFF
U.S. Sen. John F. Kerry yesterday called on Congress to put party bickering aside to avoid "an economic tsunami."
"I think this (economic rescue plan) will pass the Senate," Mr. Kerry, D-Mass., said at a press conference at his Boston office, while complaining the bailout is a bitter pill for him and other lawmakers who have been seeking finance reform for months to prevent the current crisis.
But, he said, "I think we are going to pass this because we have to pass it."
"This is no time for small-time political bickering. We have to put the politics aside and unite in order to restore confidence in our capital markets. Today is the time for action, not partisanship," Mr. Kerry said.
While the House had been counted on until now to act first on the measure, Mr. Kerry's suggestion that the Senate may now go ahead follows on reports from several Democratic House members, including U.S. Rep. Stephen F. Lynch, D-Boston, that House Speaker Nancy P. Pelosi, D-Calif., has asked House members to be available in Washington for possible votes tomorrow.
"Make no mistake about it. The Congress has to come together across party lines to address this economic challenge," the senator said.
Meanwhile, Mr. Lynch, who was among 95 Democrats who blocked passage Monday, said yesterday he would oppose the bill again if major changes are not added that would make Wall Street firms and the nation's financial services industry pay a share of the bailout tab.
"If I cannot get a buy-in from the financial services industry, I can't support it, bottom line," Mr. Lynch said of his position on the legislation that could put up $700 billion or more of taxpayers' money to buy marked-down and failed mortgages from financial institutions to clear up their balance sheets.
"I have a fair position. I am not asking for the world here. That should not be out of bounds," Mr. Lynch said. Before the vote, he said, calls to his office were running almost unanimously against the bill.
"It was 50-50. Fifty percent no,' and 50 percent hell, no,' " the congressman said. Since yesterday, he said, the calls are running about 60 percent against and about 40 percent for the package.
"My problem was that I was looking for some type of buy-in by Wall Street and by the financial services industry to contribute to the solution, and there was resistance from the White House to do that. They didn't want to ask Wall Street to contribute to this," said Mr. Lynch.
"I just can't abide that agreement," Mr. Lynch said, arguing that is a concern shared by many who opposed the bill Monday.
Mr. Kerry said the bill that failed in the House "was not a bailout for Wall Street," as was the initial proposal from the Bush administration. The House bill, he said, included several new protections for taxpayers.
Mr. Kerry emphasized the economic stakes are enormous. "It's an effort to protect businesses and families from a serious credit crunch. This is not about a big Wall Street firm. This is about credit flowing to small businesses, to community banks, to people who need to keep their doors open with a payroll," he said.
"The stark reality," he said, is that without federal assistance, "we face collapse of the system."
"Small businesses would be unable to find financing, and jobs, literally potentially millions of jobs, would disappear," Mr. Kerry said of the options facing Congress over putting up $700 billion to rescue holders of potentially bad mortgages.
Mr. Kerry said the revised bill requires the U.S. Treasury to modify loans to help families facing foreclosure and puts up money to help fund renegotiated mortgage terms for homeowners unable to keep up with payments. He said it also includes "strong congressional oversight."
He said companies that take advantage of the program would have to provide benefits to taxpayers if and when their value is restored, and the bill would also limit executive compensation in firms using the bailout funds.
Mr. Kerry said politics and ideology stopped House passage Monday. "It failed, sadly, because there are some people who place ideology or a rigidity in that ideology or some other interest ahead of this larger interest," the senator said. "The deal yesterday was that each side would provide 50 percent of the votes. Nancy Pelosi produced 60 percent of the Democrats. Only 30 percent of the Republicans showed up," Mr. Kerry said.
"The whole point is the private sector doesn't have the confidence to step up, or even the liquidity to step up," he said of the continued push by some conservatives for a private sector solution.
"What's important now is, I don't want average folks here in our state, or across the country, hurt. I really don't," Mr. Kerry said.