Bailout splits Minnesota lawmakersMinnesota's U.S. representatives agree Congress needs to help fix the country's financial crisis, but on Monday divided their votes on a $700 billion plan to do that.
By: By Don Davis, State Capitol Bureau, Alexandria Echo Press
ST. PAUL – Minnesota's U.S. representatives agree Congress needs to help fix the country's financial crisis, but on Monday divided their votes on a $700 billion plan to do that.
Representative Collin Peterson, who represents the 7th District that includes Douglas County, said congressional leaders need to talk to more lawmakers than they have for the past couple of weeks.
"Clearly, they are going to have to go outside of the circle they have been talking to," said Peterson, adding that the Agriculture Committee that he leads "will be drug into this."
Minnesota's representatives split Monday as the House defeated the plan 228-205. Peterson and fellow Democrat Tim Walz voted against the proposal, joined by Republicans Michele Bachmann and Jim Ramstad. Four Minnesotans voted for the measure – Republican John Kline and Democrats Jim Oberstar, Betty McCollum and Keith Ellison.
"As it became increasingly clear that the financial crisis facing America was extending beyond Wall Street and threatening the jobs, homes and retirement security of the men and women reporting for work on main streets throughout Minnesota and across America, we were asked to cast our vote for an imperfect, but important, solution," Kline said. "Unfortunately, this bill did not pass, and the crisis continues."
Oberstar warned of consequences on stock markets, starting overseas and continuing in America.
"I think the confidence of domestic and foreign financial markets will be shaken," Oberstar told reporters.
Democratic and Republican leaders, who agreed to the package, now must talk to their members and see what changes could make the plan more acceptable, Oberstar added. He blamed the White House for not doing enough to win over Republican votes.
"When you’re voting on painful issues of this kind the generally agreed upon principle is both parties share the pain," Oberstar said.
Oberstar, dean of Minnesota's congressional delegation, said he understands that Peterson and Walz had "very genuine, very real" concerns about the package.
"The bill we voted on today passes the buck when it comes to recouping the losses taxpayers might suffer," Walz said. "I also regret that this bill does not do enough to help average homeowners, or provide sufficient oversight of Wall Street."
Peterson talked to some members of his Agriculture Committee, known as the House's most bipartisan panel, to find a solution to the impasse.
While some congressmen say changes made to Treasury Secretary Henry Paulson’s original bill improved the plan, Peterson said the Monday version was just "Paulson's plan with a few fig leaves."
"Bottom line: We are not convinced that Paulson's plan from the start was the right strategy," Peterson said.
“I don’t disagree that we have a problem in our credit markets and that Congress needs to take an active hand in getting us out of this mess, but handing the secretary of the treasury 700 billion taxpayer dollars as a blank check to buy up Wall Street’s bad debt was not the right solution," Peterson added.
One thing a new bill should do, he said, is increase federal insurance on bank accounts from the current $100,000 to $250,000.
Peterson said the Agriculture Committee will become involved in the dispute because commodity sales – the buying and selling of crops, for instance – is part of the problem.
After Monday's vote, Peterson met with some of his committee members and the Commodity Futures Trading Commission chairman.
Thirty-one of the Agriculture Committee's 45 members voted against the measure. Those are the ones Peterson is working with to find a new solution. Late Monday afternoon, Peterson said it was too early to know if a new consensus could be reached.
Peterson said the defeated bill did not consider up to $60 trillion in one type of questionable financial dealings, far more than addressed in the $700 billion proposal.
"Nobody knows what they are; nobody knows who holds them; nobody knows what problem there is there," he said.
"We have got to get some regulation on these swaps," he added.
Trillions of dollars have been invested in other shaky bonds and other financial documents, he said.
Peterson and some allies think the federal government should be given more freedom to buy interest in some of the troubled financial institutions and to snatch up some mortgages.
Before the vote, the western Minnesota congressman said, "I didn't get any calls from back home on this."
But after the vote, he added, "now people are complaining, asking why didn't I protect their 401K."
Many congressmen said they received more calls, e-mails and letters on the bailout issue than anything else in recent years.
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State Capitol reporter Scott Wente contributed to this story.