House Passes Bailout Plan, Now What?
MICHEL MARTIN, host:
I'm Michel Martin and this is Tell Me More from NPR News. Coming up, three comics who mine the humor in their experiences as Muslims in post-9/11 America. My conversation with the stars of the new film, "Allah Made Me Funny." That's later in the program.
But first, it was the $700 billion question, but was it the right answer for the nation's financial problems? The Emergency Economic Recovery Act of 2008 is now law. The enormous rescue plan for the financial services industry passed Congress and was quickly signed by the president on Friday after a whirlwind week that included a dramatic defeat for the bill and then its revival at the end.
Joining us to talk about why lawmakers finally approved the plan and what it might mean for Wall Street and Main Street are two lawmakers who both changed their minds in the course of the week from no to yes, Congresswoman Donna Edwards of Maryland and Congressman Jesse Jackson Jr. of Illinois. They're both Democrats. They're both here with me in the studio. Thank you both so much for stopping in.
Representative JESSE JACKSON JR. (Democratic, Illinois): Thanks for having us.
Representative DONNA EDWARDS (Democratic, Maryland): Thank you. It's great to be here.
MARTIN: Congresswoman, I want to start with you because you're a freshman - you're a freshwoman serving your first term. You just were elected in June in a special election, so in many ways this is really your first big vote. Many people are calling it a legacy vote, the kind of thing that people are going to remember. Was it nerve-wracking?
Rep. EDWARDS: It was a big vote and a tough vote, too, very complicated, and obviously, you could see from my vote at the beginning of the week to the end of the week and everything in between that it was complicated to figure out. And I think it, you know, whether it is the legacy vote, I think, you know, we'll wait and see. But clearly it was a vote that was very important to people's lives.
MARTIN: And so tell me, why did you initially oppose the bill and what made you change your mind?
Rep. EDWARDS: Well, I mean, there a number of things. Number one, I felt like many across that country that, you know, most of us felt that we didn't really cause the Wall Street mess. In fact, that there were people who gained the system, who took advantage of the system and took advantage of unsuspecting people, folks who just wanted to be homeowners, and that it wasn't fair for all the rest of us to have to pay for it. But very clearly, by the end of the week, hearing from additional economists, hearing from folks in my district, small business owners who were unable to make payroll and felt that they might be in a situation of laying off employees and pension plans falling, we had to do something.
MARTIN: Congressman Jackson, what about you?
Rep. JACKSON: At the foundation of this crisis, we have to have a face on it. Well, in my case, it's Mildred Howell(ph), age 64, who for 40 years made her mortgage payments consistently on her home, and by making her mortgage payments with her husband, her husband and her fell into a financial situation where they needed some of the equity out of their home. He was subsequently beaten, robbed, and at age 79, he died. Put even more pressure on Mrs. Howell to get some money from the bank, so she went and sought a reverse mortgage. ..TEXT: MARTIN: Is she a constituent of yours?
Rep. JACKSON: She is. And Mrs. Howell was then steered to the subprime market, and now at age 69 years old is facing foreclosure. And Mrs. Howell deserves the exact same kind of Thanksgiving that members of Congress are going to enjoy and that members of Congress are going to enjoy for Christmas, but she's facing foreclosure and facing homelessness.
And the House of Representatives, from my perspective, the People's House is under an obligation since we're so close to the people, to make sure that the product that leaves the House includes Mrs. Hunter, includes Mrs. Howell, includes Mrs. Sandra Bullock and others who are facing foreclosure. I didn't feel that the product that left the Congress of the United States after Secretary Paulson presented the Congress with the unprecedented bailout plan and then the improvements made by Speaker Pelosi and the improvements made by Chairman Frank included the Mildred Howells of life, and so that vote got a no. It served a no. And that was the question that was being asked. Could we have produced in the House a better product to include people like Mrs. Howell?
The Senate product, however, presented to us a week later, raised a completely different question: to have a recession or not? An unprecedented, protracted recession but unprecedented foreclosures, unprecedented unemployment figures and layoffs, and what will the Congress of the United States do about it?
MARTIN: But wait a minute, well, how is it that different, except that it did have some more assistance for individuals in the sense that it raised the federal deposit insurance rate to 250,000 from 100,000. But it didn't offer the kind of direct assistance to homeowners that you and a number of other legislators were seeking. So what was so different from beginning to end?
Rep. JACKSON: Again, the People's House, where there are 435 members, I believe, are under an obligation to ask certain questions through hearings. Congress is a deliberately slow and unwieldy body by constitutional design so that people can have some input in the process. If ever presented with a disaster or financial crisis or any kind of crisis, Congress isn't supposed to respond in a week. It's not designed that way. So we have to go through hearings, we have to have the input of many members, which from my perspective, the initial House bill did not.
However, the Senate raises a different question even though it's almost the same bill. It comes back to the Congress a week after having listened to economists, listened to constituents, looked at the nature of the credit crisis, looked at unemployment crisis.
MARTIN: How about that 700, almost 800 one-day point drop on the Dow? Did that have something to do with it, too?
Rep. EDWARDS: You know...
Rep. JACKSON: Of course, obviously. Of course, it did. And the uncertainty in the market and the idea that banks and others were not lending money to small businesses, and the fact that this is the fourth quarter, where many American businesses expect unprecedented to make their profits, to make their margins, and the fact that this fourth quarter has fundamentally shattered consumer confidence, it clearly raises questions about the unprecedented nature of bankruptcies in January and February coming in the first quarter of next year.
MARTIN: If you're just joining us, we're speaking with Congressman Jesse Jackson Jr. of Illinois and Representative Donna Edwards of Maryland about their role in passing the $700 billion financial rescue package. Congresswoman, both of you and Congressman Jackson in your statements describing your decision to change your vote talked about the fact that you both heard from Democratic presidential nominee Barack Obama. What did he have to say that was persuasive?
Rep. EDWARDS: Well, I think my conversation with him was actually really important to my decision making. I mean, one of the things that he pointed out was - you know, by the time we got to Friday and we had the Senate bill in front of us, we were facing the circumstance where we'd have to, you know, we'd have to leave Washington with this blank space between now and whenever we return and the challenge of the economy, and I think that I supported the idea that let's get us to who I believe is going to be a new president with a new secretary of Treasury and a new Department of Justice and Attorney General, too. It will look back at some of what I believe must be some criminal behavior behind that, and I think that was really important to me.
But I'd also say, I mean, one of the things that I had an opportunity to do is to - in the debate of the bill on the floor of the House after return from the Senate, to really probe the question of the authority of the secretary of Treasury, because if we have a secretary of Treasury, who I believe has the authority in this legislation as we passed it, to deal directly with homeowners, and I got that clarification. The question is how much pressure can we put on Secretary Paulson to make that happen? Because like Congressman Jackson - I mean, in my congressional district, we're facing some of the highest rate of foreclosures in our state in Maryland, in my congressional district.
MARTIN: And so I wanted to ask you, what did you hear from constituents over the course of the week?
Rep. EDWARDS: It was a mixed message, frankly. I mean, over the course of the week, clearly, there were people who were concerned about taking money out of the pockets of the middle class to pay for this bailout. But also, folks who have pension plans that, you know, is the only thing that they rely on, and imagine some of them even imagining that if they had their Social Security in the private market, that they would have nothing today, and so they were concerned about that.
But I also heard from our small businesses, a fellow in Gaithersburg, Maryland, who owns a bookstore said, you know what, this is putting me in a really bad circumstance. Business leaders who were saying, you know what, we've had deals close down just during this last week, because retailers were afraid to open up new stores. And, you know, the guy who owns a barbershop saying, I don't think I can make payroll by the end of the week.
And so that caused me to, you know, to look at the product that was in front of us, see some marginal improvements in it, get some clarification about the authority of the secretary of Treasury, and say, you know what, this is a first step. It's not a last step. We have to deal with bankruptcy and we have to deal directly with homeowners who are facing foreclosure.
MARTIN: Congressman Jackson, you made a similar point in your release. But what if Barack Obama is not elected?
Rep. JACKSON: Well...
MARTIN: Are you going to feel like your vote was a mistake?
Rep. JACKSON: I don't think so. I think some of the fundamental issues and some of the fundamental uncertainty that exists in the economy at this hour and at the hour that Congress passed that bill, certainly suggests that something had to be done. Before Monday, probably 100 percent of the calls to my office were against the idea of bailing out, the $700 billion transfer. By the end of the week, I think it was 60-40 against. People had come to the realization that something has to happen.
Again, my strongest objection was that the People's House was under an obligation to look after little people. In this process, people are being crushed by the very nature of the problem. Here's a classic example. I offered an amendment to the bill, which was not - I don't believe accepted in the House version of the bill - that would have guaranteed that anyone who has faced foreclosure over the last year or last two years, anyone who's been a victim of Hurricane Ike, their homes have been devastated and by definition they don't have a residence, that they'd be allowed to vote on November the 4th. This provision was not allowed to be in the bill.
Well, this doesn't need to be a November 5th conversation. This needs to part of something the president of the United States will sign right now. That's a part of what comes from a thoughtful House exercising its thoughtful processes.
MARTIN: I got an email from a fellow member of the House, a Democrat like you who is also a member of the Congressional Black Caucus, who voted no initially and continued to vote no, and he said that, you know, the leadership in the administration spent many days scaring the country about what would happen if they didn't support the bill but not explaining how this bill would actually fix the problem. Are both of you satisfied that this bill will actually fix the problem?
Rep. JACKSON: I think this is the beginning of a very lengthy and very troubling process. The big three auto manufacturers are already on Capitol Hill seeking help because people are not buying cars in the fourth quarter. And the implications of one of the big three going out of business in the first quarter or second quarter of next year could be millions of unemployed people.
MARTIN: So you're not sure. Donna Edwards?
Rep. EDWARDS: I'm not sure. In fact, I said that even as I cast my vote for the bill, the Senate bill. But what I will say is that this is beginning of a process. We know that we have to be on the route to regulate this system again. A fall to - you know, a failing of regulation has contributed to this problem. We also have to have a deeper understanding of the impact of what we do here in the United States on the global markets. And so there's a lot more work to be done, and I'm waiting for Congress to get back into session so we can begin.
MARTIN: Thank you both so much for taking the time to stop in and talk with us today. Donna Edwards represents Maryland's fourth district in Congress. Jesse Jackson Jr. represents Illinois' second district. And they were both kind enough to join me here in our Washington studios.
We want to hear from you also. Did you call your member of Congress? Were you happy with the way they voted on the bailout? To tell us more, please call our comment line at 202-842-3522. That's 202-842-3522. Or you can go to our Web site at npr.org/tellmemore and blog it out. Congresswoman and man, thank you so much for joining us.
Rep. JACKSON: Thanks for having us.
Rep. EDWARDS: Thank you.