Tuesday, Sept. 30, 2008 | 2 a.m.
- Nevada delegation split as House rejects bailout plan (9-29-2008)
- Stocks tumble as House votes on plan (9-29-2008)
- Among themselves, conservatives start asking: What went wrong? (9-28-2008)
- What we can expect - and who to blame: In Las Vegas (9-28-2008)
The intensity of populist outrage over bailing out Wall Street at the expense of Main Street created an unusually odd alliance among Nevada’s lawmakers.
Democratic Rep. Shelley Berkley and Republican Rep. Dean Heller, both facing angry calls from voters back home, opposed the $700 billion bailout bill that their leaders had hoped would produce a bipartisan compromise.
Only Nevada’s Rep. Jon Porter, a Republican facing the most difficult reelection of his career, voted for the bill.
“For those who aren’t able to see this, they’re blind,” he said of the threat to the economy if the bailout does not occur. “I’m hoping they will open their eyes.”
The far-reaching proposal would buy up Wall Street’s bad mortgage-backed securities in an unprecedented government intervention in severely distressed markets. Congressional negotiators had worked through the weekend to strengthen the original Bush administration plan with greater taxpayer protections sought by both the left and the right, but for many representatives, it wasn’t enough to counter calls from home.
As lawmakers watched the floor vote Monday afternoon in a tense and dramatic debate, a New York Democrat thrusting his finger at Republicans shouted across the chamber: “600 points!”
That’s how much the stock market was nose-diving as the 1:30 p.m. vote was under way. The country watched, stunned, as retirement funds and investment accounts crashed. The market was down more than 770 points by the final bell, the biggest plunge in history.
Porter said that after the vote, calls to his office switched and constituents thanked him for backing the Wall Street rescue plan.
“I voted yes because I thought it was the right thing to do,” Porter said. “I don’t trust Washington. I don’t trust Wall Street, but I do trust that we need immediate action.”
Monday’s vote had been expected to be close, but after the weekend announcement of a deal and the dire predictions of economic collapse coming from the White House, leaders were hopeful.
But rank-and-file Republicans disassociating themselves from their party and the unpopular Bush administration in an election year had never fully embraced the bailout plan. For conservatives, it goes against their deep philosophical belief in free market economics.
Heller issued a statement saying he would support a bill that “allows the market to correct itself.”
But as much as Democrats want to blame Republican leaders for failing to bring their members onboard, there is a broader story of discontent brewing among the ranks of both parties back home.
In Nevada, Democratic challengers of Porter and Heller said they would also have voted against the bill.
State Sen. Dina Titus, who is running against Porter, issued a statement saying the bill “lacks critical provisions to provide needed regulation of the mortgage market or help for families facing foreclosure.”
Heller’s opponent, Jill Derby, sided with him in opposing the bill but blamed him for not playing a greater role in forming a workable compromise via his seat on the Financial Services Committee. “We’re all really reeling from what happened,” said Derby, a former university regent. “The failure to come up with a compromise solution really just let the country down. I blame the Congress for not being able to do that.”
Berkley was the first of the Nevadans to vote. Almost as soon as she did, she was out the door and on a plane to Las Vegas for the Jewish holiday that will close Congress today.
Her absence made her unavailable as party leaders scrambled looking for lawmakers who would switch.
Berkley’s chief of staff, Richard Urey, said it didn’t matter when she left. “She wasn’t going to have her mind changed,” he said.
Berkley could not overcome her skepticism that the Bush administration was leveling with Congress about the extent of the crisis, Urey said. She still smarts from civil rights abuses that happened after the Patriot Act, which was swiftly approved by Congress with Bush’s urging after 9/11.
She also wasn’t convinced the legislation was as strong as it could be to protect taxpayers. In particular, she said she wanted tighter provisions for taxpayer ownership of the companies and limits on executive pay. She also wanted greater oversight.
“This seemed to the congresswoman to have an eerie ring to previous matters the Bush administration tried to hustle through Congress,” Urey said.
Still, it was surprising to see a lawmaker who votes with her party the great majority of the time go against the grain. She was among 95 Democrats, many from the left, who voted no.
Does she — or Heller — feel responsible for the historic Wall Street dive?
“You hate to see it happen, but I think everybody knew if this bill didn’t happen today, stock prices would go down,” Urey said.
On the opposite end of the political spectrum is Heller, who is among those conservative Republicans who could not bring themselves to agree to a market intervention.
The bill was bolstered with provisions to satisfy the conservative flank, but still they fled. Last week, Heller said he feared the bill bordered on socialism.
“I cannot with good conscience put Nevada’s taxpayers on the hook for the foolish excesses of Wall Street,” he said in a statement Monday. “This legislation will not help Nevada’s middle-class families, small businesses or economy.”
Porter is not the kind of lawmaker who is always accessible to the press. But after Monday’s dramatic vote, he held forth with reporters, railing with passion and frustration that the time to act had come and gone.
“My constituents in Nevada are hurting, my constituents are frightened, my constituents are angry,” Porter said in a conference call. “Nevada is facing one of the worst economic downturns in our history.”
Porter joined just 65 Republicans to vote yes.
Congress is out today for the holiday, but the stock market will be open, negotiations will continue on the Hill — and the telephones will keep ringing.
Sun reporter David McGrath-Schwartz contributed to this story.