Lawmakers: Main Street spurred yes vote

Troubles on Main Street, not losses on Wall Street, spurred U.S. Sen. Kit Bond and U.S. Rep. Jo Ann Emerson to vote in favor of the $700 billion rescue package, the two Republican lawmakers said Monday.

After taking part in the dedication ceremony for the new U.S. courthouse, Emerson and Bond, in separate interviews, said they were pushed to approve the bank rescue plan by insight from economists and reports from constituents that credit was drying up.

In the first full trading day after the bailout passed, stock markets worldwide reported heavy losses for investors as stock prices plunged. There was no immediate sign of credit loosening, as interbank interest rates remained abnormally high and European governments moved to shore up shaky banks there.

Emerson, R-Cape Girardeau, who voted for both the bill that failed last Monday and the final version that passed on Friday, said the explanation of what would take place if the bill failed was too scary to contemplate.

"I don't like to talk like that because I don't like to scare people, but they scared us," she said of a series of meetings she and a group of colleagues conducted with economists to gain insight into the problem.

The $700 billion bailout portion of the bill passed last week will allow the U.S. Treasury to purchase mortgage-backed securities banks eagerly purchased just a couple of years ago. As foreclosures mounted and the quality of those securities has been called into question, the ability of banks to sell them in order to raise capital has evaporated. The result has toppled major investment companies Bear Stearns and Lehman Brothers, caused the forced sale of Washington Mutual and led to the imminent takeover of Wachovia Bank.

The bill passed Friday also included numerous tax breaks targeted at particular industries and a one-year fix to prevent the alternative minimum tax from hitting middle-class families.

Within the Eighth Congressional District, Emerson said she has spoken with a businessman in Rolla, Mo., who was told by his bank he must repay a $980,000 line of credit despite no missed payments and a Cape Girardeau businessman who was refused a bank loan even though he has a strong credit history.

"At the end of the day, the easy vote was a no vote," Emerson said. "The easiest vote was a no vote. You don't know if it is going to work No. 1, and on the other hand, for me, it was, you know, if I am defeated for election over this that is all right. Our economy and keeping jobs and allowing rural America to continue prospering is worth it to me."

Joe Allen, a Forsyth lawyer who is running on the Democratic ticket against Emerson, is seizing on the bailout as an opening to voters. He has raised little money, but he has been crisscrossing the district throughout the year and on Monday issued a news release denouncing the bailout.

"Our people here in Southern Missouri cannot understand why Jo Ann Emerson would force us to pay off Wall Street gambling debts," Allen said in the prepared statement. "Wall Street is not a sure thing. These Wall Street types asked for, and then gambled on very risky financial instruments and lost. It is they who should pay off their gambling debts, learn a lesson and not make the same mistake again."

Bond, who is up for election again in 2010, said he, too, believed the bailout was needed to avoid "a Main Street crisis."

The problems caused by failing credit markets mean real job losses, Bond said. Kansas City is having trouble finding a market for $200 million in bonds, he said, and the state of Missouri was forced to alter an $800 million bridge rehabilitation project because the contractor could not find financial backing.

The stock markets remain pessimistic, Bond said, because it will take time to stabilize credit markets and restore capital stocks of banks enough to allow a smooth flow of money.

"We are hoping this can be put into effect in less than a couple of weeks," Bond said. "There is just a promise and it hasn't hit yet. This credit crisis has caused great uproar and has really slowed the economy down."

rkeller@semissourian.com

335-6611, extension 126

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