Despite close vote, Missouri's U.S. Reps strike down bailout

Missouri's delegation was split 5-4.

By Andrew Denney

Published Sept. 30, 2008

Correction appended

On Monday, the House of Representatives rejected President George Bush's proposed bailout plan of the country's financial institutions, causing stock prices to plummet and pessimism about economic futures to rise.

The Missouri delegation in the House voted 5-4 against the proposed $700 billion measure, but party affiliation was not a watershed in the vote by the representatives.

Republicans voting against the bill, which is called the Emergency Economic Stabilization Act, were Reps. Kenny Hulshof of Columbia, Todd Akin of St. Louis County and Sam Graves of Tarkio.

Hulshof said in a news release he opposed the measure because it grants too much regulatory power to Treasury Secretary Henry Paulson and said the cost of the measure is excessive.

"Economic uncertainty is being felt in every corner of the country," Hulshof said in the release. "Americans are understandably anxious about the value of their homes, investments and retirement accounts."

Democratic Reps. William Lacy Clay of St. Louis and Emanuel Cleaver of Kansas City also voted against the bill, while Democratic Reps. Russ Carnahan of St. Louis, Ike Skelton of Lexington, Republican Rep. JoAnn Emerson of Cape Girardeau and House Minority Whip Roy Blunt supported the bill.

Cleaver spokesman Danny Rotert said the congressman opposed the measure because there was no consensus between the parties on the bill.

The bill failed with a 228-205 vote, with only 65 of the House's 200 Republican members voting for the bill.

Rotert also said Cleaver thinks the bill needs more protections for taxpayers.

"He believes this legislation to be the most significant since 1930," Rotert said. "That magnitude of legislation cannot be a one-party piece of legislation."

Skelton, chairman of the House Armed Services Committee, said in a news release on Monday that a faltering U.S. economy could "undercut America's global military and diplomatic strength" and said it would be harder to address "international challenges."

"The economic crisis is real," Skelton said. "Cash flow in the market has slowed, and some of America's top financial firms have failed. If action is not taken immediately, experts warn that the average American, including those in rural Missouri, will find it difficult or impossible to obtain credit for a mortgage, a car loan, a farm loan, a college loan, or a small business loan, bringing economic activity to a standstill."

The bill, proposed to Congress by Bush last week, received the support of leaders of both parties in the House.

On Monday, the Dow Jones Industrial Average fell 777 points after the failure of the measure.

The bill would have provided the Treasury with not only $700 billion to buy assets from financial institutions to promote the flow of credit, but also with the authority to rework "troubled" mortgages to help homeowners keep their houses.

To keep the Treasury in check, the bill would have provided funds to the department in installments, which would be subject to approval by the president.

In addition, the bill would have established an oversight board and an inspector general to oversee the Treasury, and would have stripped tax credits from businesses that receive funding from the buyout for giving bonuses to their executives.

Chris Sanders, vice president of Allied Mortgage in Columbia, said the measure would have acted like a "stabilizing feature" on the economy, and would have put taxpayers at a minimum amount of risk.

MU management professor Karen Schnatterly said students could soon begin to see the effects of the stumbling economy in rising interest rates for credit cards, auto loans and student loans. She said that, in attempting to obtain student loans, lenders will take a closer evaluation of borrowers' credit scores and might make fewer funds available for lending.

"It will be harder to get that money, and when you do, you'll be paying a higher interest rate," she said.

Schnatterly said she expects unemployment to rise in the next month - not just in the financial sector, but across the board - and that America's financial woes could soon be felt in international markets.