Baird confident bailout plan can be tweaked, passed

U.S. Rep. Brian Baird caught a plane home to campaign Monday after the House failed by 23 votes to pass a $700 billion financial bail-out plan.

But before he left, the Vancouver Democrat, who voted for the measure, said he’s confident it can be tweaked and will pass, possibly within days. “We adjourned, but we’re subject to the call of the chair,” Baird said.

It appeared late Monday that the House would reconvene Thursday.

Baird said last week that he would support a taxpayer rescue of financial markets only if it held responsible parties accountable, guaranteed independent oversight and specified how the $700 billion price would be paid. He said Monday the version of the bill the House voted on Monday satisfied those conditions.

Baird said he was particularly pleased that the measure included a pay-back provision he co-sponsored with U.S. Rep. John Tanner, D-Tenn. The provision, endorsed by 38 House Democrats, would require financial firms to repay American taxpayers in full, through a fee or tax, if their investments made no profit after five years. If profits were realized, taxpayers would share in those profits.

“The most important thing is the language that ensures that taxpayers won’t be left holding the bag,” Baird said. “That language helped win votes.”

In a statement just after the vote, Baird said significant progress had been made since Treasury Secretary Henry Paulson floated a three-page bill a week ago.

“This wasn’t a perfect bill, but the economic situation is daunting,” he said. “In the past few days, Congress was able to take an unacceptable proposal and mold it into something that would have made the best of a bad situation. Leaders from both parties had worked together in historic fashion over the past week to draft bipartisan compromise legislation.

“Unfortunately many members couldn’t get on board. In just the past few minutes, we’re already seeing the results on Wall Street.”

Baird acknowledged in an interview that the 778-point drop in the Dow Jones industrial average Monday was causing high anxiety back home on Main Street.

His advice?

“Hold your breath. People are quick to point fingers. Stay relatively calm. The drop in the market sends a message. We are not that far apart.”

Opposition to the Economic Recovery Act of 2008 fell into three camps, Baird said.

“One group doesn’t want any government involvement in the financial markets whatsoever,” he said. That group included Rep. Ron Paul, R-Texas, the libertarian former presidential candidate.

A second group, mainly Republicans, pushed for changes in the way assets would be valued under the rescue plan, he said.

Democrats opposed to the legislation, including some of Baird’s colleagues in the Northwest delegation, wanted more protection for overextended homeowners. Some argued for giving bankruptcy judges the power to renegotiate the principal due on mortgage loans, Baird said, but community banks objected to that provision.

“This was caused by investment banks, not community banks,” he said. “If we are required to lower the principal, who ends up paying are all the other people who are paying back their principal in full.”

Baird said the vote at least clarified where changes in the bill are needed.

“You never knew who would go yea or nay until you had the vote,” he said. “Now that we know, we can talk to them.”

Republican Michael Delavar, who is running to unseat Baird this November, has blamed the financial meltdown on the Federal Reserve for keeping interest rates “too low for too long” and threatening the nation’s solvency.

Kathie Durbin covers politics and the Legislature: 360-735-4523 or
kathie.durbin@columbian.com.