Virginia Delegation Braces for Bailout Vote (Again)

Media General News Service
Published: October 2, 2008

WASHINGTON- Amid thousands of calls from constituents, Virginia House members opposed to a Wall Street bailout gave no indication Thursday they would reverse course and vote in favor of the plan.

The plan to allow the Treasury Department to spend $700 billion to buy bad mortgage-backed assets clogging the credit markets sailed through the Senate Wednesday with an extra $108 billion in tax breaks for businesses and the middle class as well as natural disaster aid. It is expected to come before the House Friday.

The add-ons are aimed at winning votes from House Republicans, two-thirds of whom rejected a bailout measure Monday.

Opposed to the bailout are: Rep. Robert C. Scott, a Democrat, and Republican Reps. Virgil Goode, Rob Wittman, Thelma Drake, Bob Goodlatte and Randy Forbes.

Scott said despite the changes, the fundamental principles behind the Senate bill appeared to be the same as those he opposed Monday.

“There is no suggestion as to how the expenditure of $700 billion will solve the problem at hand,“ Scott said. He raised concerns the government would overpay for worthless assets and possibly buy them from solvent banks that do not need the government’s help.

Opponents of the bailout complained on the House floor Thursday that the Senate version included too many tax provisions not aimed at the economic crisis, including tax breaks for Puerto Rican rum and toy wooden arrows.

Manufacturers of the 30-cent arrows would be hit with a tax intended for more expensive weaponry without the change. Virginia and eight other states have companies that would benefit from the provision, according to Senate staff.

“I’m still not persuaded this is the wisest way to spend $700 billion,“ said Forbes, R-4th, who compared the add-ons to ornaments on a Christmas tree nobody wants.

“We’d like to have all those ornaments passed, but just not have the tree,“ he said.

Rep. Tom Davis III, R-11th, still urged his colleagues to vote “yes.“

“The price just went up,“ he said. “The financial meltdown on credit would just be crippling (without it).“

The Senate bill would increase the federal insurance for bank deposits to $250,000 from the current $100,000 and add aid for rural education.

“I think most of the provisions are improvements,“ said Rep. Rick Boucher, D-9th, who voted for the bailout Monday and plans to vote “yes” Friday.

The bailout votes have generated enormous constituent interest, jamming phone lines and crashing House Web sites.

When Robert Reynolds, of Richmond, tried to call the Capitol switchboard to reach Sen. Jim Webb’s office Wednesday night, “it just rang and rang and rang.“

“I felt he should not vote for that bailout. I think it’s really wrong,“ said Reynolds, an out-of-work painter. Webb, a Democrat, and Sen. John Warner, a Republican, both voted for the Senate bill.

A spokesman for the Sergeant-at-Arms, which oversees the Capitol switchboard, said the phones are always on and callers should simply stay on the line.

Wittman’s office reported receiving 3,000 phone calls on the issue through Thursday.

“In the last 48 hours, we’ve received over 1,000 emails,“ said Wittman, R-1st. “The vast majority of my constituents are opposed to this legislation and they’re letting me know.“

Boucher said his constituents now appeared more evenly split on the issue.

“People are beginning to understand that acting is necessary to freeing up the flow of credit and ... preventing job losses,“ he said.

Scott said callers’ opinions fluctuated with Wall Street.

“If the stock market’s down they were telling us to pass it,“ he said. “If the stock market’s up they’re telling us to kill it.“

(Neil H. Simon can be reached at (202) 662-7669 or .)