U.S. Rep. Jay Inslee (D-Bainbridge Island) was one of just 95 Democrats who broke ranks and voted against Monday’s $700 billion Wall Street bailout.
Inslee was the only member of the Washington State Democratic delegation to vote against the bill. Indeed, one of his Democratic colleagues, Rep. Adam Smith (D-Tacoma), said: “Failure to act by Congress could turn a severe economic slowdown into a panic—a run on banks and all financial institutions that could plunge us into a deep and lasting recession.”
I spoke with Rep. Inslee on Tuesday to ask him about his rebellious vote. For starters, given that he voted ‘No,’ I asked him if he thought Rep. Smith was wrong? Did Inslee think it wasn’t really 1929? (His aide jumped in to let me know the stock market was up 485 points.)
Inslee said, “There is a risk that is real. We could have a substantial reduction in availability of credit. I think that risk exists. But that doesn’t mean any bill will do.”
So, what was wrong with the bill, and did he have an alternative plan?
More important: If the Democrats couldn’t even pass a tempered Democratic rewrite of Bush’s original bailout, did Inslee really think they’d be able to pass something that a diehard liberal like himself could eventually support?
Inslee laid out three problems with the bill.
1. He said it was “based on deficit spending,” and he could not support any more of Bush’s “exploding” deficit.
“It’s strike three,” Inslee said, adding it to a list that included Bush’s war in Iraq ($600 billion) and the Bush tax cuts.
2. He said the bill was missing any “hard provisions” to guarantee that the public would get a return on the $700 billion loan. “We’re increasing the value of these corporations,” he said. “When we do that we should have defined shares, a defined X number of dollars in equity. This bill does not do that. And knowing the history of the Bush administration, they’re not going to be aggressive about ensuring [we get a return].”
3. Finally, he said the bill didn’t address the real losers in 2008, not Wall Street , but middle class homeowners who were facing foreclosures. “The only way to do that is through bankruptcy courts,” Inslee said. “We have to change the rules,” so borrowers, in concert with lenders, are able to rearrange the terms of loans.
And is there the will or the votes on the Democratic side to do any of this?
Inslee said: “We get more Democratic votes if we do that.”
Monday’s vote was 228 to 205. 133 out of 198 Republicans voted against the bill. 95 out of 235 Democrats voted against it. One Republican didn’t vote. So, technically Inslee is right: The Democrats have numbers.
Chastising Democratic leadership, Inslee said: “A decision was made to get 100 or 80 Republicans to vote for it [65 Republicans voted for the bill]. That eliminates the necessity to do a good bill.” Inslee asks rhetorically: “And did we have a good bill?”
Inslee went on to say, in fact, that the Democrats had the leverage at the moment because “the President has to sign” a bill. “We have the power to negotiate with the White House.”
Asked to distinguish his ‘No’ vote from the 133 Republicans who voted against the bill, including all three Washington State Republicans—Reps. Dave Reichert (R-Auburn), Doc Hastings (R-Pasco), and Cathy McMorris-Rodgers (R-Spokane), Inslee said he couldn’t speak for his GOP counterparts.
However, a consistent theme on the GOP side was an aversion to big government. In a statement to the press, Doc Hastings, for example, said: “On the question of increased government intervention in the marketplace, I am just plain opposed to such a massive intrusion into the economy and the marketplace.”
Inslee wants more regulation, not less.
Later in the day, I asked Inslee if the idea being pushed by presidential candidates Barack Obama and John McCain—higher limits for insured bank deposits—an idea that’s breathed life into a Senate version (and that’s intended to make the House reconsider)—would win him over.
His aide gave me this response: “That would be a step in the right direction, but he says he will make final decisions on his vote only after he sees the whole package. Higher FDIC credits could be an element of the new deal, but the Congressman and his colleagues are wrestling with a lot of other promising suggestions out there right now, too. His vote will depend on what the final package includes.”
Rep. Inslee’s webcasting bill (a bill that clears the deck so Internet radio sites can re-negotiate royalty rates with the recording industry) passed the Senate today. It passed the House last Saturday. It’s off to President Bush’s desk for a signature.