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Bay Area Representatives Vote For Bailout

WASHINGTON (BCN) ― Two Alameda County Democrats and another from Sonoma County were among the majority in the U.S. House of Representatives that voted by a 263-171 margin Friday to approve an unprecedented $700 billion government bailout of the financial industry.

The revised measure, which was passed by the Senate 74-25 Wednesday night, was signed by President Bush also on Friday.

Rep. Barbara Lee, D-Oakland, was among the majority in the House of Representatives that defeated a previous version of the bill on Monday.

But Lee voted in favor of the new version Friday, as did Rep. Jerry McNerney, D-Pleasanton, who also had voted in favor of the first version.

In a speech on the floor of the House before Friday's vote, Lee said she still thinks the bill "is a bailout" and "we should be honest about the fact that we don't know whether or not this bill will work."

But Lee also said, "We must be honest about the fact that we can't afford to risk the potential consequences of inaction" and California Treasurer Bill Lockyer told her this week "that people will suffer greater pain, including cuts to critical state funded services, if we don't do something to stop the hemorrhaging."

Lee said, "As a former small business owner, I understand that access to credit will make or break your business and without it people will lose jobs."

She added, "I have to say that I'm glad our fight helped slow this bill down. Because the bill before us today is a better bill."

Lee said, "This is a difficult vote but I'm confident it is the right vote."

McNerney said in a statement, "I am just as angry and frustrated as many of those who have called my office that we had to consider this recovery package. But I voted for it because my constituents' 401k plans, their life savings, and the ability to take out car, home and student loans hang in the balance."

McNerney said, "I've heard from ordinary people and small businesses all across my district that are feeling the effects of the declining availability of credit."

The congressman said one constituent called his office to let him know that his daughter may no longer be able to afford her education at the University of California, Berkeley because even though she was approved for a student loan the bank that had guaranteed it won't do so no longer.

Rep. Lynn Woolsey, D-Petaluma, voted in favor of the bailout bill after voting against the original version of the bill Monday before the U.S. House of Representatives.

Woolsey said the Senate-crafted bill is "a short-term plug, not a silver bullet" and "the first step, not the last."

"The new proposal includes several important changes to the House version, many of which are critically important to my district, such as providing AMT (alternative minimum tax) relief to millions of middle class families, extending tax credits to create millions of green jobs, and providing a $1,000 child tax credit," Woolsey said.

Raising the Federal Deposit Insurance Corp. insurance limit from $100,000 to $250,000 will help small community banks and reassure their customers their money is safe, Woolsey said.

Woolsey also said the legislation isn't as comprehensive as she'd like.

"It fails to provide protection for the millions of working families who are facing foreclosure and bankruptcy, and it gives too little oversight to the taxpayers who are being asked to foot the bill for the President's mistake," Woolsey said.

Woolsey said California needs access to credit to pay public servants, teachers, police and firemen.

"Today's bill alone will not solve this crisis, but I have no doubt of the consequences if we fail to pass it," Woolsey said.

California Gov. Arnold Schwarzenegger released a letter Friday that he sent to U.S. Treasury Secretary Henry Paulson saying that the state is experiencing trouble borrowing funds for its operations.

Schwarzenegger told Paulson, "California and a number of other state and local governments are experiencing the lack of liquidity in the credit markets firsthand."

He said, "Many states and local governments have been unable to secure financing for bond offerings and for routine cash flow used to make critical payments to schools, local governments and law enforcement."

Schwarzenegger wrote that while some states may be able to absorb a delay or obtain high-interest financing through private banks, California is so large that its short-term cash flow needs exceed the entire budget of some states.

The governor said the state expects to issue $7 billion in revenue anticipation notes for short term cash flow purposes in a public offering during the week of Oct. 13.

Schwarzenegger told Paulson, "Absent a clear resolution to this financial crisis that restores confidence and liquidity to the credit markets, California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal Treasury for short-term financing."

Lockyer said in a statement that if the state obtains a loan from the federal government it would mean that the state would pay interest to the U.S. Treasury instead of banks or investors.

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