Voters vented, lawmakers listened
Dale Klotz’s business repairing power tools took a nose dive when foreclosure signs sprouted up on lawns across the northern suburbs of Denver here.
He’s looking for a second job, and he wishes he wasn’t saddled with a mortgage. But amid the hard times, he took some satisfaction Tuesday in the House’s vote to turn down President Bush’s $700-billion rescue package for the financial system.
“I don’t think we ought to bail out Wall Street,” Klotz, 45, said as he loaded groceries into his white Ford pickup at a shopping center. “I’m an average American, trying to make a living. I’ve got a home mortgage I’d like to unload, but I make my payments every month.”
Why, he asked, should his tax dollars go to save reckless Wall Street executives?
Sentiments like that fueled this week’s rebellion in the House, where members bucked party leaders and the Bush administration to block approval of the rescue package.
Election-year politics also played a role, analysts say. Klotz’s representative, Rep. Marilyn Musgrave (R-Colo.), is locked in a tight reelection battle and said she heeded the views of her constituents in voting against the bailout Monday.
“It’s not a moment at which people can put the national interest ahead of constituent interest,” said Robert Loevy, a political science professor at Colorado College.
According to one count, 30 of the 38 representatives in the most competitive Nov. 4 House races voted against the bill. Americans have bombarded members of Congress with calls and e-mails urging “no” votes, causing some computers on Capitol Hill to crash repeatedly over the last two days.
Organizations such as ACORN, or Assn. of Community Organizations for Reform Now, a national advocacy group for low-wage workers, organized rallies outside Federal Reserve offices in Los Angeles, San Francisco and other major cities.
“You look at an electoral battleground map and you are looking at Nevada, the foreclosure capital of the country, and Michigan and Ohio and Florida,” said Austin King, director of an ACORN center in New Orleans. “These swing states have tens or hundreds of thousands of foreclosures. Voters there want to see something done that helps them, not just Wall Street.”
On Monday, the opponents got their wish: The House rejected the plan. But stocks cratered, with the Dow Jones industrial average diving 777.68 points -- a gut-wrenching experience for almost everyone with stocks, mutual funds or 401(k) retirement funds.
Stocks regained much of their losses Tuesday, but that wasn’t the only twist -- as some congressional officials said they detected growing support for some kind of rescue plan.
Rep. Diane Watson (D-Los Angeles) said she voted against the bailout Monday after her office was swamped over the weekend with more than 1,000 calls on the plan, with just two of those in support.
But Tuesday, after attending a funeral at First African Methodist Episcopal Church in Los Angeles, Watson said she was besieged by people demanding to know what she was going to do to get the economy back on track.
“These are teachers, nurses, regular working people, and they’re worried about their 401(k)s, their jobs, the whole economy because they don’t understand how this is all going to work,” Watson said.
Watson’s urban district bears little resemblance to Musgrave’s 4th Congressional District in the eastern part of Colorado, which is dotted with ranches and tiny agricultural settlements.
Most of that district’s population, however, is in the exurbs at the northern edge of the Denver metropolitan area. Some of those cities had the nation’s highest foreclosure rates before last year’s housing bust kicked rates even higher in parts of California and other states.
A former schoolteacher and small-business owner who was first elected to Congress in 2002, Musgrave is a staunch social and fiscal conservative who narrowly won reelection in 2006. She is considered one of the most vulnerable incumbent House members this year.
Floyd Ciruli, a Denver-based pollster, said the district is populated by people inherently unsympathetic to the proposed bailout.
“Fiscal conservatives; small-government, anti-government ideologues,” Ciruli said. Musgrave “has both a good sprinkling of those individuals in her district, and she has a personal philosophy like that.”
Even residents with starkly different politics were unenthusiastic about the bailout.
“If people who were being rescued are like you and me, working hard every day and struggling to make ends meet, that’s one thing,” said Roni Lavine, 61, a Longmont meeting planner with an Obama pin on her purse. “People are really angry that they’re losing their homes and they see these corporate executives walking out with millions of dollars.”
Still, some were unnerved at the package’s failure and eager for some action.
“There’s a perception out there it just relates to a bunch of people in New York, on Wall Street,” said Mike Preigh, a 42-year-old chemist. “But it all flows downhill. . . . Doing nothing is probably worse than doing something that’s not great.”
Musgrave announced her opposition to the bailout on Sept. 23, the day Treasury Secretary Henry M. Paulson presented the plan to Congress.
Her spokesman, Joe Brettell, said Musgrave was not moved by politics but by the people she represented. “The congresswoman looks at her district first, and she really feels she made the right decision,” he said.
On Tuesday, Musgrave said she was not concerned about the huge stock sell-off that followed Monday’s rejection of the bailout plan.
“We don’t answer to Wall Street,” she said in an interview on “Good Morning America.” “We answer to Main Street. We answer to our constituents.”
Later Tuesday, however, Musgrave was huddled in meetings as negotiators worked to craft revised legislation expected to go to a vote in the Senate tonight and in the House on Thursday. “It is important,” she said in a statement, “for people around the country to know that we are actively working toward a solution to this problem.”
Riccardi reported from Colorado and Heisel from California.