U.S. Rep. Phil Hare, D-Rock Island, believes the $700 billion rescue plan to shore up financial markets was doomed from the day it got labeled a bailout.
During a tele-conference with reporters on Tuesday, Hare said the money would have been a five-year "loan" from the Federal Reserve. The debt incurred by the federal government would have the value of the properties held and could be sold as the markets recover. Some financial responsibility also would have fallen on the companies receiving help.
In addition, Hare said CEO’s would have been banned from receiving those golden parachute bonuses and stock options.
"We should have never had to come up with $700 billion," Hare said, adding that he believes the rescue plan was "better than doing nothing."
That viewpoint did not carry the day on Monday.
The plan failed 228-205 in the U.S. House during the afternoon. The stock market fell dramatically, with the Dow Jones industrials suffering the largest point loss ever. The Dow bounced back somewhat today, but remain more than 4 percent lower than before Monday’s trading.
Hare pointed to the $1.2 trillion loss in stock value as one of the reasons he was willing to support a $700 billion plan that would have been at least partially repaid. One constituent called to say her 401k holdings had fallen $100,000 in a single day due to the plan’s failure, Hare said.
Congressional leaders have told House members to return to Washington for a Thursday session. President Bush has been meeting with caucus leaders to craft a new proposal that might come up for a vote within days.