Steamboat Springs Congressman John Salazar said Tuesday that he will not support a financial bailout bill without greater protection for taxpayers on the Western Slope.
U.S. Rep. Salazar, a San Luis Valley Democrat, voted against the financial bailout bill, titled the Emergency Economic Stabilization Act of 2008, on Monday. The congressman said that before he could throw his support to a measure intended to rescue the financial markets, he would need to see more specificity in areas including federal insurance of bank deposits, recoupment of taxpayers' investments and the cost of a bailout plan.
"I'm pleased I voted the way I did yesterday," Salazar said, "but we're still working hard, and we are dedicated to working something out in the next four to five days."
Salazar added that at least among constituents who took the trouble to contact his Washington D.C. offices late last week, opposition to the financial rescue measure was nearly universal.
"On Thursday and Friday, we had 636 calls and e-mails and 436 of them were against any kind of bailout. Those were 'no' and 'hell no,'" Salazar said. "I'm serious, they were angry."
Salazar's Third Congressional District includes Routt and Moffat counties in Northwest Colorado.
The rescue measure, touted by Treasury Secretary Henry Paulson as being necessary to get tentative credit markets working again, came up 13 votes short of the 218 needed to pass a vote in the House of Representatives on Monday.
The fallout was a 778-point drop in the Dow Jones industrial average Monday. However, Salazar pointed out that just before the markets closed Tuesday, they had recovered 485 points of that decline.
"It's not an issue of the sky is falling today if we don't" get something passed right away, Salazar said. "We have to do this right. We can't do it in a way that would cost the American taxpayer even more money."
Salazar said he was not under pressure from House Democratic leaders in the hours leading up to the vote.
He said that after talking to independent bankers in his district, which includes most of the Western Slope, he wants to see higher caps on the bank deposits that are eligible for federal insurance. Specifically, Salazar wants the caps increased from $100,000 to $250,000, a level he feels would make bankers and their customers feel more secure.
The FDIC has asked Congress for the authority to increase those limits, but stopped short of recommending a ceiling.
Salazar also wants provisions for mandatory recoupment of taxpayers' investments in the troubled securities the bailout dollars would purchase. If return on those investments falls short of expectations, Salazar is determined that Wall Street should ultimately make up the shortfall.
Finally, Salazar is not convinced that the full $700 billion bailout is necessary.
"Paulson just threw that figure out," Salazar said. "I think it needs more justification."
Salazar is running for re-election against Delta County Commissioner Wayne Wolf.
Congressman Mark Udall, a Boulder County Democrat who is running for the U.S. Senate, also voted against the bailout bill, which would have allowed the Treasury Department to spend up to $700 billion to purchase troubled assets held by financial companies.
Udall said he was well aware of warnings about how a freeze in the credit markets could affect the overall economy. However, he said the measure didn't do enough to protect the average American who would bear the brunt of previous missteps made on Wall Street.
"The cost of this bailout was too high, and the return far too uncertain for the American families who were being asked to bear the burden," Udall said.
Udall's opponent in the Senate race, Bob Schaffer, was campaigning on the eastern plains Tuesday and could not be reached for comment.
Republican Congressman Doug Lamborn of Colorado's Fifth District also voted against the bailout bill.
"This vote is a victory for the taxpayers," Lamborn wrote in a prepared statement. "Because I do not support a government bailout of private institutions, I voted against this bill. It is an invasion of the free market, which I believe is the best way to sustain prosperity for our country."
Unlike Salazar, Congressman Ed Perlmutter of the Seventh Congressional District felt the measure contained sufficient taxpayer protections to warrant his support.
"I felt this bill was a vast improvement over the original proposal which was a blank check to the administration," Perlmutter said. "This bill included important taxpayer protections including recoupment of investments, purchasing of warrants and limitation on executive compensation."
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