Levin, Stabenow split over financial bailout

By KEN THOMAS, Associated Press Writer

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By Beth Boehne

Story Created: Oct 1, 2008 at 7:54 PM EST

Story Updated: Oct 1, 2008 at 9:35 PM EST

WASHINGTON (AP) — Michigan Sens. Carl Levin and Debbie Stabenow split Wednesday over a $700 billion bailout of the financial industry, with Levin supporting the measure and Stabenow opposing it.

Levin said if Congress failed to act, pensions and savings could be decimated, Americans could lose jobs and many consumers would not be able to buy a new car or home. Levin said he had qualms about the plan and was concerned it might not loosen up enough credit, but there were few options.

"It's clear to me that we cannot allow our nation's economy to fall off this cliff," Levin said. "We need to take action before it is too late. Doing nothing is not an option."

In voting against the bill, Stabenow said it was "fundamentally the wrong approach to fixing our economy" and said it did not do enough to protect the jobs of workers and their homes.

"Hardworking families in Michigan are in crisis every single day and the bill passed by the Senate tonight does little to help them," Stabenow said.

Both Democratic lawmakers were critical of the policies that led to the current credit crisis. Levin said it was marked by "an appalling lack of oversight by the regulators of the market place" and described Wall Street as "run amok with greed." Stabenow said the nation's economic woes were the result of a "failed set of priorities that have rewarded greed."

The bill, crafted to help the nation's economy avoid a major recession, passed the Senate on a vote of 74-25, building momentum for the House to reconsider a revised package this week.

The bill would allow the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. Supporters said it would help credit to flow again and stave off a deep recession.

Proponents of the plan say the government eventually could sell the devalued assets at a better price, reducing the program's final cost.

The Senate plan included language, designed to win House approval later this week, that provides higher limits on federal deposit insurance, extends tax breaks for some states' sales taxes and requirements that some businesses improve coverage for workers' mental health.

Levin said he voted for the bill with the hope that "allowing the government to buy up a significant portion of the troubled assets ... will unlock enough capital to restore flexibility and credit to businesses and consumers."

Levin said he could not have supported the original bailout plan issued by the Bush administration because it did not provide enough protections to taxpayers or oversight.

Stabenow said she was pleased the bill included provisions to promote alternative energy but any economic rescue needed to "start from the root of the problem — helping families stay in their homes and keep their jobs."

Nine of Michigan's 15 House members opposed the plan, which was defeated on a vote of 228-205 on Monday. Supporters hope to persuade a dozen lawmakers in the House to vote in favor of the modified version.

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