Bailout Package Defeated in House :'This plan is fraught with unintended consequences.'

Here is a selection of quotes about the massive $700 billion bailout of Wall Street financial institutions from some of the key players. The bill was defeated in the House last Monday 205 to 228. (See rollcall page 18.) Democrats voted in favor of the bill 140-95. Republicans voted 65 to 133 against. A slightly different version was passed by the Senate on Wednesday.

Rep. Jeb Hensarling (R.-Tex.), chairman of the House Republican Study Committee:

“Inaction has never been an option, but the Paulson plan should have never been the only option. In my heart and in my mind, I believe that this plan is fraught with unintended consequences, would force generations of taxpayers to pick up the tab for Wall Street losses, and could permanently and fundamentally change the role of government in the American free-enterprise system. Once the government socializes losses, it will soon socialize profits. If we lose our ability to fail, we will soon lose our ability to succeed. If we bail out risky behavior, we will soon see even riskier behavior.”

Rep. Mike Pence (R.-Ind.):

“Our nation has been confronted by a serious crisis in our financial markets. The President and this Congress were right to act with all deliberate speed in addressing this crisis. We now have a deal that promises to bring near-term stability to our financial turmoil, but at what price? Economic freedom means the freedom to succeed and the freedom to fail. “The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free-market economy. Republicans improved this bill but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it.”

Doug Holtz-Eakin, senior policy adviser for the McCain-Palin campaign:

“From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Obama and Reid, Speaker Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families.

“Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill. Just before the vote, when the outcome was still in doubt, Speaker Pelosi gave a strongly worded partisan speech and poisoned the outcome. This bill failed because Barack Obama and the Democrats put politics ahead of country.”

Rep. Louie Gohmert (R.-Tex.):

“Secretary Paulson had said that it might take 10-20 years to hold the assets before they achieved their appropriate value. Only the federal government had the patience, America was told, to manage these assets correctly! The federal government can’t even keep the same tax incentives in place for two years in a row. Congress often changes its mind and so do administrations. Why should we believe this is going to work?

“The administration tells us that the government is going to make money for the taxpayers on this deal. Really? I think, by most measures, that is called socialism. It has failed every time it has been tried. Capitalism fails when it evolves toward socialism. I would defy anyone to show me a financial deal in which the federal government bought property cheaper from a ready willing and able seller or sold property for more than a ready, willing and able seller could have than a private entity.

“Any time the government says it is going to make you money with your tax money, then it has decided to compete with businesses.”

Former Speaker of the House Newt Gingrich:

“I have sadly come to two painful conclusions. First, the crisis of the credit markets is real and could have horrendous consequences dislocating the world market, causing enormous economic pain, and discrediting free-market capitalism for a generation. Second, as long as Secretary Paulson is in charge, it is impossible to get a creative or significantly better solution.

“The House Republicans, reinforced by John McCain, have improved this bill significantly so it is less bad than the original Paulson proposal. However, they cannot improve it more because of Paulson’s intransigence, which is an even greater obstacle to a good bill than the liberal Democrats who run the House and Senate.

Therefore, while I am discouraged at the final collapse of the Bush Administration, and frustrated by the Democrats’ passion for the taxpayer’s money, I would reluctantly and sadly vote for the bailout were I still in office.…

“This bailout is a temporary emergency measure to stop a hemorrhaging of credit and the potential collapse of the American and world economy. However, it is not a cure nor is it a roadmap for the future. The American people need to know that we will fight for an economic growth program and an energy independence program that will put them and their country back on the path to prosperity. Anything less will be a betrayal of their future.”

Republican House Policy Chairman Rep. Thaddeus McCotter (R.-Mich.):

“The proposed $700 billion dollar Wall Street bailout bill is not a Republican solution. It is not a Democratic solution. It is not an American solution. The proposed $700 billion dollar Wall Street Bailout is a Socialist solution — one that, by threatening hard-working Americans’ prosperity, unconscionably ransoms hard-working Americans’ money and reduces their liberty. As such, it is a generational threat to Americans’ liberty and prosperity.

“Congress cannot re-inflate the bubble to save the American economy. The only responsible course is to incentivize private-sector recapitalization so Wall Street pays to clean up its own mess, and provide — as an absolutely last resort — an appropriate insurance backstop that first and foremost protects the innocent American workers, consumers and taxpayers.”

House Speaker Nancy Pelosi (D.-Calif.):

“They claim to be free-market advocates when it’s really an anything-goes mentality: No regulation, no supervision, no discipline. And if you fail, you will have a golden parachute and the taxpayer will bail you out. Those days are over. The party is over. “Democrats believe in a free market. But in this case, in its unbridled form, as encouraged, supported, by the Republicans — some in the Republican Party, not all — it has created not jobs, not capital. It has created chaos.”

House Minority Leader John Boehner (R.-Ohio)

“We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House.“

Rep. John Shadegg (R.-Ariz.)

“Today, I am calling on Secretary Paulson to resign. I believe he has failed to do his job and failed to uphold his responsibility to the American people. He did not warn Congress or the nation in advance of the impending crisis.

“Congressional leadership received less than four hours notice before the secretary publicly warned of an immanent collapse of the market and announced his bail-out plan. Clearly, it was his duty to provide Congress and its leaders time to evaluate this situation, and he failed. The secretary went public with dire warnings, scaring the nation minutes after apprising congressional leaders of this problem. That is simply unacceptable.”

President Bush:

“The consequences will grow worse each day if we do not act. Our economy is depending on decisive action from the government. I’m confident that we’ll deliver. As much as we might wish the situation were different, our country is not facing a choice between government action and the smooth functioning of the free market. We’re facing a choice between action and the real prospect of economic hardship for millions of Americans.”

Rep. Paul Ryan (R.-Wis.):

“We’re all worried about losing our jobs. Most of us say, ‘I want this thing to pass, but I want you to vote for it, not me.’”

Sen. John McCain (R.-Ariz.)

“We haven’t convinced people that this is a rescue effort, not just for Wall Street but for Main Street America, for working families, for small businesses, the heartland of America — all over America. We didn’t do a good enough job.”

Sen. Barack Obama (D.-Ill.):

“While I, like others, am outraged that the reign of irresponsibility on Wall Street and in Washington has created the current crisis, I also know that continued inaction in the face of the gathering storm in our financial markets would be catastrophic for our economy and our families.”