$700 billion financial rescue plan...

WASHINGTON — Senators who voted against the $700 billion financial rescue plan make up one of the most curious coalitions of lawmakers ever to share common ground.

It included arch-conservative Republicans like Jim DeMint of South Carolina, liberal Democrats like Russ Feingold of Wisconsin and Bernard Sanders, independent of Vermont, who is regarded as the Senate’s resident socialist.

Taken together, the speeches of the 25 senators who voted against the plan on Wednesday amount to the Congressional equivalent of a dissenting opinion by the Supreme Court — impassioned, well reasoned, carefully articulated views on a landmark question of public policy that ultimately reflected the position of a minority of their fellow arbiters. If the bailout plan flops, they are the lawmakers who will be positioned to engage in a chorus of “I told you sos.”

Their concerns spanned a panorama of issues: frustration over the lack of long-term regulatory changes in the legislation; alarm that $700 billion in taxpayer money would be at risk; anger that the Treasury secretary would not be subject to more stringent oversight; skepticism that executives of firms that seek help would face limits on their pay; and dismay that such an important bill was being rushed through Congress.

And, perhaps most pointedly, they expressed skepticism that the bailout proposal would be able to restore liquidity to the credit markets, prevent the collapse of additional banks and safeguard the economy from a long recession.

“This package is just a very costly Band-Aid for big banks that will do very little to help patients who need major surgery,” Senator Michael B. Enzi, Republican of Wyoming, said in his speech on the Senate floor.

“Had Congress been able to use the regular committee process to craft a bipartisan and comprehensive legislation, the resulting bill may have gained my support,” Mr. Enzi said. “Unfortunately, Congress has been pressured into passing this bill in two weeks by Treasury and Wall Street. A rescue plan of this scale requires a clear plan of action with a substantial chance of success. This plan has neither.”

Some of the harshest criticism was leveled by Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, who normally would have been his party’s lead negotiator on the bailout bill but removed himself because he opposed the administration’s proposal at its very core.

“The choice we faced was between pursuing an informed response or panic,” Mr. Shelby said. “Unfortunately, we chose panic and are now about to spend $700 billion on something we have not examined closely. Yes, in the end, we will have ‘done something.’ At the same time, however, we will have done nothing to determine whether it will accomplish anything at all.”

Mr. Shelby, in his speech, laid out a modern history of the American housing, mortgage and securitization markets, explaining how a bubble in home values was fueled by loose lending standards, exotic mortgage products and complex financial instruments, pushed by financial firms that were leveraged heavily to maximize profits.

And in many ways, he was already dishing out “I told you sos.”

“We did not get to where we are today by accident, it was a path we chose,” he said. “My warnings about the risk of basing credit decisions on well-intended social mandates rather than sound, fact-based underwriting were dismissed. My concerns about the inadequacy of the regulatory structure put in place in the financial modernization legislation went unacknowledged. My efforts to ensure that bank capital standards were designed to ensure safety and soundness, rather than industry concerns, were conducted largely alone.”

Mr. Sanders, the Vermont independent, complained that the bill did not put any limits on the types of distressed debt the Treasury could buy, that it did not provide enough oversight, that it did not include adequate provisions to limit home foreclosures, that it did not really limit executive pay at firms that seek help.

“Under this bill, the C.E.O.’s and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits,” Mr. Sanders said.

He said the bill also did not do anything to prevent financial institutions from becoming “too big to fail,” effectively leaving open the potential need for future bailouts.

Mr. Sanders also said he could not fathom giving Treasury Secretary Henry M. Paulson Jr. such broad authority over so much money.

“Maybe I am the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the secretary of the Treasury, who is the former C.E.O. of Goldman Sachs, which, along with other financial institutions, actually got us into this problem,” he said. “Maybe I am the only person in America who thinks that is a little bit weird, but that is what I think.

Taken from here...