Bailout plan moves to U.S. Senate

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(Host) Senator Patrick Leahy says it’s likely that the U.S. Senate will try to pass a bailout plan for the country’s financial system later this week.

But Leahy says he won’t vote for the bill unless it includes new protections for taxpayers and some new oversight of the financial industry.

VPRs Bob Kinzel reports:

(Kinzel)Leahy says that Democratic and Republican leaders in the Senate have decided to take this issue up following the rejection of a $700 billion bailout bill in the House on Monday.

Leahy says it’s important for Congress to act quickly on a new package but he also says it’s critical that the legislation doesn’t leave taxpayers on the hook for irresponsible investments:

(Leahy)"Then we should have checks and balances we should have an oversight board, an inspector general we’ve got to make sure American taxpayers can get their money back and if there’s a profit on the money it should go to the taxpayers not to the people who caused the problem."

Leahy says he’s worried that a continuation of this financial crisis could begin to affect Vermonters in several different ways:

(Leahy)"I’m concerned about the credit tightening on the value of our homes in Vermont our businesses our farms our families even our neighboring state of Massachusetts had problems getting short term credit for their payroll."

Senator Bernie Sanders says the current crisis is largely the result of efforts to deregulate the financial services industry and he says any new bail out bill must reverse this trend:

(Sanders)"How can you not review this deregulatory fever all of the trillions of dollars floating around the world and credit default swaps and other exotic financial instruments which nobody understands nobody knows what is going on how can you not look at that so my worry is just to give 700 billion dollars more to the exact same people who got us into this mess the exact same people who made out like bandits while putting our financial system on the brink just doesn’t make a lot of sense to me."

Sanders says he doesn’t want middle class families to get stuck with the bill for this bailout, so he’s sponsoring an effort to impose a tax surcharge on all individuals who make more than a million dollars a year to help pay for the plan:

(Sanders)"One of the demands that I’m going to be making is that this bailout be paid by the folks who benefited from Bush’s policies by Wall Street and the upper income people."

Congressman Peter Welch voted against the bail out bill in the House on Monday because he says he wasn’t persuaded it would be effective and because it placed new debt burdens on taxpayers.

Speaking on VPR’s Vermont Edition, Welch said he would reconsider his opposition if a new bill included some additional taxpayer protections. He likes the idea of imposing a small fee on all stock transactions:

(Welch) "And as money went into that fund we’d keep it there and use it to offset the losses taxpayers will incur when the treasury buys these toxic debt securities so that’s really a major concern for me is to make certain that after we pass legislation a month a year two years down the line we don’t find the taxpayers saddled with this enormous burden."

Senator Leahy says he expects a new bail out bill will come up for consideration in the Senate by the end of the week.

For VPR News I’m Bob Kinzel in Montpelier.

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