Thompson votes against bailout

By JILLIAN JONES
Register Staff Writer

Rep. Mike Thompson, D-St. Helena, joined the bipartisan chorus of opponents to a $700 billion bailout plan Monday, voting against proposed legislation intended to rescue the nation’s financial system.

Resistance to the measure came from both sides of the aisle, with two-thirds of House Republicans and 40 percent of Democrats opposing the bill. The final vote was 228-205.

Fifteen of California’s 34 Democrats in Congress voted against the bill, including Thompson; 9 of 19 Republicans opposed the bill.

Thompson is a member of the Blue Dog Coalition, a group of fiscally conservative Democrats in Congress whose top priority, according to its Web site, is to “refocus Congress on truly balancing the budget and ridding taxpayers of the burden the national debt places on them.”

The bailout plan would have sought to shore up ailing U.S. financial markets by buying out billions in bad investments.

Thompson acknowledged the severity of the current financial crisis, but said he nonetheless voted against the bill because of its inadequate market reforms and weak taxpayer protections.

“We find ourselves in serious times, and we need equally serious solutions to steer our economy back onto solid ground,” Thompson said in an e-mail. “There’s no question we must address the weaknesses in our financial regulatory system to make sure that there are 21st-century regulations for 21st-century markets.”

The legislation would have allowed the government to buy bad mortgages and other shaky assets from banks and financial institutions. Relieving the companies of those debts would free up the lending market, according to supporters, restoring stability to the stumbling economy.

Thompson said he voted against the proposal “because it did not contain the market reforms necessary to address the underlying cause of this problem, nor did it have strong enough taxpayer protections.”

“While congressional leadership plans the next step for a financial rescue legislation, I’m working for better regulation of short selling, greater transparency and regulation of credit default swaps and better recoupment provisions to ensure taxpayers get their money back,” Thompson said.

A short sale occurs when a broker bets against the rise of a stock. A credit default swap acts as insurance in the event of a default, and usually applies to municipal bonds, corporate debt and mortgage securities. Unlike banks and mortgage companies, the credit swap market is not regulated by the government.

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