U.S. Rep. Michael Michaud split from the majority of his fellow House Democrats on Monday to vote against a $700 billion bailout proposal, which ultimately fell 13 votes shy of passing.
“I voted against the Wall Street bailout bill because it provided largely unchecked authority to the Treasury Department to spend $700 billion of taxpayers’ money without adequate safeguards,” Michaud said in a statement released Monday afternoon, adding that the plan presented to the House did not differ substantially from what President Bush initially outlined.
Michaud’s colleague, U.S. Rep. Tom Allen, who represents Maine’s 1st District and is challenging Sen. Susan Collins for her U.S. Senate seat, voted in favor of the bailout and sharply criticized its failure.
“It is unconscionable that the House failed to reach consensus on legislation to stabilize financial markets as America stands on the brink of the worst economic crisis since the 1930s,” Allen said in a statement. “The jobs, the savings, the homes, the educational opportunities and the retirement security of millions of Americans are at risk.”
Monday’s vote, turned down largely by House Republicans but also by plenty of Democrats like Michaud, delayed passage of the bill for another day and helped to send Wall Street into a nosedive. The Dow Jones Industrial Average closed down 778 points, the largest single-day point drop in history.
House leadership indicated shortly after the bill failed that it would advance a revised bailout proposal, but it’s not clear when that will happen or whether it will receive the 218 votes necessary to move it forward. The House announced late Monday that it would adjourn until Thursday.
Meanwhile, the U.S. remains on pins and needles, from the halls of Washington to the rural communities of Maine.
“I do think a deal will be made, but this is a significant problem with no easy solution,” James McConnon, an economics professor at the University of Maine, said Monday. “We’ve never had a situation of this magnitude before.”
The total vote was 228-205, with Democrats voting 140-95 in favor of the legislation and Republicans voting 133-65 against it. Shortly after the vote failed, Democrats and Republicans were quick to point fingers.
Allen and other Democrats admitted the proposal was not perfect but urged that swift action was paramount.
“People are angry about the lax regulation and lack of oversight that allowed this situation to develop,” Allen said. “I share their outrage and understand that it will grow even more if Congress allows the economic situation to deteriorate even further.”
Michaud, who faces re-election in November against a Republican challenger in John Frary, was steadfast in his belief that not enough time had been given to examine all options.
“There were some credible plans proposed that were completely different than the bailout proposal that some financial experts believed could work better,” he said. “Unfortunately, we were not provided an opportunity to seriously consider these other options.”
McConnon said it has become unfortunate that such a dire economic situation has become political.
“From what I see, the impact of this on businesses, particularly with the availability of credit and the cost of credit, is going to be huge,” he said. “All businesses rely to some extent on external financing. The businesses I work with and talk with are very concerned, and it’s difficult to keep holding on to this wait-and-see approach.”