Crescent-News.com - Latta: 'Leaning to the no side' on House vote

By TODD HELBERG

cnedit@crescent-news.com

A failed financial bailout bill that U.S. 5th District Congressman Bob Latta opposed Monday probably hasn't changed enough for him to change his vote.

Latta said this morning that he is "very much leaning to the no side" on revised legislation that was passed overwhelmingly by the Senate on Wednesday and may be voted upon today in the House. The original bill was defeated by the House on Monday, and Latta joined 227 other congressmen in voting no.

Speaking this morning from Washington, Latta said the core of the legislation hasn't changed; it still talks of spending $700 billion in taxpayer money to engineer the Wall Street bailout and providing unprecedented powers to the U.S. treasury secretary.

"This would probably be the most unprecedented exchange of power in American history ... to an appointed, unelected officer," noted Latta. "It's going to be such a broad, broad power. It's worrisome.

"... The crux of the bill is the same," he added. "The problem is with the core."

For Latta, that problem is spending taxpayer money to buy struggling companies' degraded assets.

"We've got to remember these assets are being purchased by the American taxpayer," he said.

The Senate bill has added unrelated provisions to attract more support -- such as tax cuts and changes to the alternative minimum tax (AMT) -- which Latta does not oppose on their own merits. But he doesn't like what the bill has become.

"There's a lot of good things," he said. "I'm all for the AMT fix, but it could have been done separately. They threw this all into this and it became a Christmas tree over in the Senate."

His lean toward a no vote is also tempered by the bill's uncertainty. The $700 billion figure that is being mentioned, Latta said, has no solid basis.

"Now we have expectations on Wall Street saying we need $700 billion," he explained. "What happens if we need $1 trillion? We don't have a firm figure as to where we are. Where did that figure come from? We've not been given a good answer yet."

In addressing the issue, Latta said he would like to see more options presented.

"We've only been given one option," he said. "Here's your option. You get to choose door one, two or three, and by the way there's only one."

What about doing nothing and letting the market sort things out?

"I don't think it's an option because it's serious out there," said Latta. "It's permeated the entire market. The credit freeze is happening. People are going to find out that if they go down to their bank to get a short-term loan for a business they are going to have a very hard time getting it. We have to have something infused in the market."

Many reasons have been posited for how this crisis came about. One that Latta points to is more liberal mortgage lending practices.

"This all started when loans were to be given more freely," he said. "You had some people who speculated on buying a house and they had a negative balance on the house. You had some over purchasing and other people in the market shouldn't have been in the market. Then you have the situation with mortgages being packaged. Fannie Mae and Freddie Mac are out of control and we all know it."

He said this produced a "very fragile house of cards" that, "if the wind started to blow, was going to fall down."

Other problems, Latta suggested, are general spending and borrowing practices by the federal government, and Americans in general.

"The problem is this country has become a debtor nation," he said. "We have a $9.6 trillion national debt. Our debt ceiling is being raised to over $11 trillion in this bill. Of that $9.6 trillion, $2.6 trillion is owned by foreign governments.

"We've got to wake up," he added. "We've got to start saving. We can't be out there as individuals borrowing, borrowing, borrowing. My grandmother had a saying, 'He who goes a borrowing, goes a sorrowing.' It's a good old philosophy. Some days you can't buy that thing."