In minority, Pearce and Udall vote against financial bailout bill

Though the U.S. House reversed course Friday and voted to approve the economic bailout bill, New Mexico’s two U.S. Senate candidates refused to switch sides and voted with the minority against it.

The final vote was 263-171 in favor of passing the legislation, a huge shift from the 228-205 defeat of a prior version of the bill received on Monday. In the interim, hundreds of pages were added to the bill, including a number of tax breaks and Sen. Pete Domenici’s mental health parity legislation.

Since it’s already been approved on a 74-25 vote by the Senate, the bill now heads to President Bush, who is expected to sign it.

Pearce and Udall voted against Friday’s bill, as they did on Monday. Rep. Heather Wilson voted for it, as she did earlier this week.

Udall, who is running against Pearce to replace retiring Sen. Domenici, said in a news release that the bill “still lacks key principals.”

“Four days ago, I opposed a bailout plan that did too little for homeowners, too much for executives and nothing to prevent Wall Street from repeating the mistakes that got us into this crisis,” he said. “The core bailout bill brought before the House today is almost identical. It will still put New Mexico and U.S. taxpayers on the hook for $700 billion to bail out Wall Street, the very people whose irresponsibility helped to undermine America’s economy and threaten the jobs and life savings of millions of American families.”

The office of Pearce has not released a statement since Friday’s vote. In announcing on Thursday that he would vote against the bailout bill, Pearce said it contains some “praiseworthy” provisions, but most are “unrelated to the financial crisis and add billions in wasteful pork projects and payoffs to special interests.” He has also said the middle class should not have to pay “for the mistakes of the rich.”

Udall was also critical of the Senate for adding of “unrelated provisions” at the expense of “concentrating on fixing this deeply flawed proposal.” He said he has long supported many of the tax cuts in the bill and the mental health parity legislation, but they should be voted on “based on their own strong merits, and not forced into a $700 billion taxpayer bailout, a plan that will have a large and widespread impact for generations that has been rushed through with serious flaws and many problems left unaddressed.”

In explaining her vote Friday, Wilson said in a news release that a “failure of our financial system will hurt every American who has a 401(k) or needs a car loan or can’t close on the house they want to buy because banks are stopping lending to banks.” She also cited the tax provisions as important for boosting the economy.

Senate candidates agree that action is necessary

Pearce has said action is necessary. He was a co-sponsor on a GOP alternative to the bailout bill, which included a guarantee from the U.S. Treasury of up to 100 percent for bank losses resulting from mortgage-backed securities that failed prior to the proposal being enacted. The alternate bill included other provisions, including a two-year suspension of capital gains. You can read a summary by clicking here.

Udall agreed that America is facing a serious crisis and that Congress must take action.

“But we cannot let fear and artificial timelines drive our decision-making,” he said. “Our solution should meet the demands of the day without producing more economic hardships in the future.”

Udall said the bill gives the treasury secretary too much power to spend taxpayer money without adequate oversight, doesn’t do enough to prevent corporate executives from taking millions of dollars for themselves, bails out foreign companies whose governments are doing nothing to help them and does too little to help “responsible homeowners.”

Udall also called for Congress to work on “a new framework for our financial system.”

“In this hour of crisis, we have a rare opportunity to protect future generations from the turmoil we have seen. We must seize this opportunity, not simply bail out the very people who created this crisis,” he said. “Today’s vote was difficult, but I believe it is what’s right for New Mexico’s Third Congressional District and the people of New Mexico and our nation.”

Update, 1 p.m. Friday

The president has already signed the bailout bill into law.

Update, 3:30 p.m.

Pearce said in a news release that he doesn’t believe “average American taxpayers who made responsible decisions, lived within their means and pay their mortgages and rent on time” should have to bail out “Wall Street billionaires or corporations who knowingly gave out bad loans.”

“Middle-class New Mexicans should not see their taxes raised by thousands of dollars while those who got us in this mess walk away with the profits,” he said. “Those who have brought us to this position through their own greed should be held accountable.”

Pearce said he supports some of the provisions in the bill, including some of the tax credits, but they’re not related to the financial crisis.

“I voted against the bill because I think we can craft a better solution that does not put the economic stability of future generations in jeopardy,” he said. “We need to protect middle-class taxpayers, reform the system so we’re not faced with the same problems down the road and hold accountable those who caused the problem. We need the right solution that finds market alternatives instead of making government larger.”

Pearce said today’s vote “tests who we are as a people. It was not a political vote, but a principled one. I respect all the votes today as honest and honorable. My continued belief is that the economy works best when we lower taxes and let individuals be responsible for their own choice and their own lives.”

A prior version of this posting incorrectly characterized Udall’s vote on a procedural issue that preceded the actual vote on the bill.