“I opposed the bailout because it did more for Wall Street than it did for Main Street,” said Teague. “We need to end TARP. And rather than allow for any remaining TARP funds to be used as a slush fund for other programs, we need use that money to pay down our national debt.”

The bill, the TARP Sunset and Fiscal Responsibility Act, is cosponsored by Betsy Markey, D-Colo., Suzanne Kosmas, D-Fla., Larry Kissell, D-N.C., and Debbie Halvorson, D-Ill.

It would block Treasury Secretary Tim Geithner from spending TARP money after December 31.

Teague says the program still has $200 billion of unspent money.

“TARP was deeply flawed from the beginning,” Teague said. “While most families in my district were tightening their belts, the bailed out financial institutions were awarding executive bonuses.”

Teague voted against releasing the second half of the TARP funding earlier this year along with a majority of the House. However, the vote was largely symbolic, as the authorization only needed to pass one chamber of Congress and it had previously passed the Senate.

Sen. Jeff Bingaman kept his position the same, voting for the release of the money, and was joined by his fellow Democrat, Sen. Tom Udall. Udall voted against the original bill in October while he was still a member of the House.

Udall explained his change of heart in a statement, saying, ““The circumstances have now changed.”
One important circumstance that has changed (or rather will change in less than a week) is the president.

“President-elect Obama has committed to me that in using these funds he will carefully reinvest in our economy with increased accountability and oversight to help stabilize our middle class,” Udall said. “He also committed to implementing the needed safeguards I have been advocating from the outset of this debate.”

In October Udall expressed concern over what was then being called “the bailout.” From a September, 2008 story by NMI’s own Heath Haussamen on the original vote, which failed in the House:

Udall, in a statement released by his office, said the Bush administration and its allies have spent eight years allowing Wall Street “to gamble with America’s economy, and the results have been devastating for Main Street.” He said the bailout bill “still contains significant flaws” and has “virtually no protections for American taxpayers.”

One of the reasons Udall said he voted against the original bill was that “little is being done to help responsible homeowners. Tens of thousands of families could lose their homes. More importantly, families who had nothing to do with failed mortgages could lose billions in assets as foreclosures continue to drive down property values.”

This time around, Udall’s statement said: “These funds will be used to help responsible homeowners renegotiate their mortgages or go into court to prevent foreclosures. It will prohibit funds from being used towards executive compensation and dividend payments. And it will put limits on stock buybacks and the acquisition of already strong companies. The House and Senate have also already begun hearings to investigate the root causes of the financial failures so we can take steps to prevent repeating the same mistakes.”

It is unclear if this would be a change from former Sen. Pete Domenici. Domenici, a Republican, voted for the original bill.

Bingaman has not issued a statement on the legislation yet.

Here’s the 30-second spot:

“Big banks gave out bad loans and made millions. Wall Street billionaires played fast and loose with your money, took huge salaries and even bigger bonuses. Giant corporations sold mortgages to unsuspecting people who could not afford them and did not need them,” Pearce says in the ad. “Like you, I believe in free markets and free enterprise. It’s the American way. Higher taxes, bigger government and greedy lobbyists are not the answer.”

The TV spot follows a radio ad about the bailout, which Pearce began airing earlier this week.

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.

The Senate has already approved the reworked version of the measure the House rejected on Monday. Pearce voted against the previous version of the bill and said in a news release sent late Thursday that he doesn’t see anything in the new version to change his vote.

Pearce said there are some provisions in the new bill that are “praiseworthy,” but “the majority are unrelated to the financial crisis and add billions in wasteful pork projects and payoffs to special interests.”

“Even though I understand influential groups have urged support for the bill, the American people have this one exactly right. Constituents calling my office have overwhelmingly opposed the bill,” Pearce said. “Unless I can find a reason that is not currently included in the present version of the bill, I will vote to protect average Americans by opposing this outrageous big-government intrusion into the market system.”

Congressional leaders are struggling to change the votes of at least 12 members of the House who voted against the bailout on Monday. While several have announced that they will change their votes, whether there are enough votes to pass the bill today isn’t clear.

The other New Mexico House member who voted against the bailout on Monday, Rep. Tom Udall, remains undecided on how he’ll vote today. Rep. Heather Wilson, who voted for Monday’s bill, has also not announced how she’ll vote today.

Pearce said his opposition to the bill “does not mean doing nothing is a solution.”

“The House should pass a clean bill. We need to head back to the drawing board and craft legislation that does right by the American people,” Pearce said. “A solution has to happen, but it must be the right solution — an appropriate response that keeps the middle-class taxpayer from paying for the mistakes of the rich.”

Pearce said those who “have brought us to this position through their own greed should not escape accountability.”

“There are several market-based alternatives we should consider that will get our economy back on track without threatening the economic stability of future generations,” he said.

Pearce’s news release included little information on what he views as a viable alternative, but he provided a few additional details to The Associated Press.

Denish urges support for bill

Meanwhile, Lt. Gov. Diane Denish put out her own news release on Thursday calling on members of the state’s congressional delegation to support the bill. She also phoned the members to ask them to vote for it, saying she visited eight New Mexico communities last week and heard stories about families and businesses that are being affected by the economic situation.

“Families rely on lenders to make car loans, pay tuition, fund home mortgages and just make ends meet,” Denish said. “It is unfortunate that New Mexicans find themselves forced into bearing the burden of this difficult situation. While some provisions of the bill are hard for me and others to accept, I believe now is the time for the House to work together across party lines to address the immediate crisis and then work to make sure this never happens again.”

Many House members who voted against the bailout on Monday — Democrats and Republicans — are in close election contests and appear to have opposed the bill largely because they fear losing their seats if they vote for something the majority of Americans oppose.

House Speaker Nancy Pelosi couldn’t let pass the opportunity to bash Republicans before the vote. Some Republicans apparently decided to act like middle-school students and voted against the bill not because they opposed it, but because their feelings were hurt by Pelosi’s inappropriate and overly partisan speech.

John McCain decided to pull a political stunt by trying to use the crumbling economy to bolster his presidential campaign. And the Senate had to add a bunch of unrelated sweeteners — and hundreds of pages — to the bill before passing it, an apparent attempt to bribe members of Congress to support the bill.

To top it all off, they’re trying to change the moniker attached to the bill from “bailout” to something that has a more positive connotation, like “economic stabilization” or “economic rescue.”

This is why the average approval rating of Congress in recent polls is 17.8 percent. President Bush’s isn’t much better at 26.7 percent. Even now, when our economy is on the verge of collapse, Washington can’t set aside partisan politics as it struggles to find a solution.

If Washington can’t set aside partisan politics at this critical moment in history, I find it difficult to believe our political leaders are even capable any longer of doing what our founding fathers intended: debating policy on its merits until they find a workable and realistic compromise.

And if Washington can no longer set aside partisanship for the good of the nation, what hope is there for the nation? Our Constitution sets up a government that can change over time to adapt to the needs of society. Our leaders have to be able to come together to solve major problems. In addition to the economy, there’s the war, energy, health care, immigration and infrastructure, just to name a few of the critical issues Washington has failed to address that are already emergencies or are huge problems that each threaten to become a crisis at any time.

Democrats often blame the Bush presidency for the fact that America is living from crisis to crisis, but the bipartisan Congress is just as culpable. By failing to solve problems, Washington is letting important issues degrade into emergencies. Now our nation is teetering on the brink, and many in Washington are trying to figure out how to profit politically from the situation. Disgusting.

It is a bailout

And one more thing: It is a bailout, regardless of what anyone says. It’s a bailout of banks that deceived people into taking on debt they couldn’t afford and, in doing so, took on toxic debt themselves. It’s also a bailout of homeowners who didn’t educate themselves enough to figure out that they couldn’t afford mortgages they’re now struggling to pay. And it’s a bailout of the government that’s dependent on those banks and homeowners, a government that failed to regulate the system and ensure that banks couldn’t trick people into taking on debt they couldn’t afford.

This is a democracy. We’re all in this together. We dug ourselves a deep, deep hole. We’re looking to our leaders to lead us out of this mess, and many of them are busy instead trying to figure out how to profit from it. I don’t have the answer to the financial crisis. I have incredibly mixed feelings about the bill working its way through Congress. I’ve heard other ideas that might be good, but Congress is apparently unwilling to consider them. Even if lawmakers approve the bailout, it should not be seen as the end, as though they’ve fixed the problem. It should be the beginning of a lot of scrutiny.

But I don’t trust that Washington is capable of the scrutiny that is required, just as I don’t trust that Washington is working with all its might to find a real solution to our crisis, and putting that above all else in our time of need. If those who currently hold office in Washington can’t set aside partisan politics to work for the good of the people now, they won’t ever be able to do it. Since there are no incumbents in New Mexico’s federal races, I can say this without endorsing anyone: It’s time to throw the bums out.

More than 70 percent of U.S. households have money invested in retirement plans, roughly half of U.S. households own stocks, bonds or mutual funds and more than 50 million households have a mortgage, according to investment industry statistics and the U.S. Census Bureau. The long-term health of those investments depends directly on the overall health of the economy, said Larry Waldman, senior researcher at the University of New Mexico’s Bureau of Business and Economic Research.

And that’s the point of the bailout plan, he said. “It’s not to save Wall Street,” Waldman said, “it’s to save us.”

The Investment Companies Institute (ICI), a national advocacy group representing the mutual fund industry, reported recently that 71 percent of American households had retirement accounts in 2007 that totaled more than $17 trillion. The retirement plans range from Individual Retirement Accounts (IRAs) to traditional company and government pension plans, but most of the investments depend on a rising stock market to grow and keep pace with inflation.

About a third of U.S. households also have money invested in non-retirement stocks or mutual funds, according to the Census Bureau. Those folks’ fortunes generally rise and fall with the stock market. Though they may not be invested in risky businesses, most will be carried along for the downward ride when financial markets seize up, Waldman said.

And about 40 percent of U.S. households, or some 51 million in all, have a mortgage, with a total value in 2006 of more than $10.2 trillion, the Census Bureau says.

How the proposed bailout plan will affect the average American is anyone’s guess, judging by the range of experts’ opinions. University of New Mexico (UNM) professor emeritus and economist Allen Parkman says the U.S. economy is fundamentally sound — the gross domestic product continues to grow and unemployment is well below record levels. “I just don’t think there’s any reason to worry,” he said.

Parkman was especially critical of the original bailout plan and the way it was presented to Congress, he said. It was far too short on detail, gave too much authority to the Treasury secretary and provided no hint of what taxpayers might get in return for taking on the risk, Parkman said. “It turned out to be the biggest PR faux pas on the planet.”

But the average American whose retirement is invested in Wall Street and whose mortgage is stable shouldn’t sweat the recent volatility on Wall Street, he said. “It’s the real economy,” meaning employment, economic output and the like, “that in the long run affects the stock market,” Parkman said. “Whatever happens [with the bailout], the stock market five years from now will no longer reflect any of this.”

More than 120,000 active and retired New Mexico educators and another 75,000 active and retired public employees have a stake in the bailout through their respective retirement plans. Together the two funds total about $19 billion. Both are widely diversified and both anticipate an average, long-term return on their investments of 8 percent.

Jan Goodwin, the former New Mexico Secretary of Taxation and Revenue who since March has been executive director of the state Educational Retirement Board, said the current turmoil on Wall Street will have no impact on individuals’ monthly checks. “We’re a large, well-diversified fund that can withstand a downturn like this,” she said.

The $8 billion fund is invested in a wide variety of sources, including stocks, bonds, Treasury bills and real estate, she said. Though it has lost value in recent months, its average return over the last several years has been above 8 percent, Goodwin said.

The state Public Employees Retirement Association is in a similar situation, said Executive Director Terry Slattery. Its fund has been losing value for more than a year, he said, and is now about $11 billion. He said he was troubled by the turmoil on Wall Street, particularly the tight credit market that is choking off the flow of capital to the businesses and individuals that need it.

“We’re very diversified, but when the market goes one way or the other it affects us,” Slattery said. A prolonged contraction of the U.S. economy could drag down his fund’s overall performance, he said, forcing the need for higher contributions from current employees.

Mortgage holders have nothing to fear, even though it’s possible their own mortgages were chopped up, bundled with other mortgages — including the now-infamous sub-prime mortgages that are going into foreclosure left and right — and then sold around the world in a bewildering manner. Though the spate of foreclosures continues to drag down average home prices, UNM’s Waldman said good mortgages won’t be dragged down by the failure next door.

“You’re as safe as anything could be,” he said. “Whoever holds that mortgage isn’t going to affect you.”

After the House killed the first rescue plan, Congressional leaders revised it enough to win Senate approval Wednesday night. Now it’s back for another vote in the House, where support is thought to be strong enough to win this time. Even if it does pass, it’s unclear what effect such a plan will actually have. And though no one can guarantee that a bailout will prevent a recession, Waldman said he’s among those who think it’s a better option than doing nothing.

“I believe they have to pass something, because the downside risk will be worse,” he said. “You really don’t know how bad it can get when the market stops working.”

U.S. Reps. Steve Pearce, Tom Udall and Heather Wilson all commented on the bill after Pearce and Udall voted against it and Wilson voted for it. Click here to read their comments.

Beyond that, few of the top politicos and candidates for office in New Mexico chose to comment on Monday’s vote.

U.S. Sen. Pete Domenici was one who quickly responded to a request for comment, releasing a statement expressing his disappointment.

“Doing nothing is not an option. This action will precipitate an economic catastrophe for America,” Domenici said. “The initial response to this ill-advised action has been limited so far to the equity market and the corporate-bond market, but I predict that the defeat of the plan will soon permeate our entire economy. It will also have serious and not completely predictable consequences in all markets throughout the world.”

“This plan included many features that those who opposed it wanted. It had many new safeguards for the taxpayer,” he said. “Yet a rigid adherence to an ideological purity on both sides that has never existed in our nation led many in the House to reject the plan.”

Domenici said the rejection of the proposal “cannot be the last word the Congress has to say.”

E-mail requests for comment sent to the offices of Sen. Jeff Bingaman and Gov. Bill Richardson went unanswered on Monday. It was even more difficult to get comment out of six of the seven candidates seeking to replace Pearce, Udall and Wilson in the House.

The only U.S. House campaign that has provided comment in response to an e-mail request sent Monday morning after the House rejected the bill is that of Republican 2nd Congressional District candidate Ed Tinsley.

“Congress needs to get this right and instill some level of confidence amongst the American people and the world at large, which is watching closely what’s going on here,” Tinsley spokesman Jim Pettit said. “Pension plans and lifetime savings are at risk, as is the prospect of a downward spiral in all of the credit markets — not just home mortgages.”

Pettit said people in southern New Mexico “need to get their money’s worth from any rescue plan. Somehow, left out in all of this is how a rescue plan helps the average homeowner in southern New Mexico — people who played by the rules, signing up for loans they could afford and avoiding reckless speculation.”

“Unfortunately, however, everyone is at risk and Congress needs to step up and provide a short-term plan to unfreeze the credit markets, followed up by serious, long-term reform of our financial regulators,” Pettit said.

Republican 3rd District candidate Dan East’s campaign said a statement was coming, but none has arrived. Republican 1st District candidate Darren White’s spokesman, Stephen Schatz, said White would let those who had to vote on the bill do the talking, at least at this point.

The campaigns of the other federal candidates haven’t responded to the e-mail request for comment.

This must be a difficult position for all of them. Democrat and Republican, the U.S. House candidates are faced with a situation in which their party’s presidential candidate supported the bailout bill but their U.S. Senate candidate opposed it. And, as the Albuquerque Journal is reporting, congressional phone systems have been flooded with calls in opposition to the bailout proposal.

Perhaps most of the candidates think the best bet is to wait it out and see what happens next.

An analysis by the Washington Post’s Chris Cillizza suggests maybe so, at least in part.

Here’s the kicker of that analysis:

It’s no coincidence then that of the 205 Members who voted in support of the bill today, there are only two — Reps. Chris Shays (R-Conn.) and Jon Porter (R-Nev.) — who find themselves in difficult reelection races this fall. The list of the 228 “nays” reads like a virtual target list for the two parties.

So what do you think? Was it just election year politics–one of those moments when the American public actually has some sway on Capitol Hill? Or was it a real revolt based on what these legislator’s really believe?