Vote to aid troubled banks roils GOP primaries, claims one senator, more lawmakers could fall

By Liz Sidoti, AP
Monday, June 21, 2010

Bailout vote could claim two more GOP lawmakers

WASHINGTON — One Republican senator lost his job because he voted for the 2008 bank bailout. Two other GOP lawmakers may be next.

Former President George W. Bush’s lifeline to financial institutions is roiling GOP primaries, with Republicans who reluctantly supported it facing the ire of conservatives furious about budget-busting spending and tea partiers grousing that Wall Street came before Main Street.

Economists credit the bailout with staving off deeper economic turmoil. Banks have paid back much of the money — plus interest. And GOP lawmakers were being loyal Republicans in following the wishes of their president.

Yet some GOP primary voters seem to be ignoring all that in what’s shaping up to be an anti-establishment election year. Republican and Democratic pollsters alike say that when it comes to the bailout vote, people seem to see Washington and Wall Street in the same light — conspiring against taxpayers.

That’s especially problematic for Republican lawmakers who face an electorate dominated by fiscal conservatives and tea party faithful. Thus, in dozens of House, Senate and gubernatorial races, Republican lawmakers are struggling to explain their support for a bailout that to many symbolizes government overreach.

“I had to make a decision based on the information that I had at the time. And I did. And I voted for it,” four-term Rep. Gresham Barrett said last week, repeating a poll-tested answer during a South Carolina gubernatorial debate after opponent Nikki Haley asked him if his vote were a mistake.

He added: “Was it implemented like it should have been? No, it wasn’t. And I am going to continue to fight to ensure that every dollar is returned to taxpayers and it never happens again.”

Polls show Barrett trailing Haley — a state legislator who has the support of tea party activists — ahead of Tuesday’s runoff for the GOP nomination. She beat him handily two weeks ago but didn’t earn the 50 percent needed to win the nomination outright so the two are going head to head in a contest growing nastier by the day.

South Carolina six-term Rep. Bob Inglis, who also voted for the bailout, also finds himself explaining his bailout vote.

Challenger Trey Gowdy campaigned as a bailout opponent and made the race a referendum on Inglis’ vote, casting the incumbent as not conservative enough for the district. Gowdy, the Spartanburg prosecutor, forced Inglis into a runoff.

Americans always were skeptical of the $700 billion package that Bush rolled out in 2008 after a series of bank failures. Any support that was there for the measure dropped significantly as top officials at bailed-out institutions were paid handsome bonuses and high salaries.

Public opinion is more sour even though the economy has stabilized — and the bailout price tag isn’t nearly as high. In May, the Treasury Department predicted a $105.4 billion cost because it has made more money than it expected on dividends, fees and other proceeds from banks that took bailout money.

Still, two-thirds of Americans say the federal government shouldn’t have helped U.S. banks and financial institutions, according to a CBS poll taken in May. And a CBS-New York Times survey in April found that only 39 percent said the bailout was necessary to emerge from the recession; 51 percent said the economy probably would have improved without it.

The warning shot to lawmakers who voted for the measure came last month when Sen. Bob Bennett lost his quest for a fourth term in conservative Utah. Conservatives at the GOP state convention punished him for his support of the bailout, officially known as the Troubled Asset Relief Program.

Businessman Tim Bridgewater and attorney Mike Lee will face each other Tuesday in the GOP primary. It’s likely whoever wins will become the next Utah senator. A Democrat hasn’t won a Senate race in Utah since 1970.

Earlier this year, the issue contributed to Texas Sen. Kay Bailey Hutchison’s loss in the Republican gubernatorial primary in Texas against Gov. Rick Perry; she was derided as “Kay ‘Bailout’ Hutchison.”

Arizona Sen. John McCain is facing similar criticism.

He is taking heat for his vote from his GOP primary rival, former Rep. J.D. Hayworth, who points out McCain’s support for the measure at every turn. Says Hayworth: “Despite trying to propagate a perception of fiscal responsibility, our friend Mr. McCain is in no position to lecture any of us.”

McCain rails against the bailout but doesn’t highlight his support of it. He recently told an audience in Arizona: “As much as I respect former President Bush, America was told that if we passed this TARP, they would go to the housing market and stabilize the housing market. Instead, what did they do three days after it was passed? They went and bailed out their financial buddies on Wall Street, who are now doing fine.”

Still, a bailout vote doesn’t mean a certain defeat.

Rep. John Boozman of Arkansas won his Senate primary, even though his seven opponents hammered him on the issue. And several House Republicans survived primaries focused on the issue, including Mary Bono Mack and Dan Lungren in California, Charlie Dent in Pennsylvania, Pat Tiberi in Ohio and Lee Terry in Nebraska.

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