Kuhl, Clinton weigh in on financial crisis

Julie Sherwood

While a local congressman who voted against a $700 billion Wall Street bailout is calling for an entirely different proposal, one of the state’s senators is urging a quick vote on a modified version of the failed plan.

The House rejection of the plan Monday, which led to a record plunge on Wall Street, could lead to “a mounting economic crisis” if Congress fails to act quickly, U.S. Sen. Hillary Rodham Clinton, D-N.Y., said Tuesday in a conference call with reporters.    

The Senate “is ready to act,” said Clinton, adding that U.S. Senate Majority Leader Harry Reid has said he believes there are enough votes in the Senate to pass a bailout bill.

“We need to do what we have to do to stabilize our nation and the entire world,” said Clinton. She said she would have voted for the bailout plan, which she said was not giving “a blank check” to financial institutions, as critics have charged. The bill had already been negotiated and amended in Congress since it was initially proposed, she said, and “was a compromise” that included a sound system “of checks and balances.”

Meanwhile, U.S. Rep. Randy Kuhl, R-Hammondsport, held his own press call with reporters, claiming the bailout plan “asks taxpayers to bail out the indiscretions of Wall Street.”

Kuhl was one of 228 House members who rejected the measure. Another 205 House members, including U.S. Rep. Jim Walsh, R-Syracuse, voted in favor.

Kuhl on Tuesday pitched a plan similar to one used in the early 1980s during the savings-and-loan crisis.

At that time, Congress enacted the “net-worth certificate” program that involved the Federal Deposit Insurance Corporation resolving a $100 billion insolvency in the savings banks for a total cost of less than $2 billion. The program was designed to shore up the capital of weak banks to give them more time to resolve their problems; it involved no subsidy and no cash outlay. It essentially involved the federal government loaning certain banks credit if they demonstrated they could pay the money back. Kuhl couldn’t say if such an idea would get enough support to make it to the House floor for a vote, but added, “I am hopeful.”

As for Clinton, she pointed to legislation she has already introduced that she said would strengthen the financial system. It includes the 21st Century Housing Act, which would make FHA loans available to more Americans and the Home Ownership Preservation Act. She said the home-ownership bill would eliminate abusive lending practices, crack down on unscrupulous brokers and provide financial assistance to states to expand their foreclosure-prevention programs.

“We have to go back, in a bipartisan manner, and face up to our differences and make decisions,” said Clinton.

Contact Julie Sherwood at (585) 394-0770, ext. 263, or