By CHARLES OWENS
WASHINGTON — Area lawmakers warned Monday that the defeat of a $700 billion financial bailout plan could hit close to home for residents and businesses in southern West Virginia and Southwest Virginia.
“The availability of credit is diminishing more by the day,” U.S. Rep. Rick Boucher, D-Va., who voted in favor of the emergency legislation, said. “And within a matter of days, it will be felt by virtually anyone who is seeking to borrow money. Businesses are having a very hard time being able to finance their day to day operations by issuing commercial paper, and banks are reluctant now to loan to each other unless a very high grade of collateral is exchanged for the loan, and that is very different from the loans that used to be made simply on the signature of a bank.”
Boucher said everything from home loans and car loans could be impacted, adding that access to credit will be “severely restricted” for companies both “large and small.”
U.S. Rep. Nick Rahall, D-W.Va., also voted in favor of the emergency financial plan. Rahall said savings and jobs in West Virginia could be impacted by the failure of lawmakers to adopt the Emergency Economic Stabilization Act.
“We will continue to work for an answer that protects the taxpayers and provides a firewall for West Virginians whose savings, jobs, and homes could be hurt because of this financial fiasco,” Rahall said. “This was not a wholesale bailout, as important changes were made from the initial proposal to provide a return to taxpayers."
When asked if lawmakers did a good enough of a job in explaining the bailout plan to their constituents, Boucher said he understood why many citizens had questions about the plan.
“I have no doubt that there were many questions in people’s minds about these provisions because they were not finalized until just 48 hours ago,” Boucher said. “But I have been involved in the conversations that led to the legislation put before the House. I am comfortable the provisions in this measure would have assured no losses to the federal government, and the restoration of confidence in our credit markets.” Boucher blamed Republicans in the House for the failure of the legislation.
“Most Democrats voted yes,” Boucher said. “The Republican House leadership encouraged a yes vote. Obviously the president encouraged a yes vote. Both presidential candidates encouraged a yes vote. But Republicans by a 2 to 1 (margin) chose to vote no.”
Boucher said the measure as proposed would not have been costly to tax payers.
“It would have restored confidence in the stability of banks, and the stability of money market mutual funds,” Boucher said.
— Contact Charles Owens at cowens@bdtonline.com
