On the bailout bill, the center would not hold

An unusual coalition of the left and right wings of Congress managed to upend a proposed $700 billion bailout of Wall Street, and Iowa’s delegation is a good microcosm of the vote.

Conservative and liberal lawmakers voted down a $700 billion Wall Street rescue package supported by the Bush administration and congressional leaders.

Liberal Rep. Bruce Braley, a freshman lawmaker who represents Iowa’s 1st Congressional District, broke with his fellow Iowa Democrats to side with conservative Reps. Steve King and Tom Latham to torpedo a bill that would have allowed the government to buy bad mortgages and other rotten assets held by troubled banks and financial institutions.

Democrats Leonard Boswell and Dave Loebsack sided with their party’s leadership (and President Bush) to support the measure. In all, 95 Democrats and 133 Republicans opposed the bill, while 140 Democrats and 65 Republicans supported it.

The controversial measure, crafted hastily in the past week in reaction to growing turmoil in U.S. financial markets, has seen opposition from liberals who feel Wall Street should not benefit at taxpayers’ expense and from conservatives who feel it is unprecedented government intrusion in the private sector.

Campaign season also seemed to be a factor. The public has come out strongly against the legislation, so its no surprise that, nationally, only one Democrat and two Republicans facing tough reelection campaigns this November supported the bailout package.

In Iowa, Loebsack and Boswell are expected to cruise to victory this fall, as is Braley. But King and Latham, while still odds-on favorites to win reelection, are facing more serious challenges than they may be accustomed to.

In a statement, Braley said the proposed legislation benefits Wall Street CEOs, while leaving working families to fend for themselves.

“Wall Street greed and lack of oversight by the Bush Administration caused the current problems in our financial markets,” he said. “Now Iowa taxpayers are being asked to save these companies from their irresponsible choices. Working families should not be forced to foot the bill for Wall Street’s mistakes, without stronger language to protect their interests.”

King said the plan would lead to the destruction of American’s free-market system.

“If taxpayers are stuck with Wall Street losses, government will start demanding to socialize the profits of our free enterprise economy,” King said in a statement. “This will lead to socialization of our economy and the end of our freedom.”

Loebsack called the proposal before Congress an improvement on what President Bush and Treasury Secretary Henry Paulson first submitted, and even though it wasn’t perfect it was “in the best interests of the country.

“I fear inaction will result in a widening of this economic crisis and ultimately threatens to cripple our local economies and cause long-term financial damage to hard-working families and Main Street USA,” he said.  “We simply cannot let that happen.”

The plan now faces an uncertain future, though party leaders on both sides of the aisle have said they might consider revising the initiative later this week.