Bennington Banner - Welch Defends Bailout Vote at Debate

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Bennington Banner - Welch Defends Bailout Vote at Debate

Democratic Rep. Peter Welch faced four challengers at a forum Tuesday night, and each targeted his recent vote for a $700 billion federal bailout plan.

The forum, held at the Bennington Fire Facility and attended by about 50 people, was dominated by the bailout plan, which Welch, who is seeking his second term in the House, voted for. It also came on the heels of an announcement by U.S. Treasury Secretary Henry Paulson that at least $250 billion will be used to buy ownership stakes in nine different banks. The idea is for the cash infusion to free up credit.

Welch said Paulson's move is designed to help banks get capital. In return, he said, taxpayers will own shares in the banks have first priority on any dividends.

"This makes more sense than buying up bad assets, frankly," Welch said.

But Welch's challengers, already against the bailout and Welch's yea vote in Congress, said they are further angered by the move.

Independent candidate Cris Ericson said the move by Paulson has shifted the country from its core principles. "As of today, this is not a capitalistic democracy anymore," she said. "The United States government owns a percentage of each of these nine banks."

Thomas Hermann, a Progressive, said a government infusion of cash into the banks will result in a rise in their stock values. Some limit must be set so investors do not make money on the backs of taxpayer dollars, he said.

Independentcandidate Michael Bethel, of Bennington, expressed his concern with Paulson's announcement. "We have a free market system. That's what our country is based on, and I feel very strongly that we are teetering on the edge of socialism," he said.

Bethel called for the banking industry to be overhauled, and chastised Welch for his vote and for backing the bailout bill that was infused with "pork," despite Welch's stated opposition to wasteful earkmarks.

"Peter says that and it's all good, but then he votes for the $700 billion bailout," Bethel said. "I think the bailout to Wall Street is going to be terrible for our country."

Jerry Trudell, who is running as a member of the Energy Independence Party, said Congress should have worked to pass a plan that directly helps Americans facing foreclosure. "Why didn't we consider bailing out individual homeowners?" he said. "Maybe we need more imagination."

Welch said the effort was made, but could not make it through the House. "We should have help for the homeowners," he said. "We had a problem getting the votes. We didn't succeed on something that I think would be wise policy."

But Welch defended his vote, calling the current crisis "a Depression-style squeeze on credit."

"It means the car dealer down the street is paying 40 percent more just to keep his inventory," Welch said. "For a lot of us in Vermont it's hard to understand, and the reason is because we've paid our bills."

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