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Senate lawmakers will meet tonight to pass legislation that investors hope will stabilize a volatile stock market and restore some faith in America’s banking system.
Sen. Claire McCaskill spoke with the media this morning to give an update of an amended bill that the House of Representatives failed to pass earlier this week that the Senate will consider tonight.
One major change to the bill is the amount of money that will be authorized to purchase assets from failing banks. McCaskill said only $350 billion would be authorized initially and the plan will be reevaluated when the next congress convenes in January.
McCaskill said the new version of the bill is much different than what the House voted on and includes protections for taxpayers. Although she doesn’t like the bill, she said she would vote in favor of it because something needs to be done.
“The gears of our economy are frozen right now because there is no lending going on or the lending that is going on is at such inflated interest rates,” she said. “The bill we’re voting on I don’t like, in fact I think it stinks. I’ll hold my nose and do what I think is best for our country now.”
McCaskill said this is not a blank check bailout for Wall Street. She said the new bill contains strong provisions against golden parachutes for executives of these companies.
“This is not about these yahoos on Wall Street who in the name of greed have run this thing into the ground in terms of our financial institutions,” she said. “We are not going to make them whole.”
She said the Bush Administration has done nothing over the last eight years to be concerned with regulations on Wall Street. In fact, she says just the opposite.
“The idea that this administration allowed the Wild West to take over Wall Street is ludicrous,” she said. “It is absolutely insulting that any American would follow a notion of this administration and that this Republican Party have been focused on regulation. It’s been all about deregulating everything,”
McCaskill said she believes Congress needs to act on a bill in the next few days so banks can begin to lend money again. She said she spoke to one small business owner this week that cannot secure loans now and is looking at an interest rate that is more than 10 percent when it was less than four percent weeks ago.
“The problem that we have right now is that these assets don’t have a price,” she said. “Everyone is afraid to price them because they don’t know what they’re worth. Once we put a price on them, then that allows everyone to get some certainty to what stuff is worth. That’s the sand in the gears that we are going to wash away.”
McCaskill said she has seen the polls and that she realizes that this bill is not popular, but she believes it is necessary and she believes once Americans become educated to the consequences they will realize the need.
“There is no perfect solution,” she said. “If there were, it would have happened already.”