Bailout Consensus Beginning to Crumble?
By Isaac MacMillen
“Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.”—Winston Churchill
It appears that the much ballyhooed “bailout consensus” is finally starting to crumble. But, only time will tell.
In a shocking turn of events, a nearly a dozen long-standing Democrats broke ranks with their party leadership—and the high-riding Obama Administration—to give the Republicans enough upport to turn back what could have been a deadly contractual crisis, one that plunged the courts into a bureaucratic abyss.
The Senators joined forces in opposing a cloture vote on H.R. 1106, a bill that would have licensed bankruptcy judges to “help” banks and debtors who find themselves unable to fulfill their financial obligations. In an unprecedented judicial power grab, the bill would have granted the courts authority to renegotiate mortgages, reset contracts to allow borrowers to avoid foreclosure—and force their banks to eat the cost.
And for those banks that are risking collapse, the judges could perform their own mini-bailouts—taxpayer-subsidized, of course.
Senators Max Baucus and Jon Tester (both MT), Mark Pryor and Blanche Lincoln (both AR), Ben Nelson (NE), Mary Landrieu (LA), Tim Johnson (SD), Thomas Carper (DE), Robert Byrd (WV), and Michael Bennett (CO) helped bolster the Republican ranks, delivering Harry Reid and Barack Obama a crushing 51 vote denial of cloture.
In voting against the legislation, the Senators were no doubt beginning to feel the heat from a growing number of constituents, who are becoming increasingly leery of the seemingly endless bailouts and deficit spending, driving up the national debt until it dumps trillions of dollars of bad debt onto future generations for decades to come. According to a recent Fox News poll, a fully 62 percent of the American people say they believe that government spending is “out of control.”
While only three of the 11 long-term Democrats will face a 2010 reelection, all but Thomas Carper (DE) hail from states that have gone red at some point in the past four years. While most all of them are enjoying decent poll numbers under the current Democratic popularity wave, they no doubt realize that the political situation could reverse course as quickly as the winds of public opinion change.
The nation as a whole is growing less comfortable with the administration's expansionist policies—with Americans feeling that Big Government is more of a danger to the nation than Big Business by a 46-30 margin in that same Fox News poll.
For now, they still appear willing to give the Democrats in Congress and the White House the benefit of the doubt; but once the honeymoon phase is over, the political discontent is likely to grow as the amount owed by the American people continues to rise.
When the time comes, these senators may feel that their only hope may be to sweep their liberal, Big Government votes—bailouts, health care, cap-and-trade, education, and whatever else the Obama administration attempts—under the carpet, and tout their “fierce opposition” to federal judges deciding mortgages.
By then, however, it may be too late. The national debt has grown every single year since 1957, a trend this band of senators is not likely to end. This year it has topped $11 trillion without slowing.
Once that escalating debt begins to take its inevitable toll, the only hope these senators—and all Washington incumbents—may have to salvage their careers will be if they at least feign a true change of heart, and begin championing the cause of less government and greater freedom—starting right now. Otherwise, the ostensible change of heart may come too late to change a very real voter backlash.
There is no question that these senators did well, and should be commended for their vote, politically motivated or not. And one can only hope that these courageous few will not get up, dust themselves off, and continue staggering down the path of Obama-style socialism. Unfortunately, history would seem to show otherwise.
In the least, however, the consensus believing that nobody is allowed to fail appears to be unraveling. And with it, so too may the reign of lockstep handouts, kickbacks, and bailouts. Otherwise, the vote on the cram-down may be nothing more than a brief detour into sanity from the one-way road to perdition.
Isaac MacMillen is a Contributing Editor of ALG News Bureau.