SC senators split over economic bailout plan

Even though they’re from the same party, South Carolina’s two U.S. senators don’t agree on the $700 billion economic bailout plan being debated in Washington. Sen. Lindsey Graham says the bailout is a bad choice, but not passing it would be catastrophic to our economy. Sen. Jim DeMint says passing the bailout will worsen our debt and weaken the dollar.

Sen. DeMint says government meddling is at least partly to blame for the crisis it’s now trying to solve. “This is a failure because government injected itself into the free market, created this easy credit, these guaranteed loans, and these loans are what have turned into the bad paper that are bringing all these financial institutions down,“ he says.

He says the natural risk that comes with investing built accountability into the system. “But the government has come in and removed that accountability with taxpayer guaranteed loans, and now they’re talking about a trillion dollars more money that we’re going to throw at this problem. And with the debt that we already have as a country, I’m afraid the rest of the world will lose confidence in the dollar,“ Sen. DeMint says.

But Sen. Lindsey Graham says he’s got to opt for the bad choice, the bailout, over the catastrophic choice of doing nothing. He says allowing these financial corporations to fail would cause “a catastrophic financial meltdown throughout the nation and eventually the world.“

Not passing the bailout, he says, would have a big impact on South Carolinians. “If we don’t get these bad debts out of the system, then we’re not going to have availability of credit to the average person. That means people are going to lose their jobs because companies are going to fold,“ he says.

“So if you’re a South Carolinian in business and you need to borrow money to expand your business, there will be no money available. If you’re trying to get a student loan in the private sector, you may not be able to get any money to go to school. If you’re trying to buy a house, there’ll be no bank able to lend you money. That’s what it means,“ he says.

Federal Reserve chairman Ben Bernanke says credit has already become more difficult to get because of the current crisis.

But Graham’s opponent in the upcoming election, Democrat Bob Conley, thinks Congress should not pass the bailout and the companies in trouble should be allowed to fail. He says of the bailout plan, “It’s going to again devalue our currency, with more money being put out there. And secondly, it’s another case of the middle class having to pay for the failures of the fat cats on Wall Street.“

Sen. Graham says he wants changes in the plan to make sure company CEOs are not able to make bonuses after running their corporations into the ground. He also wants a mechanism that would allow homeowners to renegotiate their mortgages if the value of their home has dropped significantly.