ATLANTA - The market crisis has not only risen to be the top issue in this year's Senate race but has also highlighted the differences among the candidates.
While incumbent Republican Saxby Chambliss, Democratic nominee Jim Martin and Libertarian Allen Buckley share a lack of enthusiasm for a $700 billion bailout, they have different reasons for their views.
In a year in which a weak economy has already stirred an anti-incumbent mood among voters, Mr. Chambliss recognizes he'll have to devote much of the remainder of his campaign to explaining his vote on it.
"Whatever we do, honestly, is not going to be popular with lots of people in Georgia," he said.
Mr. Martin held a news conference last month blaming Mr. Chambliss for supporting the crisis through certain bills he's voted for and by supporting President Bush, who the Democrat said was lax in enforcing mortgage regulations.
"I'm the sole reason, if you listen to him, that we're in a financial crisis in this country," Mr. Chambliss quipped to reporters. "Voters in Georgia are a lot smarter than what some politicians think they are."
While voters may want to blame someone else, they should be looking at themselves or their neighbors for loans that couldn't be afforded on the available income, said Jeff Metter, a professor of banking and finance at the University of Georgia.
"The problem is that too many mortgages were made that didn't make any economic sense. You can't blame Congress or President Bush," Mr. Metter said.
Mr. Martin, though, won't let the senator off the hook.
"He's supported the Bush administration in not adequately enforcing the Securities and Exchange Commission regulations that are on the books," Mr. Martin said of Mr. Chambliss.
The challenger details a handful of bills Mr. Chambliss voted for while in the House that Mr. Martin said set the stage for the current crisis. But all received bipartisan support and were signed into law by President Clinton.
Mr. Martin notes there is blame for both major parties.
Mr. Buckley, meanwhile, figures the crisis improves his chances because he has more experience dealing with financial matters as an attorney and certified public accountant specializing in taxation.
Here's a comparison of their views
The incumbent said the crisis worries him because of its possible impact on ordinary Americans.
"I'm concerned about people's mortgages being foreclosed on. I'm also concerned about the safety and security of every banking institution in the country," he said, adding that he would prefer that taxpayers not get stuck with the bill.
His prescription for a bailout would include:
- A cap on executive compensation. "I'm not going to vote for any bill that allows for golden parachutes to be paid to executives at any banks."
- Oversight of the bailout. He wants a panel to supervise the Treasury Department's administration of the distribution of funds.
- Means for repayment. He insists that any money received from banks or investment companies getting bailed out would go entirely toward repaying taxpayers and not toward other financial mechanisms.
Democrat Mr. Martin, whose career as a state legislator was marked by his interest in consumer protection, wants to see any bailout focus on workers rather than investors.
"No one is offering us a bailout," he said. "I say it's because we're all middle class, and we're struggling."
His outline includes:
- Payment to mortgage borrowers. Rather than giving tax money to investment companies and banks, Mr. Martin would target homeowners who have suffered foreclosure or are in danger of it, saying the price would be the same as giving the money to Wall Street.
- Added consumer protections. Predatory lending and aggressive marketing of credit cards triggered much of the crisis, he said, vowing to curb both if he could write the bailout plan.
- Restoration of regulations. Allowing commercial and investment banks to merge was a mistake that should be reversed, he argues.
As a Libertarian, Mr. Buckley opposes proposals that expand government or create new agencies, but he acknowledges some type of action is needed to get bankers lending money again.
"We've got to find ways to make sure that the people who are responsible for this pay for it," he said. "It may mean that right now money is borrowed and is dealt with the way the Treasury wants to do it, but eventually taxpayers have got to be made whole."
He opposes allowing homeowners to renegotiate their mortgages or getting payments from a bailout . And he opposes setting up a panel to supervise the bailout , saying it would only create more bureaucracy.
His blueprint for a bailout would include:
- Regulation of the Federal Reserve. Mr. Buckley accuses the Federal Reserve Bank of dropping interest rates too low in 2001-02 and luring people to borrow money they couldn't afford to repay. He calls for limiting the Fed's mission to only maintaining stable prices and not worrying about unemployment.
- Repayment through a surtax. Any person or company receiving funds from a bailout would be taxed an extra 15 percent above what they would already owe until full repayment.
- Morris News Service