Coleman sees statesmanship as key to bailout plan
By Tom Larson
Norm Coleman believes partisanship has to take a back seat to statesmanship as the U.S. faces its worst financial crisis since the Great Depression.
"This is a time for leadership and statesmanship," said Minnesota's Republican U.S. Senator in a phone conversation Wednesday. "This is my most challenging time in 32 years in public office."
Coleman is running for reelection against Democrat Al Franken, Independence Party candidate Dean Barkley and others, and it's been a campaign laden with partisan political attacks.
Taking on the financial turmoil that has come to a head the last month on Wall Street, however, requires that lawmakers and Bush Administration officials quell partisan rancor, Coleman said.
"There's great danger," said Coleman, who along with other lawmakers is trying to hammer out a deal on a proposed $700 billion bailout of the nation's financial sector. "These are uncharted times, waters we haven't been in before. The main issue is taxpayer protection."
Lawmakers are preparing to recess until after the Nov. 4 elections, but the bailout proposal must be dealt with first. A decision needs to be made by the weekend, Coleman said.
Franken on Tuesday issued a statement on what he believes the bailout plan should cover, and he questioned Coleman's assertions that the plan could make money in the long term.
"If we've learned anything during the Bush-Coleman era, it's that when we hand over tax dollars to these folks, we'd better get a receipt," Franken stated. "We need to take action to avoid economic disaster - but the era of putting powerful special interests first and ignoring Minnesota's middle class has got to end."
Franken said the bailout can't be a "blank check," that taxpayers should get an equity stake and that executives can't be allowed to take substantial salaries or severence.
Oversight measures must be beefed up, and homeowners and other consumers must be protected through foreclosure freezes and the creation of a financial instrument protection commission similar to the Consumer Products Safety Commission, Franken stated.
Coleman said work could continue on the plan to ensure safeguards are in place, but that expedience was critical. He recalled a conversation he had with an acquaintance about the situation.
"He told me that we have our quarterbacks in there -- (Treasury Secretary) Henry Paulson and (Federal Reserve Chairman Ben) Bernanke -- and they're calling the play. And we have to run the play," Coleman said. "We're all there, the folks in the huddle and we're working with them on the play. But we have to run the play."
Noting the public's disdain for a bailout plan without restraints on such things as CEO pay and bonuses, Coleman said he is pushing for greater oversight of the financial institutions involved, and he believes Paulson and Bernanke are, too.
"We will make sure there is ample accountability," Coleman said. "The reason (Paulson) kept it (the proposal) so open was that he didn't think Congress would want him to dictate the terms of oversight. Then, they hammered him because there was no oversight."
But Coleman said he's not sure the volatile situation in financial markets, in the U.S. and overseas, would allow Congress to spend too much time fine-tuning a bailout.
"If we can act now, maybe we won't have all the I's dotted and the T's crossed, but it will stabilize the economy," he said. "Then we can work more on oversight when we get back in January."
Taxpayers will be the chief concern, and Coleman said it was possible they might do well financially through a bailout, if it's handled correctly.
He pointed to the $1.2 billion Chrysler bailout in 1979, through which the government recouped the money and made a profit on the loans. The government's stake in the troubled insurance conglomerate AIG came at a price that was 35 times less than the price it was a year ago, Coleman said.
"If you handle the assets right, there's a possibility for a return," Coleman said. "It's not to make (government) a profit center, but there is the possibility for a return."
If there is a return on the bailout money, it should be reserved for debt reduction, he said.
"If we do it right, we're not just throwing money down a pit," Coleman said.