Vote Shifts Save the TARP
The president signed the Emergency Economic Stabilization Act of 2008 within hours of the House passing the bill on October 3rd. As the administration begins the important work of implementing the Troubled Asset Relief Program (TARP), we thought it would be instructive to explore the reasons why House Democrats and Republicans shifted their votes so that Monday’s defeat became Friday’s victory.
Although one Democrat switched from a yes to no (Rep. Jim McDermott, D-WA), 33 House Democrats switched their votes to support the rescue plan on Friday. The fiscally conservative Blue Dog Caucus, which had been almost evenly split on Monday added five more to the yes column on Friday. A large number of freshman Democrats and Congressional Black Caucus (CBC) members, many of whom had been skeptical of the bailout plan on Monday, shifted in support of the final package. The 31 of 39 CBC members who voted yes said they did so based on the promises of Sen. Barack Obama, who said he would deliver economic stimulus legislation, a change in bankruptcy laws, and more regulation of Wall Street early in an Obama Administration. Democrats also picked up seven California members due to the escalation of financial problems in their state.
On the Republican side, ten Republican Study Committee (RSC) members switched from no to yes. Given how critical the RSC had been of the bailout, that was a substantial shift. The Securities and Exchange Commission’s midweek regulatory adjustments on mark-to-market accounting rules, the FDIC insurance increase, the addition of important tax extensions, and a heavy lobbying blitz by business groups all contributed to changing GOP votes. In total, 25 Republicans switched from no to yes, plus one more member who had not voted on Monday (Rep. Jerry Weller, R-IL), supported the bill on Friday.
