WASHINGTON – Montana Sen. Jon Tester says he is opposing a $700 billion financial industry bailout bill because it doesn’t do enough to protect taxpayers and small businesses.
Tester is splitting with fellow Democratic Sen. Max Baucus, one of the lead negotiators on the bill. Baucus is supporting the bill, arguing the plan is not perfect but it will help guard against a bigger crisis.
The Senate scheduled a vote Wednesday evening on the bill after the House rejected a similar bailout Monday. Senate leaders agreed to add tax breaks for businesses and the middle class and increase deposit insurance in an attempt to revive the legislation rejected by the House.
Tester, a member of the Senate Banking Committee, said the bill doesn’t do enough to rein in excessive salaries of Wall Street executives. He said he thinks bonuses for Wall Street executives should be eliminated, not just curbed.
Some people in Montana have told him cuts in executive pay should go even further, he said.
“They tell me they’d like to see these people in orange suits picking up garbage by the side of the road,” Tester said.
He said the bill needs to be more targeted to homeowners and small businesses, and should have more regulation of the marketplace. The legislation should have more of a grassroots approach, he said.
“You grow the economy from the ground up and that’s investing in infrastructure,” he said. “Think what kind of infrastructure investment we could do with $700 billion.”
Tester, who earlier this year asked the government to investigate the downfall of investment bank Bear Stearns and whether it was related to insider trading, says he has had questions about the rescue package from the start and he’s not sure that the bill is going to fix the problem.
“I don’t think this is the right thing to be doing,” he said. “The bill needs more work.”
Baucus, the chairman of the Senate Finance Committee, disagreed.
He said he shares citizens’ anger over the bailout but believes that Congress improved upon the Bush administration’s original proposal, which gave the treasury secretary power to orchestrate the bailout.
He said the problems in the financial markets are everyone’s problem.
“If a bank cannot get credit, neither can its customers,” Baucus said. “And its customers are the local hardware store and the car dealership down the street.”
Baucus was a lead negotiator on the issue of executive compensation in intense discussion on the bill over the weekend. Several officials said he yelled at Treasury Secretary Henry Paulson at one point over the administration’s reluctance to restrict “golden parachutes” — huge severance packages — for executives at the troubled companies.
Baucus also lauded a provision in the bill that would require a special inspector general to oversee track and protect taxpayer dollars and the large package of tax breaks, which came out of his committee.
That package will create and extend incentives for renewable energy and keep the alternative minimum tax from hitting 20 million middle-income Americans — including more than 49,000 Montanans, according to Baucus.
“This is the right call,” Baucus said. “Adding this tax relief will ensure that regular working Americans get financial help in this time of crisis.”
Montana Rep. Denny Rehberg, a Republican, joined 132 other Republicans and 95 Democrats in voting against the deal Monday. The surprise rejection caused markets to plummet.
Rehberg said then that he decided the bill would not do enough to help community banks back home or prevent the problem from happening again.
A spokesman for Rehberg said Wednesday that he was not available for comment and is still monitoring the Senate changes.