Tester Touts Bailout Opposition in New Mailer

By Beacon Staff

HELENA – U.S. Sen. Jon Tester is touting a “record of opposing all bailouts” in a recent mail piece sent to Montana homes, despite his support for the mortgage rescue.

Tester argues that he does not consider the Bush Administration-era rescue of Fannie Mae and Freddie Mac a bailout since they had government backing prior to the intervention.

The Republican campaign of U.S. Rep. Denny Rehberg immediately jumped on Tester’s claim, saying the mortgage bailout was perhaps the worst one. Rehberg and Tester are locked in a tough election battle as the economy and government spending dominate national political debate.

Tester wrote in the U.S. Senate direct mail piece that he has a “record of opposing all bailouts, including the bailout of Wall Street and the U.S. auto industry.”

Tester was the only Senate Democrat to oppose both the auto and Wall Street bailouts.

But he did support the bipartisan vote approving the 2008 mortgage relief bill that came to the rescue of Fannie Mae and Freddie Mac. Many consider that a federal government bailout as well, and it is frequently called a bailout in news coverage.

Tester spokesman Aaron Murphy said the senator does not consider the takeover of Fannie Mae and Freddie Mac in part because the other bailouts rescued private industries.

“There’s a reason nobody in Montana except Dennis Rehberg considers this vote a bailout: It wasn’t a bailout,” Murphy said. “Jon helped write the bill that ended taxpayer-funded bailouts of Wall Street forever.”

Murphy said Tester supported the Wall Street reform in 2010 that he argues will prevent future bailouts of private banks, which Tester opposes.

Rehberg, a six-term congressman, voted against both bailouts, as well as the Fannie Mae and Freddie Mac rescue.

A spokesman for Rehberg’s Senate campaign countered that the mortgage rescue was a bailout. Brian Barrett pointed out that Fannie Mae and Freddie Mac were private companies, despite their past backing from the government.

“Not only is this a bailout, plain and simple, it is possibly one of the worst bailouts that you could vote for,” Barrett said. “The actions of these two corporations contributed greatly to the bottom falling out of America’s housing market.”

An economist who has tracked the banking industry said he thinks bailout is an accurate term for the government’s actions in the case of the mortgage giants — perhaps more so than in the case of the banking industry bailout.

“The government put Fannie and Freddie into receivership, so the term ‘bailout’ is much more accurate than it is in the case of banks,” said Greg McBride, a senior financial analyst at Bankrate.com.

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