As Congress wrestles over the biggest bailout in American history, N.C. congressional candidates are jumping into the fray – and on each other.
“Voters want to hold people accountable for the mess our current representatives have gotten us into,” said Democrat Daniel Johnson, who's challenging Republican U.S. Rep. Patrick McHenry in the10th District, which includes Hickory. “Absolutely it's a campaign issue.”
Johnson is one of several challengers trying to hold incumbents partly responsible for what former Federal Reserve Chairman Alan Greenspan calls a “once-in-a-century” financial crisis. Congress is weighing a $700 billion fix to a problem that for many has no good solution.
“Voters are going to want to hold somebody responsible and Republicans, because we have a Republican president, (are) first suspects,” said Republican strategist Carter Wrenn of Raleigh.
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A Pew Research Center Poll released Tuesday found that 57 percent of Americans believe a bailout is the right step. But a Los Angeles Times/Bloomberg Poll showed 55 percent of Americans oppose it.
The crisis has focused anger not only on Wall Street but on CEOs with high salaries and golden parachutes. It also could focus attention on congressional races normally overshadowed by the high-profile presidential contest.
In remarks to the Senate Banking Committee on Tuesday, Republican Sen. Elizabeth Dole acknowledged voters' frustration. North Carolinians, she said, are angry over the “costly and reckless” behavior of Wall Street.
“My constituents and … taxpayers across the nation are asking how we arrived at this crisis,” said Dole, who is running for re-election Nov. 4. “It is infuriating.”
Dole: Oversight bills died
Dole's opponent, Democrat Kay Hagan, calls it “outrageous” that the government has found itself in the position of bailing out Wall Street. She accuses Dole of doing little to help avert the crisis as a member of the banking committee.
Hagan spokeswoman Colleen Flanagan said Dole's “desire to examine the causes, implications of turmoil now is the very definition of a day later, dollar short.”
Dole calls Hagan “dead wrong.” She pointed to her sponsorship of bills last year – as well as in 2003 and 2005, when Republicans controlled Congress – that would have created an oversight agency for mortgage giants Fannie Mae and Freddie Mac, now under federal conservatorship.
“We submitted legislation and stuck our necks out trying to rein in Fannie Mae and Freddie Mac,” Dole said. None of the bills ever passed.
Democrat Larry Kissell, challenging Republican Rep. Robin Hayes in the 8th District, which stretches from Charlotte to Fayetteville, said in a statement that “Hayes has been part of the problem the last 10 years.” He pointed to Hayes' support of a 1999 bill that deregulated the financial system by removing the last vestiges of Depression-era laws governing banks, insurance companies and securities firms.
But the bill passed overwhelmingly with the support of 138 Democrats, including those from North Carolina.
“If he really believes what he's saying, why isn't he attacking the Democratic members too?,” says Steve Quain, Hayes' campaign manager.
Johnson, of Hickory, calls McHenry “one of the most vocal critics of regulation.” He points to a 2005 article in which McHenry defended so-called sub-prime lenders as giving people needed options in mortgage financing. Many blame sub-prime loans for sparking the current crisis.
That same year, McHenry supported legislation like Dole's to further regulate the nation's biggest mortgage holders.
“He supported the reform and regulation of Fannie Mae and Freddie Mac that could have averted this crisis,” said McHenry spokesman Brock McCleary.
Cobb: Blame for both sides
Republican Ty Cobb Jr., a Rowan County Republican running against Charlotte Democratic Rep. Mel Watt, says blame goes both ways.
“There are probably some Republicans who have sat on their hands, too,” he said. “But obviously Congress is controlled by Democrats.”
One candidate not pointing fingers is Charlotte Democrat Harry Taylor. He's challenging Republican Rep. Sue Myrick in the 9th District.
Taylor says he supports a bailout as long as it includes provisions such as a ban on extravagant severances for CEOs of companies that benefit. But his campaign manager, Maria Smithson, said, “It's not time for anybody to use (this) as a campaign tool.”
“Our campaign feels it's time for Congress to buckle down and do something,” she said. “And using this to campaign negatively serves no purpose for the American taxpayer.”