The financial crisis on Wall Street moves to the nation's capital this week, as Congress considers a record-setting bailout package for the financial industry. All of this has Vermont's congressional delegation pledging to make rich investors, not working Vermonters, pay for it.
The Bush administration this weekend asked Congress for the authority for the government to purchase $700 billion worth of bad debt to alleviate the threat of a financial meltdown. But Sen. Bernie Sanders (I-Vt) says he'll oppose the deal unless the burden of paying for it is placed on wealthy investors who profited from the system.
"When the wealthiest people have made huge sums of money in the last eight years, they have got to contribute their fair share to the bailout," he told Channel 3. "I don't want it being on the middle class, when they already have seen a decline in their standard of living."
Rep. Peter Welch (D-Vt) also worries about an additional impact on the middle class.
He said, "The question for me, the fundamental question, is what do we have to do to protect the 401Ks, the IRAs, the college accounts and the money market deposits of average Vermonters and average Americans. That's the first and foremost question for me. What do we have to do to protect middle class investors, folks who had no culpability in creating this mess."
Sen. Patrick Leahy (D-Vt), who stayed in Washington over the weekend, issued a statement that read, "I would like to see progress toward a balanced bill that also helps overburdened middle class families. It should not include get-out-of-jail-free cards for those whose greed caused this mess."
Economist Art Woolf of the University of Vermont says although the financial problems centered on bad home mortgages that were packaged and sold -- or securitized as they call it in the financial business -- there is concern that the meltdown could spread to other sectors of the economy.
"For example, we've securitized not just mortgages but we've securitized credit card debt, we've securitized auto loans," he said. "And so right now those are probably OK. No one really knows. But if those things turn out to be not worth the paper they're printed on, like the housing debt was, then we could have a whole other dimension to this thing."
On top of the uncertainty about the health of the financial system, presidential election year politics means that the pressure is piling on Congress to get something done -- this week.
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