Foster and Oberweis sound off on bailout

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Federal legislators Wednesday took the first step toward using $700 billion of taxpayer money to save banks and money lenders who made bad loans that couldn't be repaid. After the U.S. House shot down a version of the bailout bill Monday, senators began adding provisions meant to make the bill more appealing to the Democrat-led Congress. That includes incentives like insuring bigger bank accounts and a $110 billion tax break for middle-income taxpayers. Jim Oberweis is a Republican from Illinois seeking to represent the 14th Congressional District, a seat now held by Rep. Bill Foster, D-Geneva. Oberweis made the bailout a campaign issue Wednesday when, in a teleconference, he keyed in on the issue to draw a line of distinction between him and Foster. Oberweis said he supports the new additions to the bill, but still opposes the crux of the $700 billion bailout, and would have voted against it Monday because of it. That money would be used to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and keep the economy from a deep recession. Oberweis still supported raising the insurance cap on private bank accounts from $100,000 to $250,000 - a provision added to the Senate bill this week. He also suggested issuing a new class of stock that wouldn't be subject to capital-gains tax. "This could unlock tens of billions of dollars in private equity capital and provide a real shot in the arm to the economy," Oberweis said in a news release. He also voiced support for a move the Securities and Exchange Commission made Tuesday to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market. "I cannot give you a guarantee or even 90 percent certainty that if we do nothing, it's going to be a disaster for our economy," Oberweis said. "My belief is that if we do nothing, there's a 75 or 80 percent chance that ... everything will work out fine." Proponents of the bailout say the government eventually could sell the devalued assets at a better price, reducing the program's final cost. As for House passage, there were worries that the tax breaks would cause some conservative-leaning Democrats who voted for the rescue Monday to abandon it because it would swell the federal deficit. "I'm concerned about that," said Rep. Steny Hoyer, D-Md., the majority leader. Democrat and Senate Majority Leader Harry Reid of Nevada disagreed with Oberweis' belief that a passive role could end positively. "Inaction is not an option," Reid said. "This is not a bailout for Wall Street. It's a bailout for our country." Foster, Oberweis' opponent, shared Reid's support for an immediate bailout, even without provisions like the $110 billion tax break or expansion of bank insurance coverage. Monday, Foster was among the minority of representatives who favored the resolution in its earlier form, which lost with a 228-205 vote. "This bill was far from perfect," Foster said in a news release, "but in an extremely tough and close vote, I supported the Emergency Economic Stabilization bill to ensure the economic hardships facing our middle-class families and small businesses all over the 14th district would not worsen." "The bill was the tough medicine we needed to get the economy back on solid footing." The bill will go to the House for a vote on Friday. If approved, President Bush would have to sign the bill before the money would begin to be released. He is expected to do so. The Associated Press contributed to this report.