Wrapping up the coverage of NAM activities last week in support of H.R. 1424, the Emergency Economic Stabilization Act.

CNN on Friday interviewed NAM board member Fletcher Steele of Pine Hall Bricks in North Carolina in anticipation of the vote. From the transcript, with CNN anchor Tony Harris posing the questions:

STEELE: Well, first of all, I don’t think this is a bailout of Wall Street. Wall Street has already imploded. This is a bailout for consumers and people in small businesses all over the country. But when this passes, I do think it will give people some confidence.

The stock markets have been dropping. We have our employees coming, asking to take out money out of their 401(k) and take and put it in a mattress.

HARRIS: Yes. Yes.

STEELE: We need people that have the confidence in the banking system, and the confidence and ability to go out and repair their refrigerator in their house or buy a new car or get the kids in school, or clothes or whatever.

And the NAM’s news release hailing passage.

Speaker Pelosi makes the closing speech, highlighting accountability but eschewing the harsh partisan tone that caused so much unhappiness on Monday.

The vote begins on H.R. 1424.

Addendum: Speaker Pelosi noted upcoming hearings. From the House Oversight Committee: 

In light of the dramatic events that have occurred in global financial markets, the Oversight Committee will hold five hearings in October to examine the regulatory mistakes and financial excesses that led to the market breakdowns on Wall Street. In announcing the hearings, Chairman Waxman stated: “This financial crisis has shaken the global economy. Congress cannot wait until a new administration arrives in January to examine what went wrong and who should be held accountable.”

The roll call vote on H.R. 1424, which, as amended, is the Emergency Economic Stabilization Act, plus the tax extenders. The measure passed 74-25.

For more, see documents on the Senate Banking Committee website. Division A (pp.2-113) of the draft legislation is referred to as the Emergency Economic Stabilization Act of 2008; Division B (pp. 113-261) is referred to as the Energy Improvement and Extension Act of 2008; and Division C (pp. 261-451) is referred to as the Tax Extenders and Alternative Minimum Tax Relief Act of 2008.

A good Washington Post editorial, “America’s Second Chance.” We appreciate the fact the Post went to the substance of the legislation; the “you’ll be sorry” argument only carries one so far.

The case for the plan, known formally as the Troubled Assets Relief Program (TARP), does not hinge on its perfection. As we have said, it is possible to imagine alternatives, some of which, such as a direct federal purchase of bank equity, might prove more effective at a lower cost to taxpayers. Or they might not. The point is that TARP is the only plan on the table that has both a reasonable chance of political success and a reasonable chance of economic success. Under the circumstances, which at the moment include a mounting worldwide financial collapse, we do not have time to run a legislative seminar on the theory and practice of financial rescue.

Furthermore, TARP, as modified by Congress after Treasury Secretary Henry M. Paulson Jr. initially unveiled it, is a plausible proposal. The Treasury would purchase currently unmarketable assets from the financial sector, clearing out the accumulated junk paper that is destroying confidence and the flow of credit. Though TARP seeks $700 billion in ultimate authority to buy assets, the likelihood is that the Treasury will pay less than that, because (a) its purchases might jump-start a private market and (b) the government might be able to resell securities for more than it paid. There would be significant oversight and an option for the government to take equity in the firms it aids.

Finally, a protest of political pique. May we please be spared lectures about Wall Street and fat-cat tycoons and the like from members of Congress whose support for Fannie Mae helped block more rigorous regulation of the GSEs? If we have to be lectured to, we’d prefer instruction from observers of financial regulation who had it right all along. If they were right then, good chance they’re right now. Hence, from AEI:

“[Peter] Wallison and Charles W. Calomiris argue in the September Financial Services Outlook that a repeat of the Fannie and Freddie disaster could be prevented by eliminating the government-sponsored enterprise model. “

The National Association of Manufacturers has sent a “Key Vote” letter to the Senate, urging support of  Dodd Substitute to H.R. 1424 as bringing stability and restored confidence to the U.S. financial system.  Key votes are used to calculate a member of Congress’ overall support for the manufacturing economy.

The recent addition of tax provisions is a generally good thing, the NAM believes.  From the letter, signed by Executive Vice President Jay Timmons:

NAM members believe that pro-competitiveness tax provisions in the Dodd Substitute will help shore up business confidence and promote growth and job creation.  In particular, the NAM supports provisions in the Substitute that include:

• A seamless extension of a strengthened R&D credit; 
• An extension of deferral of U.S. tax on active business global financing income;
• An extension of the look-through rules for payments between related foreign corporations; and
• Extensions of incentives promoting energy efficiency and the development of renewable and alternative energy sources.

At the same time, manufacturers are disappointed that revenue-raising provisions singling out the oil and gas industry for discriminatory tax treatment were included in the Substitute.  We believe the unintended consequences of these provisions could leave American consumers and manufacturers more reliant on foreign energy sources and result in higher energy prices.
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Nevertheless, Congress must take action quickly to restore Americans’ confidence in our financial system and send a positive signal to the world’s financial markets, and we urge you to support the Dodd Substitute.

The Senate convenes at 10 a.m. At National Review Online, a report from Senate staff:

The structure is this:

The Senate will call up H.R. 1424, the text of which will be substituted with the economic rescue plan (a Dodd amendment which must have the consent of both the Majority and Minority Leaders). The only other amendment in order will be a Sanders amendment that will be handled by a voice vote.

The bill will be subject to a 60-vote threshold for passage.

Another note from an aide: “it will be the economic rescue plan, plus the FDIC improvement, plus the tax relief extension bill that we passed earlier this month ($100 million in net tax relief that’s being stalled in the House).”

The Washington Post reports much the same.