(CNSNews.com) - House Financial Services Chairman Barney Frank (D-N.Y.) blamed House conservatives for defeating a $700-billion bailout that enjoyed the support of the Bush White House and bipartisan leaders of Congress.
“There is a wing of the Republican Party that believes very deeply in the free market ideology who said explicitly, ‘Yes, we understand there will be economic pain but we think it's worth preserving freedom,’ and the way they see it is that freedom will be somehow impinged by this government intervention,” said Frank at a press conference at the Capitol immediately following bill’s 205-228 defeat. “I understand their view but I don’t agree.”
Congressional sources told CNSNews.com that conservative House members including Reps. Mike Pence (R-Ind.), Ron Paul (R-Texas), and Jeb Hensarling (R-Texas), chairmen of the conservative Republican Study Committee, worked over the weekend to convince Republican colleagues to buck the will of their party leadership and bring the bailout bill down.
The bailout deal was negotiated by the Bush administration and congressional leaders of both parties over the weekend. It would have directed the U.S. Treasury to prop up the U.S. economy by purchasing up to $700-billion in teetering mortgages and mortgage-backed securities.
Among other things, it authorized the secretary of the Treasury to reduce the principle owed and the interest rates to be paid by people who bought houses they could not afford, allowing them to keep the houses at taxpayers' expense.
House conservatives argued that the bill would allow profits from risky mortgages to remain private while socializing the risk, spreading it out among American taxpayers who pay their bills, including their mortgages, on time. They feared that it would cause a permanent expansion of government regulation and control of the economy.
Prior to the vote on Monday afternoon, House Minority Leader John Boehner(R-Ohio), and House Minority Whip Roy Blunt(R-Mo), both of whom played critical rolls in negotiating the final bill, called on all Republican House members to support it.
But Pence told CNSNews.com that the bill did not have the support of the American people.
“The American people rejected this bailout and today the American Congress did likewise,” Pence told CNSNews.com immediately after the vote. “Now we have to come up with a good bill that reflects the values of the American people.”
Pence said such a bill would contain a "commitment to free and limited government."
“It will be important for Congress to come together and now devise an alternative that actually reflects the American people’s commitment to free government and limited government,” said Pence.
“The American people didn’t want it,” Paul also told CNSNews.com. “It was probably the thousands of emails congressmen were receiving that caused the bill’s defeat.”
Frank told CNSNews.com, however, that as a consequence of the bill’s failure, he is now “worried about the markets” and said he believes many conservatives have a mistaken faith in the free market.
“A great majority of Republicans were skeptical that something needed to be done,” Frank told CNSNews.com. “Some said there was no great crisis. If that in fact turns out to be the case, then I will cheerfully admit my error and take the rest of the year off. But I am not confident that will happen.”
Frank also said that in such a situation, he would happily admit to being a “chicken little.”