Rep. Michael Arcuri, D-Utica, voted yes and Rep. Kirsten Gillibrand, D-Hudson, voted no to the $700 billion emergency bailout of the nation's financial system that was defeated in the House on Monday.
Gillibrand, whose district includes Delaware County, was one of 95 Democrats to vote against the bill.
The 228-205 vote to reject the bill showed that many representatives ignored urgent warnings from President Bush and congressional leaders of both parties that the economy could nose dive without it.
Meanwhile, in New York state Monday, the comptroller warned about a potential loss of $3.5 billion in tax revenues in the next 18 months because of Wall Street turmoil. Gov. David Paterson said he would meet with legislators Friday and issue a new financial plan next month.
"The situation remains fluid, but it is clear that the implications for the national, state and local economies will be substantial, a report from state Comptroller Thomas DiNapoli said Monday. "Consumers, already under pressure from higher energy and food prices, will now have to weather the effects of this financial institution crisis."
Under the rejected proposal, the stabilization would have allowed the Treasury Department to immediately purchase $250 billion in distressed mortgage-backed securities and other troubled assets from financial institutions, and would later allow the president to authorize use of an additional $100 billion.
Gillibrand says oversight insufficient'
While Gillibrand voted against the bailout, she also voted against adjournment, being in favor of keeping Congress at work to find an acceptable and effective, bipartisan solution. The House is adjourned until Thursday. After the vote on the proposed bailout, she issued a statement saying that the bill wasn't the ``right approach.
"The bill has insufficient oversight and protections and does not address the root causes of the crisis or the poor economy,'' she said. ``Moreover, I do not believe upstate New York taxpayers should pay for the excesses of Wall Street.
Gillibrand said firms need help to recapitalize without solely using taxpayer money. The federal government should work with firms to write down the values to restore confidence in the system and allow investors to begin buying and selling again, she said.
Firms also should be required to raise their capital standards, Gillibrand said, and if the federal government needs to intervene, then it should receive a fair equity stake in the company to protect the taxpayer.
``To calm fears, we should raise the FDIC insured limits,'' Gillibrand said. ``Furthermore, we need to put in place regulatory measures that will prevent this type of economic meltdown in the future, so that the middle class' savings will not be threatened again because of Wall Street mismanagement and greed.''
Arcuri: Doing nothing
is not the answer
Arcuri, joining a majority of Democrats and about one-third of Republicans, voted for the measure ``to stabilize the current financial crisis and protect the interests of American taxpayers.
``The package includes the necessary regulations to ensure better oversight going forward, repayment to taxpayers, and no golden parachutes' for the executives who have failed us," Arcuri said.
The crisis extends beyond Wall Street, he said, because, without action, credit for small business owners, banks and average Americans would dry up, businesses would be forced to close and jobs would be lost.
Arcuri said he was ``gravely disappointed that we even had to consider this economic stabilization plan _ and even more distressed that my colleagues failed to pass this critical legislation _ but the cost of doing nothing is too great for the American people, our nation's financial industry and New York to bear."
DiNapoli estimated Monday that turmoil on Wall Street could cost New York up to $3.5 billion in tax revenues over the next year and a half and as many as 40,000 financial sector jobs.
"The preliminary September numbers show the fallout from the Wall Street crisis is starting to hit the state hard," DiNapoli said. "We've been in trouble for a while and a day like today tells us our troubles are continuing."
Predicting tax revenues is difficult, DiNapoli said, and Monday's House vote will increase volatility in the markets and make such predictions harder.
Earlier projections put industry job losses at 25,000, but 40,000 or more lost could result, most in New York City, DiNapoli said. An estimated decline in Wall Street bonuses to $16 billion would rival the 50 percent drop after 9/11.
Preliminary state revenues for September indicate that personal income tax collections were relatively flat, while sales, business and other taxes fell about $154 million compared to September 2007, according to the Comptroller's Office. Business tax revenues have been below estimates all year.
DiNapoli's report said action by Paterson and lawmakers to cut spending had helped control a crisis with the state's $120 billion budget, but "the state has to watch its spending "" every dime counts in a crisis."
While non-farm employment in New York totaled 8.8 million jobs, higher than a year earlier, the unemployment rate rose to 5.6 percent in August. "Job losses are expected to mount as the year progresses," the report said.
Paterson said he'll be issuing a new financial plan next month reflecting the effect of the turmoil in the financial services sector, and DiNapoli has agreed to join him and legislative leaders Friday to discuss New York's situation.
Senate Majority Leader Dean Skelos said he and Assembly Speaker Sheldon Silver will meet Friday with Paterson to discuss the budget and other fiscal matters. Skelos, a Long Island Republican, said the state's revenues are closely tied to what happens on Wall Street and it's "critically important" that Congress approve a plan to stabilize the financial industry.
Silver called for a series of public hearings to gauge the impact on working families, businesses and communities statewide, regulatory oversight, and the status of projects like rebuilding at the World Trade Center sites in light of projected budget deficits.
"As Congress struggles to address this national crisis, New York needs to assess a situation that is rapidly changing," Silver said. "This series of hearings will give lawmakers a clearer sense of where we are fiscally and what actions can be taken to help families and protect our state's economy."
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