McHugh sought change to bailout bill

WASHINGTON — Rep. John M. McHugh again voted in favor of a $700 billion financial rescue plan Friday but said it could have been improved — and cast a procedural vote against the measure to make that point.

"The credit markets are starting to dry up significantly," Mr. McHugh, R-Pierrepont Manor, said in an interview after the measure passed the House. The final vote was 263-171, reflecting many lawmakers' switched votes four days after a similar measure failed.

Lawmakers added tax cuts, extensions of tax credits and other items to attract more votes. But the backlash from Monday's vote and a discouraging jobs report from the U.S. Labor Department probably helped the measure, Mr. McHugh said.

The measure is the same bill that passed the Senate Wednesday, and President Bush signed it later Friday.

Mr. McHugh's only major objection was with certain tax credit extensions that negotiators added to sweeten the deal for wavering lawmakers. Some of those had attracted derision as special interest carve-outs. With that in mind, he said, he voted against the rules for floor debate, believing the bill should have been open to an amendment to remove some of those items.

Negotiators also added an increase in the amount of deposits that are federally insured in banks, as well as a provision to help homeowners renegotiate terms of high-interest mortgages.

The congressman voted in favor of the bailout on Monday, leaving little doubt that he would support the revised version.

In the interview, however, he sought to tamp down any expectations that the rescue plan will save the economy. The country likely is headed toward a recession in any event, he said.

"I don't think this is going to solve all of the problems by any means," Mr. McHugh said, adding that the bill will "buy us some time" for the credit markets to recover.

The measure might help to limit the severity of the downturn, he said.

Mr. McHugh has joined other supporters in describing the bill as an economic stabilization measure rather than a bailout. And he stressed Friday that the government is not spending $700 billion in taxes, but buying shares in loans that are mostly not in default — and might actually make the government money in three to five years.

In supporting the bailout early on, Mr. McHugh acknowledged he faced a headwind of public opposition. But Monday's sell-off on Wall Street following the rescue plan's failure was jarring to lawmakers, as ordinary Americans saw the values of their retirement accounts and other investments tumble and their access to loans tighten considerably.

Then came the jobless report, which showed the most claims for unemployment benefits since 2001, worse than economists predicted.

"I think that really affected some folks," Mr. McHugh said.