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Debt Ceiling Vote Is TARP Part 2

Tom Williams/Roll Call
Sen. John Boozman voted for the Troubled Asset Relief Program as a House Member in 2008 and said “the whole country is watching” how Congress votes on the debt ceiling issue.

While it’s unclear what will be in any final deal to raise the debt ceiling, the GOP base is clearly clamoring for sizable spending cuts. And Republicans know those are the same people who helped propel them in 2010 into the House majority and boosted their numbers in the Senate.

Bonjean said he believes it will take spending cuts in the trillions for Republicans to be “politically protective of their election promises.”

If Republicans vote for a package that doesn’t pass conservative muster, “I think they are going to have problems with the conservative base,” said former Rep. Chris Chocola (R-Ind.), who is now president of the Club for Growth.

The Club for Growth, and other groups, will score the debt ceiling vote to inform its decision on endorsements in 2012.

Chocola pointed to a last-resort plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.), which would virtually guarantee that the debt ceiling will be raised but would not guarantee that there will be spending cuts and budget reforms.

“We have spoken out against the plan,” Chocola said. “I think it reflects everything that is wrong with Washington.”

But the proposal appears to have gained traction because Senate Majority Leader Harry Reid (D-Nev.) is now working with McConnell on the plan to make it a more viable option in the Senate. One likely change would have Congress include $1.5 trillion in spending cuts in the proposal. Another would create a commission that would recommend additional cuts and reform entitlement programs.

In its current form, the McConnell plan sets up a process that would allow Republicans to vote against the debt ceiling increase and still allow the debt limit to be raised, which Chocola said is disingenuous.

“I think conservatives are smarter than that,” Chocola said. “I think they will see that the debt limit got raised, there were no meaningful reforms or cuts and Republicans let it happen.”

Chocola said if the debt deal ends up being unsatisfactory to the Republican base, there could be a backlash similar to what happened when Republicans backed TARP in 2008.

The House tried to pass TARP in September 2008, but Congressional leaders failed to supply the votes needed. The bill’s defeat spurred the Dow Jones industrial average to shed more than 777 points, the largest single-day drop in decades. After a few tweaks, the Senate approved the TARP bill in October, followed by the House. Thirty-three House Democrats and 25 House Republicans switched their votes to “yes” after initially voting “no.”

Of course, some Republicans faced tough re-elections or lost their seats in connection with their votes for TARP. Though financial experts said it was needed to avoid a collapse of the financial industry and the economy, the program was very unpopular with the electorate. The issue played a role in the loss of then-Sen. Bob Bennett (R-Utah) to a convention challenger.

Support for TARP was also campaign fodder in the gubernatorial bid of former Rep. Gresham Barrett (S.C.). He lost the Republican nomination to Gov. Nikki Haley.

Jessica Brady contributed to this report.

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