Sep 26 2008
Alabama Senator Calls Plan 'Flawed From the Beginning'
By Christopher Lee
Everything seemed to be headed toward a deal -- and then Sen. Richard C. Shelby emerged from the White House with a bit of bad news.
"We hadn't got an agreement," said Shelby (Ala.), the ranking Republican on the Senate banking committee. "There's still a lot of different opinions. Mine is: It's flawed from the beginning."
Shelby has made no secret of his distaste for the plan all week. His strong opposition was a primary reason that Sen. Robert F. Bennett (Utah), a close friend and political ally of Senate Minority Leader Mitch McConnell (Ky.), was leading talks on the package for Senate Republicans.
But it is also what made Shelby's inclusion in White House talks, which were designed to reach agreement on a $700 billion recovery plan, something of a surprise. Inviting a lawmaker completely opposed to a plan to a negotiation usually is not a recipe for reaching a deal. Then again, those around the table could count on him to represent the contrary view, a familiar position for him.
Shelby was elected to the Senate as a Democrat in 1986 but switched parties after Republicans took control of Congress in 1994. He is known for moving slowly but deliberately, holding hearings and asking for issue studies before trying to pass legislation.
For years, he has been a proponent of stricter government regulation of Fannie Mae and Freddie Mac, the government-sponsored mortgage finance enterprises whose loose lending practices and shaky balance sheets contributed to the current economic crisis.
"The Treasury's plan has little for those outside of the financial industry," Shelby said at a congressional hearing this week. "It is aimed at rescuing the same financial institutions that created this crisis with their sloppy underwriting and reckless disregard for the risks they were creating, taking or passing on to others. Wall Street bet that the government would rescue them if they got into trouble. It appears that bet may be the one that pays off."
Shelby has a contrarian's history of getting into scrapes, sometimes with members of his own party.
In the early 1990s, when he was still a Democrat, he was a vocal critic of President Bill Clinton's budget. In the early part of this decade, while a vice chairman of the Senate Select Committee on Intelligence, Shelby blasted the CIA for failures leading up to the Sept. 11, 2001, attacks, and he called on the CIA's then-director, George J. Tenet, to resign.
"I think people at times like some independence," Shelby told the Associated Press as he sought reelection in 2004. "They like independent thought, not someone to be a rubber stamp for either party. I sit up here, and who am I accountable to? Only the people of Alabama."