US: Conservative congressmen urge Bush to cut off aid to Wall Street

Frustrated by the US government’s rescue of AIG, Fannie Mae and Freddie Mac, a group of 100 conservative congressmen today urged the Bush administration to stop keeping Wall Street afloat.

In a letter to the treasury secretary and Federal Reserve chairman, members of the conservative Republican Study Committee (RSC) lamented the abandonment of free-market principles.

Rescuing failing financial firms has “set a dangerous and unmistakable precedent for the federal government both to be looked to and relied upon to save private sector companies from the consequences of their poor economic decisions,” the RSC members wrote.

Though the RSC has carried significant influence with Republican leaders in recent years, this week’s economic implosion has stoked longstanding tension between conservatives and the Bush administration into a full-blown ideological rift.

The government takeover of private businesses under a Republican president’s watch has left conservatives reeling. Bill O’Reilly, the Fox News Channel pundit and favourite of the right, condemned Bush’s “poor leadership” on his radio show yesterday, calling the market collapse “the end of President Bush’s legacy”.

The RSC members, all serving in the House of Representatives, noted with alarm that the government action this week “has the appearance of a socialist and not a free market approach to managing our economy”.

Adding to the appearance of an internal feud, Republican House leader John Boehner told reporters today he was cancelling a party meeting on the credit crisis. His reason: the Bush administration “refused” to send anyone to brief the congressmen, Boehner said.

The tension could spill over and undermine conservatives’ ties to John McCain, who came out in support of the government’s AIG bailout one day after criticising the notion. McCain recently agreed to support $25bn in loan guarantees for the three major US auto companies, a proposal that the RSC blasted in its letter.

The Club for Growth, a conservative political committee that has helped marshal free-market forces on Capitol Hill, took aim at McCain today for his support of the automaker loans.

“The auto industry bailout continues a growing and dangerous trend of socializing the risks inherent in a free economy, setting a precedent for future industries down the road,” the Club said in a release to reporters.

Elana Schor in Washington
Thursday September 18 2008 20:51 BST

Source: The Guardian

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