With the American economy on the brink of collapse, the U.S. House of Representatives approved the second version of an unprecedented $700 billion government bailout of the struggling financial industry on October 3, 2008, which President George W. Bush signed into law.  The U.S. Senate overwhelmingly approved their version of the bill earlier this week after the House rejected the first version.  However, the two Senators from Alabama went against the political grain and vehemently voiced their disapproval of the bailout.

Steadfast in his opposition to this $700 Billion economic bailout, Sen. Richard Shelby (R-AL), the highest-ranking Republican on the U.S. Senate Banking Committee, followed through on his pledge to oppose this massive tax-payer funded bailout bill.  Shelby defended his actions in a speech prior to this historic vote: "The choice we faced was between pursuing an informed response or panic and I think we chose panic."  In recent weeks Senator Shelby has been making his rounds on the national political talk show circuit passionately discussing his opposition to this bill, making him one of the highest-profile critics of this bi-partisan rescue plan.  Shelby refused to even participate in negotiations related to this bill.

U.S. Senator Richard Shelby (R-AL)

On October 1, 2008, Senator Shelby delivered a speech on the Senate floor explaining his opposition to the Bailout.  He stated:

"We did not get into this situation in a matter of days, and we are not going to fix it with a piece of legislation quickly cobbled together in back rooms of the United States Capitol.... I now have serious concerns about the bailout package we are about to pass.  My foremost concern relates to the manner in which we are attempting to address the problem....Mr. President, unfortunately we chose panic and are now about to spend $700 billion dollars on something we have not examined closely.  Yes, in the end, we will have 'done something.' At the same time, however, we will have done nothing to determine whether it will accomplish anything at all."

Shelby did admit that this bailout package does have some positive points: "The bill does do some good things, however.  It permits the Federal Reserve to pay interest on reserves, which will improve its ability to conduct monetary policy and serve as a lender of last resort."

U.S. Senator Jeff Sessions (R-AL)

Alabama's other Senator, Jeff Sessions (R-AL), also voted against the first edition of the bailout bill, although Sessions has been much less vocal than Senator Shelby in his opposition.  On the Senate floor last week, Sessions questioned the unprecedented spending powers this bill gave to U.S Treasurer Secretary, Henry Paulson.  I called Senator Sessions office and they informed me of his written statement:

“Though well-intentioned, the Administration’s plan represents unprecedented governmental intervention in the economy. Its enactment will be a signal to the world that America has turned its back on the free market. The burden has been on the Secretary of the Treasury to explain with specificity what happened to our financial markets and how his extraordinary proposal will help. As a steward of taxpayer money, I do not believe that burden has been met. From the beginning, the Secretary has requested maximum flexibility and discretion to spend up to $700 billion of taxpayer money to relieve Wall Street banks of the consequences of their poor decisions. There is little in the plan to help everyday Americans trying to make their monthly mortgage payments. The proposal has always focused on Wall Street." (www.sessions.senate.gov)

Alabama has strong ties to many banks.  Regions Bank is based in Birmingham, Alabama.  Wachovia recently bought out Alabama-based Southtrust Bank.  In recent months, Wachovia has quickly caused many former Southtrust executives and employees to lose money through lower stock share prices.  This financial loss has caused many Alabama citizens to publicly express their disappointment with recent mega-mergers in the banking industry, especially Wachovia's takeover of the respected and prosperous Southtrust.

Alex Masterson, Chairman of the College Republicans at Birmingham-Southern College, believes Senators Sessions and Shelby did the right thing by voting against the bailout:

Senator Sessions and Senator Shelby did what they thought would best serve the people of Alabama when they voted against the first edition of the $700 billion bailout. The basic premise of the original bill proposed giving Secretary of the Treasury Henry Paulson $700 billion to spend as he saw fit. The Alabama Senators correctly realized that this proposal was a dangerous step towards allowing one person to decide how and where the government would intervene in the economy. Hopefully, the revised edition of the proposal will be improved and garner the necessary support to pass both the House and the Senate. Our economy is hanging in the balance during these difficult times, but as an Alabama citizen I completely trust my senators to make a wise decision.