Sen. Kyl defends bailout measure

With the Dow Jones industrial average losing 1,700 points since President Bush signed the $700 billion Wall Street bailout a week ago, the public is likely no happier now about the measure that they overwhelmingly opposed.

Some supporters of the legislation think Washington's leaders and the national media have failed to explain how the deal, which they call a rescue, not a bailout, will work.

Among them is Arizona Sen. Jon Kyl, a Republican who isn't up for re-election this year. He said some, especially in conservative circles, have latched onto aspects of the legislation that are misleading or even wrong.

"I hate to see folks come to a conclusion that's based on false information," he told The Republic.

One part of the measure often overlooked, Kyl said, is the possibility that the government could recoup some part of the $700 billion. Kyl said critical details of the plan are still evolving and the markets are still churning, so predicting any timetable isn't realistic. But when housing markets stabilize, the government could be sitting on assets it could use to pay down debts or return to taxpayers.

Also, many howled when they were told the final legislation included earmarks - those federal projects often seen as wasteful pork-barrel spending.

Sen. John McCain, who has made opposition to earmarks a centerpiece of his presidential campaign, was not thrilled about the process, either. "It's insanity, and it's obscenity because it's a waste of taxpayers' dollars, and it goes on," McCain said on MSNBC after voting for the bailout bill, along with 73 other senators including Sen. Barack Obama.

But Kyl said earmarks were not, strictly speaking, part of the bailout bill. Instead, that bill was tacked onto existing, unrelated legislation that had already passed the House with the other spending measures on it. The Senate did that because procedural rules require legislation to begin in the House. The Senate can make modifications that must be reconciled between both chambers.

"It wasn't put in there to buy votes," Kyl said, adding that the only change from the original House bill that failed was raising bank account insurance limits. Kyl voted for the bill.

Rep. Trent Franks, R-Glendale, voted against the bailout measure but largely agrees with Kyl.

"This was not an easy vote for anyone," he said. "In spite of my no vote, I honor those who voted yes for the right reasons."

And not all the spending is wasteful, Kyl said.

One item held up for ridicule involved a 10-year, $192 million tax rebate to rum-makers in U.S. territories in the Caribbean.

Kyl said the U.S. has rebated these taxes for years to treat rum from American territories differently than foreign imports.