Amid economic turmoil, the U.S. Senate voted Oct. 1, 2008, to approve a $700 billion rescue of Wall Street, a decision joined by Texas Sens. Kay Bailey Hutchison and John Cornyn.
It wasn’t long afterward that Hutchison drew the unflattering nickname of "Kay Bailout" from Gov. Rick Perry’s camp, which was wary of Hutchison challenging Perry for governor this year.
The two revisited the bailout vote in Thursday's GOP gubernatorial debate when Hutchison reminded Perry that he’d signed a letter sent members of Congress on the day of the pivotal Senate vote widely interpreted as urging lawmakers to proceed full speed ahead.
"You wrote a letter to Congress saying pass this bill, we need to shore up the financial markets," Hutchison said. "…Governor, you asked for it too. You were for it before you were against it."
Perry conceded that he co-wrote a letter with West Virginia Gov. Joe Manchin. But, he said, the governors "thought you were smart enough to understand what we were talking about, stop the spending and cut the taxes."
"Governor," Hutchison replied, "that’s not what the letter said."
"I wish we’d made it a little clearer for you," Perry said.
Maybe Perry could have made it clearer for everybody. We wondered if Perry initially urged lawmakers to pass the bailout proposal after all.
This much is certain: On the morning of Oct. 1, 2008, the Republican Governors Association and Democratic Governors Association publicized a letter signed by their respective chairmen — Perry and Manchin — described by the groups as urging passage of an economic recovery package.
The three-paragraph letter states: "We strongly urge Congress to leave partisanship at the door and pass an economic recovery package... If Congress does not act soon, the situation will grow appreciably worse."
The letter doesn’t explicitly endorse the plan then before the Senate. But no other plan was in play that day amid national fears of an economic collapse. And The Associated Press cast the governors' letter as part of a frantic national push for the $700 billion bailout of Wall Street sought by President Bush.
That was before Perry issued a contradictory-sounding second statement later in the day, partly headlined: "On Protecting Taxpayers."
"In a free market economy," Perry said, "government should not be in the business of using taxpayer dollars to bail out corporate America."
Asked to clarify at the time what Perry wanted the Senate to do, his spokeswoman, Allison Castle, demurred. "The senators have to make their own decisions," Castle said.
Hutchison spokesman Matt Mackowiak stepped into the breach, opining: "Texans can only conclude that Gov. Perry opposes the sales tax deduction, protecting them from the Alternative Minimum Tax, extending tax credits for refinery expansion and providing over $600 million in tax credits to help rebuild Texas communities damaged by Hurricane Ike, all of which are contained in this bill."
Asked several months ago about Perry's dual messages, Perry spokesman Mark Miner saw nothing confusing. Miner said Perry simply favored tax and spending cuts over bailouts.
"You call on Congress to take action, nine times out of 10, the action they take is wrong," Miner said.
After the debate, we took the candidates' advice and sought out Manchin (per Perry) and former President George W. Bush (per Hutchison) for their takes on this issue. Bush declined to comment while Manchin indicated he and Perry hadn't advocated any specific legislation.
In a comment delivered by a spokesman, Manchin said: "You had to look at the situation our country was facing then. What we were urging was for Congress to work together in a bipartisan effort, and to follow the lead of the governors... to move the states ahead. That effort continues today."
At the time of the Senate action in 2008, Manchin said he supported his state's two senators, who voted for the Wall Street package. But he too sounded a contradictory note: "I do not support a bailout. Nobody supports bailing somebody out on the backs of working people … for someone to profit on Wall Street."
All in all, it's easy to see Hutchison’s rationale for charging Perry with being for the legislation before he was against it. The Manchin-Perry letter did urge action on the day the Senate was poised to take up the bailout package.
But Perry is correct that the joint letter didn’t explicitly advocate the Senate plan. And his second Oct. 1, 2008, statement could be taken as a timely signal he didn’t want Congress to rescue Wall Street the way it did
Of course, Perry could have held his tongue entirely and spared himself the resulting questions and explanations.
In the end, we rate Hutchison’s claim Half True.