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Amy Klobuchar: Bailout vote 'was a difficult decision'

A conversation with Minnesota's junior senator.

Last update: November 30, 2008 - 8:00 AM

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U.S. SEN. AMY KLOBUCHAR OFFERED A GRIM ASSESSMENT of the nation's economy but praise for President-elect Barack Obama's plans for a stimulus when she called on the Star Tribune Editorial Board on Nov. 25. Here are excerpts of the conversation:

Where do you see the economy going in the next few months?

This is as bad as we could imagine it could have been. [That's why] President-elect Obama has responded so quickly, has put together a good team, a centrist economic team.

What do you think of the proposals you've heard from the president-elect?

He's come up with what I thought should be the solution, back when we put together the last economic stimulus plan. I thought it should be more infrastructure, something that would last long after those rebate checks were cashed.

Infrastructure funding will include not just bridges, roads and rail -- we hope, some light rail -- but also schools and other things. It's a smart idea, to put people to work and will last long after we come out of this recession.

The second thing, which is great for Minnesota, is the emphasis on energy, and energy jobs. We are ahead there, because of the [state's] aggressive renewable energy portfolio standard, of 25 percent by 2025. The fact that he is willing to talk about this sector of the economy as the major engine [of recovery] is good for us.

How are the Minnesotans you meet reacting to those ideas?

People are very focused on the energy issue, and they also back infrastructure improvements. In Redwood Falls, they showed me railroad ties that are broken. In Winona County, they've let some roads go to dirt because they can't afford to keep them paved anymore. Those kind of things make the infrastructure needs real to people.

Has the bailout enacted in October been effective?

We went into that knowing that we had to do something to stem the financial crisis. It was a difficult decision at the time. I had some reservations.

I think we had 1,000 callers a day against it, 20 for it, so I didn't really think there would be a parade when I came home. But after I voted for it, you didn't get people calling and screaming at us. They knew that something had to happen.

I was always concerned about buying toxic assets [from financial institutions]. The taxpayers wouldn't have any upside in it, and they were so hard to value. The fact that [Treasury Secretary Henry] Paulson shifted gears, to an expanded plan that allowed us to buy some ownership interest in the banks, has been a good thing.

Can Washington get banks to use the money as intended, and start lending?

That's working to varying degrees, and needs to be improved. We have some hammer over these institutions. No. 1, we put this on an installment plan. If Congress isn't satisfied that they are doing what they are supposed to do, no one has to give out the rest of that money.

The second one is, with this new Congress, we could ... push them through new legislation to make sure they are making credit easier and helping people stay in their homes.

The bigger problem that has to be confronted is how we got there. So many people were living on credit, buying things they couldn't quite afford. Individuals are going to have to confront this, as well as businesses. Many of them made humongous mistakes, and tricked people into buying things they shouldn't buy. And government obviously didn't regulate it. There will be, in the first six months [of the new Congress], some work on these things.

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