ALBANY, GA (WALB) - Georgia's two U.S. Senators launched a six city-fly-in tour Friday. They traveled from Albany to Tifton, Savannah, Augusta, Macon, and Columbus.
They say Congress couldn't turn a blind eye to the failing economy. Senators Saxby Chambliss and Johnny Isakson praised the House for passing the bill but criticized what they call unscrupulous Wall Street executives who put jobs and small businesses at risk.
Senator Saxby Chambliss admitted Friday he wasn't for the initial bailout plan, but the changes made between Monday and Wednesday changed his mind and his vote.
"We now know that we're going to pay from a governmental standpoint less than 100 cents on the dollar, they'll be a significant discount on the loans, the toxic loans, purchased by the government under this plan," said Chambliss, (R)-Georgia.
Economists have questioned whether the plan will work and suggest a stock purchase plan for troubled banks as a better solution. Senator Johnny Isakson who has more than 30 years of real estate business experience disagrees.
"For the last year and a half most financial institutions and bankers sold additional stock in their companies to raise capital as they did they diluted shareholder value which precipitated some of the decline in values. What we're trying to do is the free enterprise approach, which is for the government to act as a agent to establish a market so the market will return to buy mortgage backed securities that's the private sector way and that's the best way to solve it," said Senator Johnny Isakson, (R)-Georgia.
What makes the government so sure it'll succeed where banks have failed?
"The government can go in there, can analyze the mortgages behind the security and offer a price in fact what they'll do is they'll have a reverse auction where the security will be brought to the government. The government will determine what price it's going to pay. Once that mark is set and the backing of those loans has been evaluated in the security then other investors will come back," said Isakson.
Isakson says the worst foreclosure rate is 19 percent in Nevada, with the government buying securities at a discount they should make a margin on what they purchase and while the payback may not be immediate over time it may be a benefit.
"We don't expect that we'll get a 100 percent return, but over a period of time there is the potential for that to occur," said Chambliss.
Both say the plan ultimately allows businesses that need that line of credit to meet payroll or pay bills or people who need loans to have access to that line of credit and both say that will hopefully keep employers from cutting jobs.
Senator Saxby Chambliss also said an important part of the bill allows for the prosecution of any illegal activity discovered. This week, the Department of Justice issued subpoenas to Freddie Mac and Fannie Mae hoping to get to the bottom of what really caused the mortgage crisis.