CQ TODAY MIDDAY UPDATE
Sept. 29, 2008 – 2:41 p.m.
House Rejects Bailout Plan, Leaving Next Steps Uncertain
Despite intensive lobbying by congressional leaders and the White House, the House rejected an unprecedented $700 billion bailout plan for the financial system.
The 205-228 vote torpedoed a bipartisan compromise and sent the U.S. stock market down sharply. But the immediate falloff was not as severe as some had feared; the Dow Jones industrial average was off roughly 500 points about 15 minutes after the vote.
The startling rejection of the financial rescue proposal was a stunning defeat for the White House and congressional leaders from both parties. It was assured when House Republicans dug in their heels, refusing to support the plan.
House Democratic leaders had long insisted that a majority of both parties would be required to pass the bill, and House Republican leaders proved unable to deliver of their caucus’ majority. Instead GOP members voted against it by a 2-to-1 ratio.
“I believe what’s in the best interest of our country, as I stand here today, is to vote for this bill,” House Minority Leader John Boehner said just minutes before the vote.
Asked what would happen next, Boehner said simply, “I don’t know.”
Mike Simpson , an Idaho Republican, placed the blame on Speaker Nancy Pelosi , D-Calif., for inciting partisan sentiment with a floor speech blaming Republicans and the administration for the flaws in regulation and failures of oversight that she said drove the financial system to the brink of collapse.
“I know members who said ‘If I wasn’t a no before, I am now,’” Simpson said.
Democrats retorted angrily that they had delivered a clear majority of their caucus’s votes.
Advocates insisted passage of the legislation was essential to avert a broad economic collapse. Opponents questioned whether the plan would work, and whether it was even necessary.
House Financial Services Chairman Barney Frank , D-Mass., who helped write the bill, said there was a crisis of confidence in financial markets worldwide, and Congress has no choice but to act.
Asked after the vote what the next step would be, Frank said, “I think we have to see . . . what the economic reaction is.”
Is he worried about the markets? “Yeah.” he said.”
House Rejects Bailout Plan, Leaving Next Steps Uncertain
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Comments
Rejecting this bill is only gonna set our economy back 10 years. If they would have passed it, it would have taken a year or two. It irritates me that everyone wants to blame Bush for all of our problems, 9/11 was a major hit on our country and caused a slump in our economy, I would like to know how anyone else would have handled these last eight years in The White House. Where was our Congres when all of this was going on???? --Chris Howell
Doesn't anybody remember that in 1999 Pres. Clinton leaned on Fannie May and Freddie Mac to lower their standards to allow more lower income folks to get home loans? He was warned at the time that all would be OK until an economic downturn, which could cause severe problems. The downturn DID begin in March of 2000. This started pushing interest rates down, which gave incentive to potential homebuyers and shoddy mortgage brokers to go absolutely nuts with creative financing. These are the people hurting now. In EVERY year of his presidency, Bush warned Congress that something needed to be done about GSEs, specifically Fannie Mae and Freddie Mac. But neither the Republican-majority Congress of his early years nor the present Democrat-majority Congress would act, or even bother to closely examine the problem. Thank you to Bill Clinton and Congress for your wonderful inaction. Now we citizens can pay some more.
Jim, it wasn't Clinton's problem; he simply made a suggestion (toward the end of his term) with the intentions that it would be carried out correctly. It isn't directly Bush's problem either. If anything, this is our problem as Americans going out and buying shit we can't afford. When you give lower income individuals/families an opportunity to have something they might not need, you're also allowing the chance for others to pray which is what happened with this (just as it did with Reagan's credit card 80s). Regulation is really the key. It's too late to fix this problem now, but if someone had stepped in with legislation (during the last eight years) to prevent predatory/irresponsible lending, we would not be in this mess now. We're in this together and trying to place blame isn't helping anyone.
Pelosi doesn't help with a lack of political respect for the votes she wants. The Democrats are adopting the Obama approach to winning: bully, force and treat your voters with disrespect until they tell you to do it yourself.
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