$700 billion bailout plan fails in U.S. House

$700 billion bailout plan fails in U.S. House

The $700 billion bailout package failed to pass in a vote today in the U.S. House. The vote was 227 against it and 206 for it.

The bill would have allowed the federal government to take on debt from troubled financial institutions, many of which have incurred huge losses because of the mortgage crisis and the overall weaknesses in the economy.

The Dow Jones Industrials index plunged more than 500 points as the vote was going on and immediately after the vote was completed.

For more information on this story, please check www.thespectrum.com later today and tomorrow's print edition of The Spectrum & Daily News.

Dow is down 777+ points today - the largest one-day % drop in 21 years.

Well, if they did not load it with their usual added garbage, it would have passed. Even many Dems saw that problem and voted no! If they would look out for us, and not their own pockets and buddies, things would be different!


I still say -- If they are in congress, I will vote for their opponent! We really need term limits to stop the corruption that befalls most of these geniuses, after they learn the wrong ropes!

No Golden Parachutes for the Executives that created this mess

gs78 wrote:

No Golden Parachutes for the Executives that created this mess

Thanks to this not passing, my step-dad lost his job today because they closed the site down he was working out. But the good thing that came from it is that Obama was in Reno and he got to go see him speak and is now voting for him, and I got a kickass Obama shirt.

kharmon wrote:

Thanks to this not passing, my step-dad lost his job today because they closed the site down he was working out. But the good thing that came from it is that Obama was in Reno and he got to go see him speak and is now voting for him, and I got a kickass Obama shirt.

Well, the Dems had the possible votes to pass that messed up legislation, but they decided to vote against it! Don't blame the GOP for the failure to not pass it! They knew it was full of extra junk!

Hopefully they will take the time now and wright legislation that is sane and does not have "Golden Parachutes" for crooked company presidents that deliberately make a company fail!

PS. Congress knew about the problems 2 years ago, and decided to ignore them! People should have never been lied to about the possibility of a mortgage, with no money down, no proof of employment, and encouragement to buy houses bigger than they could afford! If you can't afford the house, RENT! That is how it has safely been done for hundreds of years!

While renting, then save for your down payment! I was in Real Estate for many years, and saw this coming, when congress encouraged the person's income to house cost ratio to go from a safe 25% of take home pay, to 33% and finally 50%! No way a person can keep up with payments that eat up that much of their income! This activity also caused home prices to skyrocket! Now they are coming down to where they should have been.

Sorry to hear about your dad losing his job, but chances are he will get it back, or get a better one, once congress gets their heads out of their butts, and become representatives for the people, and not themselves, then we will have real change, but Obama and McCain had better be different, or we will keep going down the road to the end times....

Totally random thought....

why is the Republican party known as the GOP (Grand Old Party) when the Democratic party is older?

GoGetEmTigers wrote:

kharmon wrote:

Thanks to this not passing, my step-dad lost his job today because they closed the site down he was working out. But the good thing that came from it is that Obama was in Reno and he got to go see him speak and is now voting for him, and I got a kickass Obama shirt.

Well, the Dems had the possible votes to pass that messed up legislation, but they decided to vote against it! Don't blame the GOP for the failure to not pass it! They knew it was full of extra junk!

Hopefully they will take the time now and wright legislation that is sane and does not have "Golden Parachutes" for crooked company presidents that deliberately make a company fail!

PS. Congress knew about the problems 2 years ago, and decided to ignore them! People should have never been lied to about the possibility of a mortgage, with no money down, no proof of employment, and encouragement to buy houses bigger than they could afford! If you can't afford the house, RENT! That is how it has safely been done for hundreds of years!

While renting, then save for your down payment! I was in Real Estate for many years, and saw this coming, when congress encouraged the person's income to house cost ratio to go from a safe 25% of take home pay, to 33% and finally 50%! No way a person can keep up with payments that eat up that much of their income! This activity also caused home prices to skyrocket! Now they are coming down to where they should have been.

Sorry to hear about your dad losing his job, but chances are he will get it back, or get a better one, once congress gets their heads out of their butts, and become representatives for the people, and not themselves, then we will have real change, but Obama and McCain had better be different, or we will keep going down the road to the end times....

I don't blame either party for it not passing. It was the way the bill was written that made it not pass. Hopefully it passes tonight. Both Obama and McCain have decided to put the economy first and the revelry between them second to find a solution to this. They have stopped bad mouthing the other person in their speeches after it failed. I'm not anti GOP, I just don't care for the candidates for president and vice president.

Senate Approves Bailout

House to Take Up Bill With Added Tax Breaks, Higher FDIC Limits

The Senate last night easily approved a massive plan to shore up the U.S. financial system, but the measure faces a tougher test tomorrow in the House, where leaders will try to reverse the stunning defeat the legislation suffered earlier this week.

As the Bush administration issued fresh warnings that Congress's failure to act would have dire consequences for the economy, the Senate revived the package the House defeated Monday and voted to approve it, 74 to 25.

The proposal -- which calls for spending up to $700 billion to buy bad assets from faltering financial institutions -- was heavily revised to attract wider support. The bill passed last night would extend an array of tax breaks worth $108 billion to businesses and families next year. It would also temporarily increase the limit on federal insurance for bank deposits to $250,000 from $100,000.

Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, acknowledged last night that it was tempting to oppose a bailout and "stick a finger in the eye of the bankers and the tycoons whose greed brought us to this crisis."

"But after the rush of righteousness fades, what then?" said Dodd, an architect of the package. "We can take a cut at Wall Street, but Wall Street won't feel the brunt of the pain."

Nine Democrats, 15 Republicans, and one independent opposed the plan. Sen. Edward M. Kennedy (D-Mass.), who is ailing, was not present for the vote.
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The provisions added to the original bill infuriated fiscally conservative Democrats in the House, who have argued for months that the tax breaks should not be extended at the expense of increasing the federal deficit. Yet some congressmen who opposed the bailout Monday were newly interested in it yesterday.

Rep. John Shadegg (R-Ariz.), an influential conservative, said the new bill was "materially better" than the one that failed in the House, sending the Dow Jones industrial average plummeting a record 778 points.

"Much as I would like to see much more dramatic changes, there comes a point in time where we've got to send the signal to the U.S. markets, U.S. consumers and world markets that we're dealing with this," Shadegg said. "I'm inclined to hold my nose and vote yes."

House Republicans said the new package could attract as many as 100 GOP votes -- enough to put it over the top if Democrats can garner as many votes as they did on Monday. House Majority Leader Steny H. Hoyer (D-Md.) said he and other fiscal conservatives are "angry" about the addition of the tax provisions but unlikely to abandon the package.

"Frankly, we really don't have much flexibility, and this is important to do," Hoyer said.

Across Washington yesterday, politicians and interest groups worked frantically to build support for the bailout, which seeks to prop up U.S. financial institutions and calm investors.

Treasury Secretary Henry M. Paulson Jr. also worked the phones, participating in conference calls with banking groups and business associations. Other organizations joined the campaign, including the AARP, whose members have inundated lawmakers with more than 110,000 e-mails in recent days.

"People's nest eggs are disappearing," AARP chief executive Bill Novelli said. "It's no secret that people are angry about bailing out Wall Street. But Wall Street is us. These are our stocks, our retirement funds and our futures."

House leaders, meanwhile, leaned on rank-and-file members to fall in line behind the new plan, plucking out provisions to sell to specific constituencies. Party leaders hoped to lure African American lawmakers, who voted "no" on Monday in surprisingly large numbers, with a new property tax deduction of up to $1,000 for homeowners who do not currently itemize deductions on their federal income taxes. Advocates say 30 million people would be eligible for the benefit.

The homeowners' deduction is part of a massive tax package that has been batted back and forth between the House and Senate for months and was tacked onto the bailout legislation. That package includes new tax breaks for renewable energy and a much longer list of expired tax cuts that would be extended for two years. The largest, which would be extended for one year, would restrain the growth of the alternative minimum tax, a parallel tax structure that would add thousands of dollars to the tax bills of more than 20 million families next year without congressional action.

The tax package also would extend federal deductions for sales taxes in states that do not levy an income tax, as well as for tuition and for teachers who spend their own money on classroom supplies. There are also tax breaks worth nearly $40 billion for businesses over the next 10 years, including incentives for conducting research and development domestically, for opening new restaurants and for doing business in the District.
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The measure also would require insurance companies to provide the same level of coverage for mental illnesses as for other heath problems, a long-sought priority for Democrats.

The cost of the package would be offset somewhat by new taxes on hedge-fund managers who avoid taxes by transferring income offshore, as well as by a new reporting requirement for stock brokers that would make it easier to tax capital gains on stock sales. Still, those provisions would come nowhere near covering the cost of the package, which the Joint Committee on Taxation yesterday estimated at $110 billion over the next decade.

The new bill was assembled behind closed doors on Tuesday. In an unusual bipartisan power play, Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) collaborated to produce a package that could easily pass the Senate and build momentum in the more reluctant House.

They also saw an opportunity to force through the Senate-drafted tax package, even though House leaders earlier had insisted it be accompanied by other tax increases to avoid adding to the deficit. Reid's main priority was securing the renewable energy tax credits, which would benefit his home state. The provisions reward investments in wind and solar energy and the purchase of plug-in electric cars.

Senior Democratic aides who were involved in the negotiations said Reid kept Hoyer informed but did not engage him because Hoyer led the House opposition to the Senate tax package. But Reid spoke with House Speaker Nancy Pelosi (D-Calif.) at least three times Tuesday, aides said.

Negotiators said Sen. Barack Obama (D-Ill.) played a minor but important role in courting Democratic holdouts, contacting individual lawmakers from the campaign trail. He also announced his support for an increase in the FDIC insurance limit; his opponent in the presidential race, Sen. John McCain (R-Ariz.) did so as well.

During Senate debate yesterday, Obama echoed President Franklin D. Roosevelt's first fireside chat to the nation during the Great Depression, calling on the American people to have "confidence and courage" through what is likely to be an extended period of economic turmoil.

"This is not just a Wall Street crisis. It's an American crisis," Obama said. "Passing this bill can't be the end of our efforts to support the economy; it must be the beginning."

McCain was elsewhere in the Capitol and did not speak during the debate. He later supported the measure.

Minutes before the vote started, senior aides predicted the "yeas" could be as few as 60, the minimum needed to pass. But when the moment arrived, senators sat at their desks, appearing grave and intent, and the "no" votes were surprisingly few. Only three senators who face tough re-election battles -- GOP Sens. Elizabeth Dole (N.C.) and Roger Wicker (Miss.), and Democratic Sen. Mary Landrieu (La.) -- were opposed.

Bush issued a statement last night applauding the Senate for passing the bill. The White House said the president planned to remain in Washington until after the House vote on Friday, then depart for a previously scheduled trip for the weekend.

Despite some grumbling, Democratic proponents of the bailout package said they did not expect many lawmakers who supported the bailout plan Monday to switch their votes tomorrow. "How do you say, if you voted yes already, now that it has tax cuts and FDIC insurance, that you're going to vote against it? That just doesn't make sense," noted one senior Democratic lawmaker, speaking on condition of anonymity so he could speak candidly.

Conservative Republicans remained among the most fervent opponents. But Rep. Jeb Hensarling (R-Tex.), chairman of the conservative Republican Study Committee, sent a letter alerting members that the new measure "contains far more tax relief than tax increases" and is not considered "a taxpayer pledge violation" by the anti-tax group Americans for Tax Reform.

Meanwhile, a handful of more moderate House Republicans yesterday signaled that they were at least studying the changes in the bill. Reps. Charles Boustany Jr. (R-La.), Pat Tiberi (R-Ohio) and Marsha Blackburn (R-Tenn.) all voted against the measure Monday, but their aides said yesterday that they were undecided on the latest version.

House lawmakers said that calls and letters to their offices yesterday remained overwhelmingly against the bailout but that there had been a shift since Monday's gut-wrenching drop in the stock market. Rep. Michele Bachmann (R-Minn.), who cheered on the House floor as the bill went down, said her office was hearing from slightly more people who support it.

"There's been more media attention," she said. "People are talking. People are getting more educated."

The damn thing is full of special interest riders, that have nothing to do with the problem.... politics as usual! And they wonder why their approval rating is so low!