Bailout Bill... Denied!

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WASHINGTON - The House on Monday defeated a $700 billion emergency rescue for the nation's financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nosedive into recession without it.

Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.

Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home. Despite pressure from supporters, not enough members were willing to take the political risk just five weeks before an election.

Ample no votes came from both the Democratic and Republican sides of the aisle. More than two-thirds of Republicans and 40 percent of Democrats opposed the bill.

The overriding question for congressional leaders was what to do next. Congress has been trying to adjourn so that its members can go out and campaign. And with only five weeks left until Election Day, there was no clear indication of whether the leadership would keep them in Washington. Leaders were huddling after the vote to figure out their next steps.

A White House spokesman said that President Bush was "very disappointed."

"There's no question that the country is facing a difficult crisis that needs to be addressed," Tony Fratto told reporters. He said the president will be meeting with members of his team later in the day "to determine next steps."

"Obviously we are very disappointed in this outcome," Fratto said. ". There's no question that the country is facing a difficult crisis that needs to be addressed. The president will be meeting with his team this afternoon to determine the next steps and will also be in touch with congressional leaders."

Monday's mind-numbing vote had been preceded by unusually aggressive White House lobbying, and spokesman Tony Fratto said that Bush had used a "call list" of people he wanted to persuade to vote yes as late as just a short time before the vote.

Lawmakers shouted news of the plummeting Dow Jones average as lawmakers crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for roughly 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.

They found only two.

Bush and his economic advisers, as well as congressional leaders in both parties had argued the plan was vital to insulating ordinary Americans from the effects of Wall Street's bad bets. The version that was up for vote Monday was the product of marathon closed-door negotiations on Capitol Hill over the weekend.

"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it — not me.' "

With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of world markets on Congress, Ryan added.

"We're in this moment, and if we fail to do the right thing, Heaven help us," he said.

The legislation the administration promoted would have allowed the government to buy bad mortgages and other rotten assets held by troubled banks and financial institutions. Getting those debts off their books should bolster those companies' balance sheets, making them more inclined to lend and easing one of the biggest choke points in the credit crisis. If the plan worked, the thinking went, it would help lift a major weight off the national economy that is already sputtering.

The fear in the financial markets send the Dow Jones industrials cascading down by over 700 points at one juncture. As the vote was shown on TV, stocks plunged and investors fled to the safety of the credit markets, worrying that the financial system would keep sinking under the weight of failed mortgage debt.

"As I said on the floor, this is a bipartisan responsibility and we think (Democrats) met our responsibility," said House Majority Leader Steny Hoyer, D-Md.

Asked whether majority Democrats would try to reverse the stunning defeat, Hoyer said, "We're certainly not going to abandon our responsibility. We'll continue to focus on this and see what actions we can take."

Several Republican aides said House Speaker Nancy Pelosi, D-Calif., had torpedoed any spirit of bipartisanship that surrounded the bill with her scathing speech near the close of the debate that blamed Bush's policies for the economic turmoil.

Without mentioning her by name, Rep. Adam Putnam, R-Fla., No. 3 Republican, said: "The partisan tone at the end of the debate today I think did impact the votes on our side."

Putnam said lawmakers were working "to garner the necessary votes to avoid a financial collapse."

But the defeat was already causing a brutal round of finger-pointing.

"We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House," House Minority Leader John Boehner said. Pelosi's words, the Ohio Republican said, "poisoned our conference, caused a number of members that we thought we could get, to go south."

Rep. Roy Blunt, R-Mo., the whip, estimated that Pelosi's speech changed the minds of a dozen Republicans who might otherwise have supported the plan.

Rep. Barney Frank, D-Mass., scoffed at the explanation.

"Well if that stopped people from voting, then shame on them," he said. "If people's feelings were hurt because of a speech and that led them to vote differently than what they thought the national interest (requires), then they really don't belong here. They're not tough enough."
Source: http://news.yahoo.com/s/ap/financial_meltdown;_ylt=AgkQ3G9c2rZlNvqLyJSjg_Ks0NUE
 

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So what happens now? Do they attempt another bailout with different terms?

I'm of the opinion that if they bailout these institutions, it just encourages this from happening again in the future - Afterall, they know that there will be no consequences for their actions since if the company fails, congress will bail it out.
 
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I wish MC would start posting a short plot of his thread rather than posting the wall-o-text without anything else.
 
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ugh... shares dropped a whopping 5% across the board mere minutes after the rumours of this >_> i'll be made redundant if this keeps up until feb
 
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It's all pointless... we're on a one way trip to a really nasty depression.

All a bailout is gonna do is postpone the inevitable. Thats my view of it at least.....
 
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ugh... shares dropped a whopping 5% across the board mere minutes after the rumours of this >_> i'll be made redundant if this keeps up until feb
you'll never be redundant to me sweetheart <3.


this depression will suck for some people, but compared to how it was last time this will be very little for peopl to worry about.
 
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I'm guessing he means the Great Depression.

And yeah, I don't think we'll be in THAT bad a position. My family was financially smart when real estate went up; I don't see my folks losing the house anytime soon. Sure, we'll be holding back on luxuries (I know I have) and feel murder at the gas pump, but it's not going to be to the point where our homes become rundown shacks and homeless roam the streets like legions of undead.
 
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feeling murder at the gas pump?

god gave you legs for a reason.
 

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There are some places you must go which are too far to practically walk. Saying that you have legs isn't a solution if your college or work is far away.
 
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I had mixed feelings on the bailout.

I agree that the bailout smells like Socialism. I agree that we, the taxpayers, should not rescue people who played with money they did not have. They made large bets on a bubble, and when it bursted, they went with it. Catching them and putting them down easy encourages it again. I am, however, deeply concerned about a collapse. I do have faith that there is no such thing as an economic vaccum in America. Someone will pick up the pieces and move forward, there will be new banks, and there will be new startups that become big money in a few years. It will be tough, but things will pull through with some good old elbow grease.

To be honest, the money and power centers needed to fall on their ass. Good for them. Now lets hope they don't take us with them.
 
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I say we annex Mexico/Canada and unleash the NWO.
 
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Some people think we're headed in a second Great Depression. Conditions are different this time around. I though the Great Depression was so bad because of the craze in credit usage/stock holding?
 

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