House defeats $700 Billion Bailout

[Gio Takahashi]

Source (http://www.breitbart.com/article.php?id=D93GHQRG1&show_article=1)



WASHINGTON (AP) - The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.

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

When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.

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.

The 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.


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I'll probably merge the two thread since the subject is similar, but this thread focuses on the idea of the bailout plan while the other thread discusses the stock market situation.

Thoughts?

[Killer_Man_]

Ryan Statement on the Emergency Economic Stabilization Act of 2008
Wisconsin’s 1st District Congressman Paul Ryan expressed deep disappointment today on Congress’ failure to address our current financial crisis. Ryan fought on behalf of the taxpayer this past week in securing considerable protections for the taxpayer, while strengthening economic security for the American worker. Despite the urgency of our financial crisis, H.R 3997, the Emergency Economic Stabilization Act of 2008, failed on the House floor by a vote of 205 - 228.

Following his vote in favor of H.R. 3997, Ryan issued the following statement:
“It is with deep disappointment and a heavy heart to have witnessed Congress’ failure to address the grave financial challenges we face as a nation. With an election looming, my colleagues in Congress thought first and foremost of their own jobs at the expense of the jobs of those they serve. I could not and did not accept last week’s proposal by the Bush Administration – an Administration that totally mishandled this situation. But instead of pointing fingers and standing idly by – as would have been the politically expedient thing to do – I worked to secure concrete protections for the taxpayer.

“Today’s vote was about stopping the Wall Street crisis from creating a banking crisis in our communities. The Bush Administration’s proposal was unacceptable, and the American people demanded an alternative solution be brought to the table. I joined my colleagues in putting forth an alternative economic rescue proposal and secured these taxpayer-protections in the final bipartisan agreement. I fought to make sure that once these troubled institutions start making profits, the taxpayers benefit first and foremost. I fought to make sure Wall Street executives don’t profit personally as a result of their irresponsible decisions. I wrote the provision that ensures that Wall Street shares in the cost of their own recovery.

“I supported this bill in order to stabilize our economy and to preserve American jobs. It is about Main Street – that Wall Street’s crisis doesn’t become Main Street’s crisis. It is about protecting working families’ access to credit – so students can secure college loans, farmers can buy feed, seniors can secure their retirement, and businesses can pay their employees.

“I am outraged that we find ourselves in this situation, and I have grave concerns for the state of our economy. In light of the political expediency of my colleagues and the horrendous failures of the Bush Administration, we will have to roll up our sleeves and go back to the drawing board to enact a meaningful solution to our financial crisis.”




Speaking of Paul Ryan of first district in WI. I got this e-mail about it. I don't know much about it but it sounds more like he was against the bill cause he's sick of big bussiness getting the breaks.

[deathofcheese]

The Subprime Mortgage Primer (http://www.businesspundit.com/sub-prime/)

IANAE (I am not an economist) so I don't know how true or how wrong the above is. However, if it's true whatsover, then this $700B bailout bill would've just continued the trend. Instead of moving the debt elsewhere, just hold onto it until it gets paid. As bad as it is for the big name banks and other financial institutions to go under, it'll be even worse when they go under again after being bought up or bailed out by the government. The last thing we want to do is get our national banks in trouble that they can't get out of. I mean, hell, they're already under duress enough with national debt and wartime spending. And we want to include them in on the problem that's causing so many other banks to fail? DUH.

Arainach might not be too happy about this (he at least sounded resigned to the outcome in the chatbox), but I think you can apply to this situation the same reasoning he applied to the high prices of gas: it acts as a wake up pill to consumers and those in power than something needs to be done about the cause, not necessarily about the symptoms.

Before it was: "we need alternative fuels and fuel sources instead of just opening up more ways for us to get oil: it'll alleviate the problem now, but we'll be even more screwed in the future unless we move away from oil".

Now it's: "we need to put a stop to all this carefree lending and stop making it so easy for people to get further into debt as opposed to being prevented from borrowing further when their credit has already tanked".

Feel free to correct me, because as I said earlier, IANAE. I'm just going on what I've observed.

[Arainach]

The bailout as currently drafted is bullshit. The taxpayers take on the most dangerous and worthless investments without receiving equity in the companies for later profit, without limiting executive golden parachutes, without setting aside money to help with foreclosed home loans.....it's literally just a pile of cash to reward retards who made risky behavior at the cost of everyone who was actually responsible. Rewrite it so that the government gets a stake in the companies instead of making "loans" and I'll support it because Warren Buffet thinks it's necessary and Warren Buffet knows more about the economy than I do.

[Killer_Man_]

Congress needs true leadership to pass bailout
This time, Congress must get it right.

Whenever Congress votes again on a revised emergency economic stabilization package, be it tonight, Thursday or someday soon, it must pass the plan.

The world is watching—from Asian markets to Main Street U.S.A.

Many folks here in the Heartland can’t grasp why Congress should offer $700 billion of taxpayer money to bail out unscrupulous Wall Street entrepreneurs. They can’t understand why regulations weren’t in place to prevent this financial disaster.

But they can understand the pain of watching their retirement accounts and college savings investments plunge like rocks in the river. Did it make sense to reject a $700 billion plan if the result was investors losing more than $1 trillion the same day?

Maybe you don’t need a car loan or home loan right now. But we all can understand the crisis when we see co-workers laid off and hear fears that some Wisconsin companies that rely on short-term borrowing to meet payrolls might not get the cash they need.

We need leadership. Rep. Paul Ryan, R-Janesville, did an admirable job of leading a revolt against the blank check that Treasury Secretary Henry Paulson wanted. Ryan led a small team that drafted an alternative to the three-page bill that Paulson proposed. The bill that Congress rejected by 23 votes Monday included many of Ryan’s provisions. It offered protections for taxpayers in the form of insurance and limits for executive pay.

House Speaker Nancy Pelosi, D-Calif., made a mistake by bringing the package to a vote. She should have realized that she didn’t have the votes and that rejection would spark a panic-driven sell-off in the stock market.

On “The Stan Milam Show” Tuesday, Ryan said Pelosi was told that between 60 and 70 Republicans, no more than 72, would vote for the package. Sixty-five supported it.

Pelosi, too, should have kept quiet instead of blaming the Bush administration before the vote. Sure, the administration shares the blame. Ryan said as much Tuesday. But let’s set blame aside for now. There’s plenty to go around.

Whatever revised plan returns for a vote, we hope it includes more provisions that Ryan suggested. He has studied economics and understands them better than the folks on Main Street and most of his colleagues in Washington.

Ryan says most constituents who contacted his office opposed the bailout. That’s understandable. But it’s really a misnomer to call it a Wall Street bailout. It’s about making money available to stabilize and restore confidence in the credit market here on Main Street.

Banks need that money to keep the economy from seizing up.

“The easy thing for me to do was just go hide in my office and vote the political winds,” Ryan told Milam.

Instead, Ryan voted for a bill he didn’t love because he knew it was the right thing to do for the good of the economy. Too many others—many of whom face tough re-election bids next month—voted with the political winds while silently hoping the bill would pass.

Next time, more members of Congress must show true leadership.


Anther e-mail, it seems congress is working on anther bill.

[deathofcheese]

As hard as it is now, it's probably best that this doesn't get passed because the next time it gets bad, it'll be far worse than it was this time around.

I think today the Senate's going to vote on a slightly different bill with the same outcome. Hearing Fox News (I swear, if we don't get some actual decent channels to watch soon, I'm going to go bonkers having to put up with my parents keeping the TV glued to Fox News), the Senate's expected to pass this bill, which will then go to the House. Since the last one was defeated in the House, I don't think this one could pass either. However, we'll have to wait and see.

[RonDo]

As hard as it is now, it's probably best that this doesn't get passed because the next time it gets bad, it'll be far worse than it was this time around.

I think today the Senate's going to vote on a slightly different bill with the same outcome. Hearing Fox News (I swear, if we don't get some actual decent channels to watch soon, I'm going to go bonkers having to put up with my parents keeping the TV glued to Fox News), the Senate's expected to pass this bill, which will then go to the House. Since the last one was defeated in the House, I don't think this one could pass either. However, we'll have to wait and see.


It may pass this time around but a hair thin margin because of added provisions to get those wavering votes. Still, it doesn't look all that much different but the increase of the FDIC insurance from $100k to $250k at least brings it up to date.

[Arainach]

It brings it up to date before the bill is passed, not taking into consideration the hyperinflation the bill will create.