U.S. House Rejects $700 Billion Financial-Rescue Plan
โพสต์แล้ว: อังคาร ก.ย. 30, 2008 2:38 am
Sept. 29 (Bloomberg) -- The financial-rescue plan intended to restore confidence in the U.S. banking system collapsed in partisan wrangling as the House of Representatives voted down the proposal backed by the Bush administration and congressional leaders of both parties.
Markets plunged as the House rejected, by a vote of 228 to 205, the $700 billion measure to authorize the biggest government intervention in the markets since the Great Depression. The Dow Jones Industrial Average fell 564 points, or 5 percent to 10,579, at 3:05 p.m. New York time.
The defeat of the legislation set off a scramble among the plan's backers for additional support before another vote, which likely won't come until later in the week.
``I'm very disappointed,'' said House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat. ``The Republicans killed this.'' Republicans blamed Democratic House Speaker Nancy Pelosi of California.
Representative Adam Putnam of Florida, the No. 3 House Republican, said Pelosi's ``speech cost us votes'' because it set a ``partisan tone,'' a reference to her comment before the vote blaming Bush administration policies for the financial crisis.
The legislation would have given Treasury Secretary Henry Paulson broad authority to buy troubled assets from financial companies to help ease a lending crunch triggered by the decline of the housing market.
`Disappointed'
President George W. Bush, who personally lobbied lawmakers to support the measure today, will consult with congressional leaders ``to determine the next step,'' said spokesman Tony Fratto.
``Obviously, we are very disappointed in the outcome,'' Fratto said. ``There is no question the country is facing a difficult crisis that needs to be addressed.''
Bush earlier today said the legislation was needed to ``help keep the crisis in our financial system from spreading throughout our economy.'' Federal Reserve Chairman Ben S. Bernanke warned of ``grave threats'' to the financial system if Congress rejected the plan.
Opponents said the measure was too risky and too costly.
``I fear that ultimately it may not work,'' Representative Jeb Hensarling, a Texas Republican, a leader of the opposition, said before the vote. The plan may put the U.S. on the ``slippery slope to socialism,'' he said.
Elections Nearing
Lawmakers were reluctant to support the measure a month before congressional elections because some voters viewed it as ``bailing out Wall Street,'' Frank said.
``The American people rejected this bailout and now Congress did likewise,'' said Republican Representative Mike Pence of Indiana.
The final plan considered by the House would have given Paulson an immediate $250 billion to buy bad loans from financial companies, with the rest to be doled out in stages.
In her speech before the vote, Pelosi, a California Democrat, said the Bush administration's policies were ``built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision and no discipline in the system.''
House appropriations committee chairman David Obey scoffed at assertions that Pelosi's speech turned Republicans against the package, sinking the bill. ``Do they really think it's credible to say that they changed their mind on how they were going to vote because of a speech?'' he said. ``If they're that tenderhearted, they don't belong in this place.''
Reviving Lending
Paulson and Bernanke proposed the rescue plan to revive lending and restore the flow of credit to the U.S. economy. Opposition to their Sept. 20 proposal for almost unfettered authority to purchase assets has been strongest in the House, particularly among Republicans who balked at its cost and pressed for more taxpayer protections.
The compromise legislation reached yesterday included a proposal by House Republicans that provides for government insurance for mortgage-backed securities. The plan included a bipartisan oversight board to monitor to purchase and sale of assets, and imposed limits on the compensation of executives at participating companies.
House Republican leaders today, in speeches on the House floor, urged their colleagues to support a bipartisan House and Senate compromise crafted over several days.
Still, lingering opposition from many Republicans prompted Democratic leaders, including House Speaker Nancy Pelosi and Majority Whip James Clyburn, to circulate among Democrats on the House floor this morning to seek more support.
House Minority Whip Roy Blunt said the drop in the markets would pressure Congress to return to the issue.
``The reality of the impact this can have on the markets will have a big impact in getting people back to wanting to work together and get this problem solved,'' Blunt, a Missouri Republican, said at a press conference after the failed vote.
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Markets plunged as the House rejected, by a vote of 228 to 205, the $700 billion measure to authorize the biggest government intervention in the markets since the Great Depression. The Dow Jones Industrial Average fell 564 points, or 5 percent to 10,579, at 3:05 p.m. New York time.
The defeat of the legislation set off a scramble among the plan's backers for additional support before another vote, which likely won't come until later in the week.
``I'm very disappointed,'' said House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat. ``The Republicans killed this.'' Republicans blamed Democratic House Speaker Nancy Pelosi of California.
Representative Adam Putnam of Florida, the No. 3 House Republican, said Pelosi's ``speech cost us votes'' because it set a ``partisan tone,'' a reference to her comment before the vote blaming Bush administration policies for the financial crisis.
The legislation would have given Treasury Secretary Henry Paulson broad authority to buy troubled assets from financial companies to help ease a lending crunch triggered by the decline of the housing market.
`Disappointed'
President George W. Bush, who personally lobbied lawmakers to support the measure today, will consult with congressional leaders ``to determine the next step,'' said spokesman Tony Fratto.
``Obviously, we are very disappointed in the outcome,'' Fratto said. ``There is no question the country is facing a difficult crisis that needs to be addressed.''
Bush earlier today said the legislation was needed to ``help keep the crisis in our financial system from spreading throughout our economy.'' Federal Reserve Chairman Ben S. Bernanke warned of ``grave threats'' to the financial system if Congress rejected the plan.
Opponents said the measure was too risky and too costly.
``I fear that ultimately it may not work,'' Representative Jeb Hensarling, a Texas Republican, a leader of the opposition, said before the vote. The plan may put the U.S. on the ``slippery slope to socialism,'' he said.
Elections Nearing
Lawmakers were reluctant to support the measure a month before congressional elections because some voters viewed it as ``bailing out Wall Street,'' Frank said.
``The American people rejected this bailout and now Congress did likewise,'' said Republican Representative Mike Pence of Indiana.
The final plan considered by the House would have given Paulson an immediate $250 billion to buy bad loans from financial companies, with the rest to be doled out in stages.
In her speech before the vote, Pelosi, a California Democrat, said the Bush administration's policies were ``built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision and no discipline in the system.''
House appropriations committee chairman David Obey scoffed at assertions that Pelosi's speech turned Republicans against the package, sinking the bill. ``Do they really think it's credible to say that they changed their mind on how they were going to vote because of a speech?'' he said. ``If they're that tenderhearted, they don't belong in this place.''
Reviving Lending
Paulson and Bernanke proposed the rescue plan to revive lending and restore the flow of credit to the U.S. economy. Opposition to their Sept. 20 proposal for almost unfettered authority to purchase assets has been strongest in the House, particularly among Republicans who balked at its cost and pressed for more taxpayer protections.
The compromise legislation reached yesterday included a proposal by House Republicans that provides for government insurance for mortgage-backed securities. The plan included a bipartisan oversight board to monitor to purchase and sale of assets, and imposed limits on the compensation of executives at participating companies.
House Republican leaders today, in speeches on the House floor, urged their colleagues to support a bipartisan House and Senate compromise crafted over several days.
Still, lingering opposition from many Republicans prompted Democratic leaders, including House Speaker Nancy Pelosi and Majority Whip James Clyburn, to circulate among Democrats on the House floor this morning to seek more support.
House Minority Whip Roy Blunt said the drop in the markets would pressure Congress to return to the issue.
``The reality of the impact this can have on the markets will have a big impact in getting people back to wanting to work together and get this problem solved,'' Blunt, a Missouri Republican, said at a press conference after the failed vote.
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