(AFP) – Oct 3, 2008
WASHINGTON (AFP) — US President George W. Bush Friday signed an economic rescue bill just hours after the US House of Representatives reversed course and approved the historic 700-billion-dollar Wall Street bailout.
The House, which sparked market and political turmoil by rejecting an earlier version of the bailout on Monday by 228 votes to 205, voted 263 to 171 to pass the largest US government economic intervention since the 1930s.
House Democrats piled up 172 votes for the bailout, compared to 91 members of the minority party, reflecting the waning power of the Bush administration which backed the bailout during two weeks of high political drama.
Democratic leaders credited White House nominee Barack Obama for helping to win over votes of wavering Democrats to end a political crisis which became a major test of leadership between he and Republican John McCain.
"I am hopeful that we have gone a long ways towards restoring confidence in our markets," said Democratic Senate Majority whip James Clyburn.
Lawmakers said that the combination of tumbling stocks, which pulled down market-linked pension plans, and a credit freeze which had bitten deep into the day-to-day economy, had changed the political calculation since Monday.
"A delay of four days led to 60 more votes for the bill," said Barney Frank, the top Democratic House negotiator on the measure.
The top House Republican John Boehner said that the version of the bailout passed by the House was superior to the original version requested by the Bush administration, which some critics described as a "blank check."
"The passage of this flawed by necessary bill is not cause for celebration," he said, saying Congress had allowed sectors of the finance industry to "run amok."
House speaker Nancy Pelosi immediately signed the bailout package, which allows the US Treasury to buy up billions of dollars in bad mortgage debts choking the US economy, and sent it to Bush for his signature.
And she paid tribute to Obama, who will take responsibility for the reeling economy, if he manages to defeat Republican McCain in the election on November 4.
"I really want to commend Barack Obama," Pelosi, said, saying the Illinois senator had helped reassure lawmakers in tough reelection fights.
"He really gave them confidence that this was the right thing to do," Pelosi said.
Obama said while campaigning in Pennsylvania that he was glad "we finally got this dealt with" and called on the Treasury to carry out the plan in a way that "protects taxpayers" and helps avert further foreclosures.
"I want those plans on tap quick so that we start getting some relief to homeowners out in neighborhoods," he said.
Maryland Democratic representatives Donna Edwards and Elijah Cummings said they had received calls from Obama after voting against the original package.
"It meant a lot to me that somebody who at least has a 50-50 shot at being the next president of the United States would take time," Cummings said.
The Senate passed a revised version of the bailout package 74-25 on Wednesday, including sweeteners on extending bank deposit insurance and expired tax breaks in order to get more House Republicans behind the legislation.
The debate resumed amid more shocking news for the world's largest economy which shed some 159,000 jobs in September as the weight of the housing collapse and credit crunch hit a broad swath of industries.
The unemployment rate held at 6.1 percent, a five-year high, with payrolls having fallen by 760,000 this year, the Labor Department said.
Global stocks had sank heavily early Friday with losses in Asia as some lawmakers continued to make known their opposition to using vast amounts of taxpayer money to bail out Wall Street firms.
The amended version of the plan is laced with 150 billion dollars in tax breaks to coax reluctant lawmakers from both the Democratic and the Republican parties to get on board.
The bailout gives the US Treasury power to buy up toxic mortgage debt which has been choking the financial industry and would create a 700-billion dollar federal program to buy bad assets from banks and other financial firms.
The Senate raised the ceiling on federal insurance for bank deposits from 100,000 dollars to 250,000 dollars, and added up to 150 billion dollars in tax break extensions for middle class families and business.
They also retained limits on "golden parachute" severance payments to disgraced Wall Street executives.
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