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Bailout bill, stock market bomb

Posted: September 29, 2008 3:00 p.m.
Updated: November 30, 2008 5:00 a.m.
 

The U.S. House of Representatives today defeated a proposed $700 billion bailout bill designed to rescue and stabilize the nation's financial system.

The defeat of the Emergency Economic Stabilization Act of 2008 by a 228-205 vote sent the Dow Jones industrial average plummeting 778 points, the biggest single-day drop in Wall Street history.

More than two-thirds of Republicans and 40 percent of Democrats opposed the bill. In all, 65 Republicans joined 140 Democrats in voting "yes," while 133 Republicans and 95 Democrats voted "no."

Lawmakers of both parties vowed to try again as soon as possible.

Rep. Howard P. "Buck" McKeon (R-Santa Clarita) issued the following statement this afternoon:

"On Friday, I joined my House Republican colleagues in calling for fundamental reforms to the economic rescue proposal. While we were able to secure critical changes, including the creation of a Wall Street-funded insurance policy rather than simply a taxpayer-funded purchase plan, it was not enough to garner the support of the entire Republican caucus.

"I supported the revised plan because I believe America is facing an unprecedented set of circumstances in which the credit market has essentially frozen and the entire financial system has weakened to a point that decisive Congressional action is necessary," McKeon continued. "My primary concern is the everyday American and the small business owners trying to get credit.

"While I understand how difficult today's vote was for the House, I have serious concerns about what today's failure to pass the economic rescue plan means for the financial markets," McKeon said. "In fact, the Dow Jones Industrial Average plummeted to a loss of more than 700 points, the greatest loss in history. This is a clear indication of how sensitive the market is to congressional action and why the economic rescue plan is vital to protect taxpayers.

"There is a core, wide-scale misunderstanding about the significance of the economic rescue plan and how gravely inaction on our current situation affects individual Americans," he concluded. "Our economy runs on credit and confidence and if we destroy those, everyone's jobs, homes, and retirement savings are put in jeopardy."

See Tuesday's edition of The Signal for comprehensive coverage of today's vote.

The Associated Press contributed to this story.

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