House Passes Bailout Bill
WASHINGTON - The US House of Representatives on Friday approved a revised 700-billion-dollar Wall Street bailout, bowing to intense pressure to help avert a global economic meltdown.
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 in favor to 171 against in favor of the largest US government economic intervention since the Great Depression of the 1930s.
Congressional leaders had worked together to win over more Republican and Democratic votes amid signs that businesses are already being hurt by a failure to procure credit, triggered by the US subprime mortgage crisis.
Three Democratic lawmakers said earlier they would switch their votes. Several revealed that calls from White House nominee Barack Obama played a key role in their decision. A House source said four other Democrats were also switching.
House Minority whip Roy Blunt said the pain of the deepening credit squeeze was now being felt by the public.
"Calls to members officers are beginning to even out, people are beginning to realize this has impacts on their pension plans."
Rahm Emanuel, a senior member of the House Democratic leadership spoke out in support the bill from the House floor.
"This is only the first step. While we address the balance sheets of banks, the next step must now address the checkbooks for middle class families and the struggles that they face," he 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 Republicans behind the legislation.
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.
Obama said during the call that he would push attempts to reform bankruptcy laws to help ill-fated homeowners escape foreclosure, Cummings said, but stressed urgent action to save the US financial system was vital.
Edwards said Obama reached out to her on Thursday morning, as she was considering how she would come down in Friday's looming vote.
"I had a very good conversation with Senator Obama yesterday morning, and I had to weigh on that the entire day in coming to this decision," Edwards said.
There were still many holdout lawmakers though, who voiced deep skepticism whether the new measure would work, while bleakly concluding that the bill was a necessary evil.
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.