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Bush: Our economy continues to face serious challenges
By The Associated Press
Tags: financial crisis, Israel News 

U.S. lawmakers in both parties - along with U.S. President George W. Bush - are waiting to see whether their historic $700 billion bailout for the financial industry, approved by Congress and signed by Bush Friday, can stabilize the tottering economy and prevent a broader meltdown.

"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the plan cleared the U.S. Congress, although he conceded, "our economy continues to face serious challenges."

Reluctant Democrats and Republicans banded together Friday to approve the rescue plan - the broadest government intervention in markets in decades - on a 263-171 vote in the House of Representatives. Bush swiftly signed it.
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Just a month before elections in which the sour economy is the dominant theme, Congress pushed the package through in a striking turnaround from the measure's failure earlier in the week, which sent the stock market plummeting.

Friday's vote capped an extraordinary two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act.

And it was followed by somber reminders on Wall Street, where enthusiasm over the rescue gave way to worries about obstacles still facing the economy, sending the Dow Jones industrials down 157 points. The U.S. Labor Department said earlier in the day that employers had slashed 159,000 jobs in September, the largest cut in five years.

Scores of jittery lawmakers who opposed the measure Monday hopped aboard a revised version in the final vote, fearing a crushing economic contagion that was spreading to their constituents.

"Let's not kid ourselves: We're in the midst of a recession. It's going to be a rough ride, but it will be a whole lot rougher ride without the rescue plan," said Republican Rep. John A. Boehner, the minority leader, as he prepared to cast his vote.

U.S. Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.

The bailout, which gives the government broad authority to buy up toxic mortgage-related investments and other distressed assets from tottering financial institutions, is designed to ease a credit crunch that began on Wall Street but is engulfing businesses around the nation.

"In these past two weeks, we've seen things we never thought we would see before in terms of the economic insecurity of our own country," said House Speaker Nancy Pelosi, a Democrat. She said the measure would begin to shape the financial stability of our country and the economic security of our people.

Democratic U.S. Rep. Barney Frank, the Financial Services Committee chairman, said the rescue bill was just the beginning of a much larger task Congress will tackle next year: overhauling housing policy and financial regulation in a legislative effort he compared to the New Deal.

"We were the EMTs (emergency medical technicians) rushing to the rescue of an economy that suddenly found itself choking, but now we have to perform more serious reform," Frank said.
Just four days earlier, the previous version of the bill was sent down to defeat, largely at the hands of angry conservative Republicans. On Friday, a total of 33 Democrats and 25 Republicans switched from opposition to support.
In all, 91 Republicans joined 172 Democrats to support the measure while 108 Republicans and 63 Democrats voted no.

The reversal reflected a high-stakes political environment. Some lawmakers were worried about their own jobs, but others - mostly Democrats - focused on the prospect that a new president could have a far more significant effect on the economy than any one piece of legislation.

Several of the Democratic switchers were members of the Congressional Black Caucus who said they changed course after securing commitments from presidential candidate Barack Obama that he would back legislation to help struggling consumers and homeowners facing foreclosures if he wins the presidential race.

"It's not too often you get the future president telling you that his priority matches your priority," said Rep. Elijah Cummings, one of 13 black lawmakers who switched from no to yes.

Republican presidential candidate John McCain also lobbied for the measure, according to aides who declined to say whom he called.

Rep. Roy Blunt, the party vote-counter, said McCain phoned Rep. John Shadegg, a fellow Arizonan who switched to yes.

The legislation's roller-coaster ride through Congress began at a somber meeting in Pelosi's office in mid-September where Paulson and U.S. Federal Reserve Chairman Ben Bernanke frightened senior Democrats and Republicans with their warnings of an impending economic collapse without quick legislative action.

As lawmakers scrambled to draft a bill, they were barraged by angry calls from constituents to reject what many saw as a huge giveaway to the very financial institutions that helped cause the subprime mortgage meltdown at the root of the economic crisis - with nothing to help its ordinary victims.

"Pray for our republic," intoned Rep. Marcy Kaptur, a Democrat and leading opponent of the measure. "She's being placed in very uncaring and greedy hands."

Supporters said the prospect of economic disaster superseded their political fears.

I may lose this race over this vote, but that's OK with me, said Republican Rep. Sue Myrick, who switched her vote to favor the measure. This is the right vote for the country.

After the breathtaking House defeat on Monday, Senate leaders took custody of the rescue, adding on $110 billion in tax breaks designed to attract additional support. They attached the overall measure to a popular bill mandating broader mental health coverage in the insurance industry.

The rescue measure was changed to lift, from $100,000 to $250,000, the cap on government bank deposit insurance - a key priority for Republicans. Also key to winning GOP support was a decision by the U.S. Securities and Exchange Commission to ease accounting rules that require financial institutions to show the deflated value of assets on their balance sheets.

The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the presidential candidates and outside groups joined forces behind the measure.

The maneuvers worked - augmented by a shift in public opinion that occurred after the stock market took its largest-ever one-day dive on Monday.

The plan - initially a three-page request from the Bush administration for unlimited power to use $700 billion any way it saw fit to stabilize markets - swelled to more than 450 pages as negotiators added restrictions for the administration and sweeteners for anxious members of Congress.

Lawmakers added greater supervision over the $700 billion - including a process in which Congress could vote to block half the money - measures to protect taxpayers and crack down on golden parachutes for corporate executives whose companies benefit from the bailout.

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      1.   $850 Billion, Not $700 Billion 19:59  |  Mark of Lewiston 03/10/08
      2.   Watch Dow now begin a relentless decline 20:57  |  Clickfool 03/10/08
      3.   A stopgap with the real problems surfacing after the elections .. 20:59  |  redmike 03/10/08
      4.   For Mark of Lewiston # 1 21:03  |  Clickfool 03/10/08
      5.   bailout = jailin ??? :) 21:31  |  Swiss (Dino) 03/10/08
      6.   I wonder how much of this wedge 22:10  |  Paul Wood 03/10/08
      7.   700 billion 22:15  |  American 03/10/08
      8.   Clickfool - Biden Obama & McCain 22:39  |  Mark of Lewiston 03/10/08
      9.   Dino and Chickfool 22:39  |  Frank 03/10/08
      10.   And don`t forget 22:50  |  Mark Lincoln 03/10/08
      11.   Fools Gold. 23:39  |  Stephen. 03/10/08
      12.   Plutocrats and bankers of W street baile out..... 23:53  |  Daniel 03/10/08
      13.   The Socialist Republic of the United States of America. : ) 00:34  |  Maureen Ann 04/10/08
      14.   Printing money 01:54  |  Lori 04/10/08
      15.   # 9 Frank 02:12  |  Swiss (Dino) 04/10/08
      16.   Unity under McCain/Palin - Tyranny under Obama/Biden 03:33  |  ToleranceForEver 04/10/08
      17.   Maureen Ann - not socialist 06:01  |  Mark Lincoln 04/10/08
      18.   bush`s incompetence legacy 06:13  |  real vision 04/10/08
      19.   #17 Mark Lincoln. Little steps. People are waking up. 06:59  |  Maureen Ann 04/10/08
      20.   The world is lucky this time 09:14  |  MiddleStanian 04/10/08
      21.   I`m afraid I must agree with most Israel bashers on this subject 10:17  |  S 04/10/08
      22.   #14 - they are going to borrow and not print money .. 11:35  |  redmike 04/10/08
      23.   #18 you know very well that Clinton caused the problem 11:45  |  redmike 04/10/08
      24.   our economy would not be facing these challenges if DC MORONS 16:47  |  glenna 04/10/08
      25.   Racketeers: Hunt Brothers but, American Soil not Silver 22:06  |  UsedToPostHere 04/10/08
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