The House of Representatives voted 263-171 to pass a $700 billion Wall Street rescue bill and sent it to President Bush, who signed it into law this afternoon.
The Senate passed the measure earlier this week.
The House had defeated a bailout measure last week but a number of Democrats and Republicans switched to yes votes this week.
“By coming together on this legislation, we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country. We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy,” President Bush said.
House Republican Leader John Boehner, R-Ohio, said that House Republicans “stood on principle throughout this process” and were able to press for improvements in the original bailout plan offered by Treasury Secretary Hank Paulson and the Bush Administration, including raising the FDIC insurance cap, the SEC’s change to mark-to-market rules for certain assets that have worsened the credit crisis, and an insurance program that forces Wall Street to bear a financial burden in the rescue package.
House Majority Leader Steny H. Hoyer, D-Md., today spoke on the House floor before the vote on the measure, titled the Emergency Economic Stabilization Act.
“On Monday, the salient dividing line in this House was not between parties: It was between those who understood the dangers of doing nothing, and those who had yet to be convinced.
“What happens on Wall Street is bound up with the jobs of millions, and the retirements of millions, and the homes of millions, and the dreams of millions. And if disaster strikes those few square miles in Manhattan, it will spread until every one of those jobs and retirements and homes and dreams is in danger,” he said.
He said many people were involved in improving on the Administration’s plan, including restrictions on executive compensation, and obligating the financial community to pay back the loan. He said not all lawmakers supported all of the add-ons in the latest bill.
“The heart of the bill remains a plan for the government to buy up bad financial assets, restoring the flow of credit,” he said. “But an emergency like this calls for the courage to compromise.”
Treasury Secretary Paulson, who spearheaded the Administration’s efforts for a rescue plan, praised the vote. “Congress has proven that our nation’s leaders are capable of coming together at a time of crisis, even at a critical stage of the political calendar, to do what is necessary to stabilize our financial system and protect the economic security of all Americans,” he said.
Paulson said there is “no one-size-fits-all solution to alleviating the stress” in the financial system but maintained that the $700 billion plan “contains a broad set of tools that can be deployed to strengthen financial institutions, large and small, that serve businesses and families.”
President Bush said the bill was necessary to address the problem of banks restricting the flow of credit to businesses and consumers.
“The legislation Congress passed today addresses this problem head on by providing a variety of new tools to the government — such as allowing us to purchase some of the troubled assets, and creating a new government insurance program that will guarantee the value of others. The bill also ensures that these new programs are carried out in a way that protects taxpayers,” he said.
He said improved credit will help businesses stock their shelves and meet their payrolls, help families get loans for cars and homes and college education, and allow state and local governments to continue to fund basic services.
The bill also includes tax incentives for businesses to invest and create jobs. It temporarily expands federal insurance for bank and credit union deposits from $100,000 to $250,000. It provides families with relief from the Alternative Minimum Tax.
President Bush said he knows some Americans have concerns about the legislation, especially about the government’s role and the bill’s cost. “As a strong supporter of free enterprise, I believe government intervention should occur only when necessary. In this situation, action is clearly necessary.”
He said the ultimate cost should be far less than the $700 billion approved under the legislation because “the government will purchase troubled assets and once the market recovers, it is likely that many of the assets will go up in value. And over time, Americans should expect that much — if not all — of the tax dollars we invest will be paid back.”
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