The US SENATE IS SET TO VOTE ON THE REVISED $700 Billion BAILOUT PACKAGE. Whatever the RESULTS of the SENATE BAILOUT VOTE ARE, the US Economy is in for some hard times ahead.
Senate leaders called a vote for tonight on a $700 billion emergency bailout of the banking system, a move designed to give the House a political lift after the legislation's spectacular crash there on Monday.
Congressional leaders seldom call a vote unless they know the outcome beforehand. House leaders miscalculated Monday, resulting in an unexpected defeat for the bailout. Now sweeteners are under discussion to lure dissenters in both parties.
Alarmed senators warned that a credit meltdown is under way and that the financial contagion is spreading to ordinary businesses nationwide. The Senate Vote on the $700 Billion bailout plan is back on the table and the results of the vote are not out yet
House leaders hope to try to move on the bailout again this week. They will have to overcome a powerful public backlash and a fear among members facing difficult re-election bids that voting for the bailout could doom them.
The bill's failure in the House amounted to a colossal repudiation of the nation's leaders, including President Bush and his would be successors, Democrat Barack Obama and Republican John McCain, and House leaders. Each has chillingly described the emergency intervention as vital to forestalling a deep economic contraction that could pull millions of working people into its vortex.
Aides described a scene of miscalculation and miscommunication between House Speaker Nancy Pelosi, D-San Francisco, and her Republican counterpart, Minority Leader John Boehner of Ohio, that will have to be overcome before any re-vote is taken.
Democratic aides said Pelosi moved forward on the understanding that GOP leaders would deliver the 100 votes, half their caucus, that they had promised. Democrats had rounded up more than their share - 60 percent of their reluctant members - overnight after leaders signed off Sunday with the Bush administration on a final agreement.
Yet even with the financial network CNBC blaring in the House cloakroom - announcing a stock market plunge that would erase in a few hours $1.2 trillion in pensions, 401(k) plans and other wealth - the "no" votes piled up. Leaders held the vote open for nearly half an hour past the time it was supposed to end, but the result did not change. The legislation fell 12 votes short, 133 Republicans and 95 Democrats voting no.
Back and forth
Democrats said that far from being warned that they should postpone the vote, GOP leaders assured them an hour before that they were confident that they could get enough members. They pointed to Republican whip Roy Blunt's statement after meeting with his members Sunday night that he expected "substantial support" for the legislation.
A Republican aide said Democrats were given "an accurate and honest whip count" telling them how many GOP votes to expect, and they continued to blame Pelosi for poisoning 10 potential GOP converts with a partisan speech. Knowing that the vote was failing, the aide said Pelosi could have leaned on more Democrats, including her fellow Californians, to change sides. Four Bay Area House Democrats voted no: Fremont's Pete Stark, Oakland's Barbara Lee, St. Helena's Mike Thompson and Petaluma's Lynn Woolsey.
Republicans will not identify the 10 waverers, who Democrats suspect are phantoms, and it seems unlikely that a Pelosi diatribe they had heard many times before would so affect what they called a vote of conscience. Still, Pelosi's highly charged partisan style, delivered at exactly the moment when she needed to rally every member for what everyone knew was a tense, close and politically fraught vote of great consequence, stood in sharp contrast to the bipartisan call for national unity delivered by her own top lieutenant, Maryland Democrat Steny Hoyer, and by Boehner. They, unlike Pelosi, received strong applause after they spoke.
Boehner sympathized with members, saying votes don't get much tougher, and acknowledging that the bill he called a "mud sandwich" did not contain many things that Democrats wanted. He pleaded with both sides to vote "not what is in the best interest of our party, not what's in the best interest of our re-election (but) what's in the best interest of our country."
'For his courage'
Hoyer stood to congratulate Boehner "for his courage" and called out by name as his friends the Republican as well as Democratic leaders, Bush, Obama and McCain, saying "on this day of consequence, let us meet the challenge ... let us be the best of the people's House."
Pelosi, by contrast, delivered a partisan rebuke, calling Treasury Secretary Henry Paulson's original plan "arrogant and insulting," expressed her shock and outrage and denounced eight years of "a right-wing ideology of anything goes." While she thanked Boehner in passing, she dwelled mostly on what Democrats had done to fix the plan, finishing not with a call for unity but the observation that soon the country would have a new president.
Obama and McCain helped loosen the standoff Tuesday when both endorsed an increase in the maximum amount covered by the Federal Deposit Insurance Corp., from $100,000 to $250,000, to help slow a bank run by large depositors. Many House Republicans had called for such action, and Boehner welcomed the candidates' support. FDIC chair Sheila Bair also called for authority to temporarily increase the limit.
The Securities and Exchange Commission also said it might alter "mark to market" accounting rules that force financial institutions to write down their distressed assets to market value. Republicans argued that because there is no market for toxic mortgage securities, the rule is pushing otherwise sound institutions toward failure by forcing them to acknowledge losses on assets before they sell them.
Discussions were under way to lure more Democrats with economic stimulus measures such as extended unemployment benefits and highway spending, both backed heavily by unions. Oakland's Lee cited the lack of such aid as the key reason for her vote against the bailout.
Obama, speaking in Reno, described the current situation as "very dangerous."
"This is one of those defining moments when the American people are looking to Washington for leadership," Obama said. "It is not a time or politics. ... This is no longer just a Wall Street crisis. It's an American crisis, and it's the American economy that needs this rescue plan."
McCain, who had suggested before the vote that House Republicans would support the bailout, said "We're going to have to change enough Republican and Democrats' minds." But he also said there were actions the administration could take now "with the stroke of a pen" to spend as much as $1 trillion that he argued was authorized under the housing bill Congress passed this year to buy distressed mortgages.
GOP attack video
The Republican National Committee issued an attack video Tuesday morning that seemed to contradict McCain's backing for the bailout. "Wall Street squanders our money and Washington is forced to bail them out with - you guessed it - our money," followed by the charge that Obama would spend another $1 trillion "even after the bailout."
The desertion of House Republicans has proved embarrassing to McCain, who on the morning the vote failed had bragged about his efforts to broker the agreement and rally his party.
Both candidates spoke with Bush by phone. Pelosi spent the day on the phone with the White House and congressional leaders.
Sen. John Kerry, D-Mass., a close Obama ally, said in a conference call that he was hearing alarm bells from businesses, banks and economists that markets are precarious, and he warned of an "economic tsunami" that could cost "literally millions of jobs."
Sen. Robert Bennett, R-Utah, said he has gotten "an avalanche of phone calls from angry Utahns" denouncing a Wall Street bailout. But he said he also heard from a large auto dealer who is the largest employer in his town who told him that with a shutdown in bank lending, "I will be unable to make payroll on Wednesday."
No comments:
Post a Comment