WASHINGTON – The administration’s $700 billion plan to bail out the financial markets was approved today by the U.S. House of Representatives by a vote of 263 to 171.
The measure authorizes the government to buy troubled mortgage-backed assets from financial institutions suffering amid the rise in foreclosures. It also contains $149 billion in tax breaks that were added – in a bipartisan bid to drum up support for the rescue plan – after the original bill was rejected by the House on Monday, sparking a selloff in markets around the world that included a record 778-point plunge in the Dow Jones Industrial Average. (READ MORE)
“The issue is stopping the panic,” Adam Posen, deputy director of the Peterson Institute for International Economics in Washington, D.C., told Bloomberg News. “The plan’s not perfect, but it’s certainly better than doing nothing,” Posen said. “Now, Treasury has to be very aggressive about purchasing a wide range of assets very quickly.”
President George W. Bush intends to sign the rescue plan into law “as quickly as possible,” spokesman Tony Fratto said in a statement before today’s House vote. The revised version of the bill, called the Emergency Economic Stabilization Act of 2008, had cleared the U.S. Senate Wednesday night by 74 to 25. (READ MORE)
“By acting this week, 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,” U.S. Treasury Secretary Henry M. Paulson Jr. said this afternoon, in a statement issued minutes after the bill cleared the House.
“We will move rapidly to implement the new authorities, but we will also move methodically,” he added. “In the coming days we will work with the Federal Reserve and the FDIC to develop strategies that deploy these tools in an expedited and methodical way to maximize effectiveness in strengthening the financial system. … Transparency throughout this process will be important, and I look forward to providing regular updates as we move ahead.”
Information about legislation before the U.S. Congress is available from the Library of Congress at thomas.loc.gov. Information about administration bailout proposals is available from the Federal Reserve Board at www.FederalReserve.gov and the U.S. Treasury Department at www.treas.gov.
