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Monday, September 29, 2008

House Just Says No to Fleece in Our Time



The House on Monday voted down the Bush administration's historic $700 billion financial rescue plan, triggering one of the worst days for stocks and dealing a sharp blow to bipartisan efforts, despite repeated warnings about the U.S. teetering on the brink of an economic precipice.

A clearly disappointed Treasury Secretary Henry Paulson blasted another dire warning Monday afternoon about stressed world markets reducing credit availability -- a threat to American jobs and livelihood.

"This is much too important to simply let fail," Paulson said.

Officials are trying to figure out what the next step will be for rescue-related legislation, and an aide in the House speaker's office said lawmakers are ready to work in a bipartisan way. U.S. stocks plunged when the vote results became clear, and the Dow Jones Industrial Average ended down 777 points, or 7%, to 10,365.

Finger pointing followed soon after the vote. Republican leaders accused House Speaker Nancy Pelosi of driving away some GOP votes with a partisan floor speech. Rep. Barney Frank, chairman of the financial services committee, said Republicans may be "covering up the embarrassment" of not having the votes.

"And because somebody hurt their feelings they decide to punish the country," Frank said. "I mean, I would not have imputed that degree of pettiness and hypersensitivity."

Pelosi said bipartisan needs to move legislation forward: "The crisis has not gone away."

Some House members balked at giving the Treasury immense power -- the ability to buy up hundreds of billions of bad debt. And there were ongoing complaints over insufficient accountability, transparency and large-scale government intervention. But Paulson, along with Federal Reserve Chairman Ben Bernanke, has been intent over the past week on broadcasting warnings about dire consequences if the plan was even delayed.

With elections approaching, lawmakers, both Democrats and Republicans, are under intense scrutiny, and nervous about voting for a plan that risks so much taxpayer money without any definitive promise of success. In the end, there were 205 in favor of the legislation and 228 against. Among Democrats, 140 voted in favor and 95 against. Among Republicans, 65 voted in favor and 133 against.

Critics also say the plan inadequately addressed job losses and a distressed housing market --problems that underlie current economic weakness. Meanwhile, those in favor of the plan were looking to treat a manageable symptom -- the frozen credit market -- if not the actual disease.

A vote in the Senate was expected Wednesday, and the president would have followed with a speedy signature.

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