Late Breaking: Bailout Gets Second, Costlier Life from Senate
An estimated $850 billion in revenue, tax cuts and incentives were included in the bill that passed easily on a vote of 74 to 25.
By Lynn Lieu, EGP Staff Writer
It took two days and hours of heated debate, but the Senate last night did what the Congress failed to do on Monday, they passed a bill aimed at bailing out financial institutions.
Following two days of negotiations and more than three hours of floor discussions in which senators from across the country got to speak on the record and to their constituents, senators voted 75-24 in favor of passage.
On Monday, the House of Representatives voted against the Emergency Economic Stabilization Act of 2008 (H.R. 3997). Their proposed $700 billion bailout of the U.S. financial institutions failed by a vote of 206-227.
In response, senate leaders worked quickly this week revising the bill with hopes of bringing legislation to President Bush’s desk by Friday.
The senate bill will include added tax breaks for businesses and alternative energy and an increased FDIC insurance limit. The bill also raises guarantees on savings from $100,000 to $250,000 making it an $850 billion dollar bailout, $150 billion more than members of congress were willing to support just two days earlier.
Senate leaders hope that the additional provisions would help eliminate Congress’ hesitation and objections.
California Sen. Dianne Feinstein voted in favor and said, “It had to be done.” She told KFWB-980, that businesses and people were being hurt by the freezing up of lending institutions and their awarding of credit. She said despite receiving thousands of calls telling her not to bailout Wall Street, she felt she had to vote in favor. “Most people don’t understand what’s in the bill,” she said. “It’s not a gift, like some people believe.”
The bill is expected to reach the House by mid-day Friday. Rejection of similar legislation on Monday resulted from a split vote. Congressional delegates from Los Angeles along with most southland counties were split on Monday’s vote with thoughts from both sides surrounding Main Street. Feinstein said she hopes the House will see that their concerns have been addressed and quickly move forward and pass the bill.
Despite a roller coaster ride on Wall Street, with the Dow falling more than 700 points following the vote, many U.S. representatives said there did not see enough protections for Main Street. “Unfortunately, this legislation will not help families who are stretching paychecks and trying to hold onto jobs without additional steps to stabilize our housing market. It lacks needed reform of bankruptcy laws to allow consumers to renegotiate the terms of their mortgage in bankruptcy courts to help keep their homes,” said Congresswoman Hilda L. Solis (CA-32), who voted against the plan on Monday.
Congressman Henry Waxman (CA-30) felt somewhat differently. In a statement released after Monday’s vote, Waxman said, “I have reluctantly decided to vote for the plan, but I do so only because the alternative of doing nothing is worse. Even the economists who question the structure and effectiveness of the Administration’s proposal say that doing nothing would imperil our economy. That is a risk we should not take.”
According to Waxman, Main Street would be better protected in the long run with a plan than without, a thought shared with others who voted in its favor.
“The stakes for our economy and the American people are high, and I felt it was more important to do something than nothing to prevent a further economic collapse,” said Congressman David Dreier (CA-26), on why he supported the plan proposed earlier this week. “My hope now is that we can keep working together to come up with a solution that helps get our economy back on track.”
Congressman Xavier Becerra (CA-31) voted against Monday’s plan stating, “The greed and irresponsibility that we have witnessed by some on Wall Street, fueled by the deregulation mindset that prevailed in the previous Republican Congress, led us down this perilous path. We definitely need to act to address our economic crisis, but whatever we do the solution must be hardworking families first.”Print This Post
October 2, 2008 Copyright © 2012 Eastern Group Publications, Inc.