Congress set to vote on bailout

US lawmakers agreed a 700-billion-dollar bailout for debt-stricken Wall Street banks and sent the legislation aiming to stem the US financial crisis for Congress to start voting on Monday.

A compromise package, unveiled Sunday after tense negotiations between rival party leaders and White House officials, will go first before the House of Representatives.

The plan, anxiously awaited by world markets, is not yet certain to be approved however.

The largest government economic intervention since the Great Depression of the 1930s aims to shore up the economy after the bursting of US housing bubble ravaged the global banking system and dried up credit.

President George W. Bush praised the draft legislation, saying the rescue was needed "to help protect our economy against a system-wide breakdown."

Bush, who was due to make a statement early Monday, said the plan "sends a strong signal to markets around the world that the United States is serious about restoring confidence and stability to our financial system."

The package gives the treasury secretary authority to buy up toxic mortgage-related assets in troubled banks in hopes of easing the credit flow and reviving the housing market.

Congressional leaders, mindful of the looming November 4 presidential election, had been rushing to strike a deal before global markets reopened for the week.

Japanese share prices rose 0.46 percent in morning trade on Monday after the deal but European markets opened down.

With some conservative Republicans and liberal Democrats steadfastly opposed to the plan, it was unclear if the bailout would win approval.

"We now have a deal that promises to bring near-term stability to our financial turmoil, but at what price?" Republican Congressman Michael Pence, a critic of the bailout, asked in a letter to colleagues.

White House hopefuls Republican John McCain and his Democratic rival Barack Obama offered cautious backing for the plan.

The accord came after several weeks of global financial market turmoil caused by the overexposure of US and international financial firms to the US subprime mortgage crisis.

Democratic lawmakers said the revised plan, which ran more than 100 pages, was better than the three-page White House version because it included stricter oversight and caps on executive pay packages.

"Working in a bipartisan way, we sent a message to Wall Street. The party is over," said House Speaker Nancy Pelosi.

"The era of golden parachutes for high-flying Wall Street operators is over. No longer will the US taxpayer bail out the recklessness of Wall Street."

The rescue , formally titled the Emergency Economic Stabilization Act of 2008, calls for the immediate release of 250 billion dollars so the government can buy up troubled assets.

The president is authorized to approve a further 100 billion dollars, but the plan gives Congress a veto over purchases above that limit and sets a ceiling for all purchases of 700 billion dollars.

The rescue operation will be overseen by a board including the chairman of the Federal Reserve, the treasury secretary and the chairman of the Securities and Exchange Commission.

The board will be one of four separate oversight agencies or processes, which also include a presence in the Treasury office and an independent inspector general that would monitor the treasury secretary’s actions.

There will be no "golden parachutes" for CEOs or other executives who lose or leave their jobs at companies participating in the plan as long as the government holds equity in those firms.

Democratic lawmakers had called for financial firms to help pay for any losses incurred by the taxpayer but the draft legislation left the question open for the next president to tackle.

The White House sought to reassure anxious Republican lawmakers, saying the government expects assets acquired from troubled banks to eventually generate income and ease any potential burden on taxpayers.

The Washington Post welcomed the deal as an example of efficient political cooperation.

"As difficult and bitter as the process has been, the rescue, if it passes both houses of Congress, could be remembered as a case study in bipartisanship under extremely difficult circumstances," a Post editorial said.


  1. Azariel

    “You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning.” –Andrew Jackson, 1828 (to a group of investment bankers trying to persuade him to renew their charter)

    And then there is this guy-wish he was around with these bankers-for that matter-either of them-Jackson or Capone!

    “You get more with a kind word and a gun than with a kind word” – Al Capone

  2. woody188

    Both candidates showed who they really support by coming out in favor of this terrible bill. It’s all for bankers and mom and pop can rot in the ally as far as they care.

    Once again, they want us to think we have no choice between their evils.

    But there is a choice.

    Vote 3rd party.

  3. Malibu

    I believe that McCain crashed into the government on Friday and could not change the opinions of any Republican to follow him. Both men failed their leadership. Ron Paul did not!


  4. DejaVuAllOver


    By the way, folks this is just “banking as usual” in the US. Our government has a 230+ year history of banking giveaways at the slightest sign of trouble. Research any of the depressions: 1817, 1870, 1885, 1929…..1981….. it’s always the same broken record. “We bankers are just too important to let our gravy-train dry up. We’re too old and fat to get REAL jobs….” God Forbid the peon working man should ever get a break.

    And did anyone ever wonder why our bankers are so trigger happy and just itching to start more wars for Israel, for example?

  5. ekaton

    House members are the most accessible by their constituents. I believe they are the must susceptible and therefore wary of pitchforks, tar, feathers and rails.

    — Kent Shaw

  6. Phestif

    The House vote is sits at 205 Yea 228 Nay with 1 abstention. I guess I was wrong that the congressional House members would vote like criminals with the Bush administration. The “politics of fear” has momentarily lost its clout. I’m wondering how this will now unfold.


  7. ekaton

    Wow. The DOW is fluctuating by a hundred points up and down in seconds!

    Screw the “bailout” and let the chips fall. The longer the real crash is delayed the worse will be the result.

    The DOW went from -449 to -634 in the time it took to write this comment.

    Kent Shaw

  8. gazelle1929

    As of now, 2 PM Eastern, it looks as though it’s going down. Whew! Must have been some real armtwisting by the voters.

  9. Carl Nemo

    Lending institutions make their money from the interest they charge on mortgages, installment loans, credit card debt etc.

    Once a loan becomes a non-performing asset then the check is no longer in the mail; ie., meaning no revenues for the lenders. They also do “writedowns” which most people think is a loss, but it is not. It’s a business write-off; ie., a loss which allows them a friendlier bottom line concerning their taxes. The taxpayers in the end have to eat their writedowns and make up the difference in some other way. Generally speaking it’s being slapped on “our tab”; ie., the national public debt.

    So once they foreclose on properties, they hold non-performing assets. These assets are worthless in these highly illiquid times and in fact are at high hazard of depreciating due to vandalism and outright theft of valueable parts of the structures, the copper pipe, copper wiring, bathroom and electrical fixtures and appliances.

    What’s interesting about the so-called bailout it’s these “sorry” assets that Paulson is proposing that we buy from the banks. So the bankers along with crooked appraisers and real estate carnies, puff the market with the Fed’s ever-accommodating easy money policy; then it goes bust and they now want us to purchase their engineered “mistakes”…say what?!

    This bailout is a scam with no further purpose other than for the Bushistas to line the pockets of their buddies in the banking sector and Wall Street insiders. Once the first 250 billion goes out the door it will simply go “poof” as these banking criminals fill in the red ink potholes of their portfolios as they’ve done to this point along with many of the “King Rats” at the top bailing out to greener, safer pastures with their ill-gotten lucre; ie., the sunny beaches in South America and the Euro zone.

    Once all the bailout money is gone with no visible improvement noted, the people of this country are going to standby with their jaws hanging open as to what happened?!

    Our Congressional leadership regardless of party affiliation should not only say no, but “HELL NO” to this patently criminal scheme to ripoff American “tax slaves” even further.

    Although 700,000 million dollars; ie.,, 700 billion sounds like a lot of money, it’s the equivalent of a pail of freshwater dumped into the Pacific Ocean relative to just how dead-assed broke this country has become. Rest assured they’ll be back in less than 90 days with their hand out again for even more money!

    Evil has been stalking this land with ever greater intensity since WWII and we are now beginning to feel the end result of 60 years of increased apathy on the part of the electorate.

    We have let them sow the wind and are now to reap the whirlwind of this ongoing criminal activity at the highest levels of our government.

    Carl Nemo **==