Bloated with pork, the massive $700 billion bailout bill passed the House Friday and President Bush immediately signed the legislation into law, turning to taxpayers to save government and Wall Street from themselves.
The pork added at least $120 to the final tab and victory from the same House that turned it down earlier in the week proved that all it takes is arm twisting, promises and outright bribes to turn controversial legislation into law.
Proponents of the bill claim the bailout is necessary to avoid a deepening recesssion and perhaps even a depression but critics argue that the bailout is too late to do any good.
Like so many laws passed by Congress, those who voted for the bill have no idea if it will work. Many can’t even say what’s in the bill.
With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.
The 263-171 vote capped two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act.
"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the plan cleared Congress, although he conceded, "our economy continues to face serious challenges."
His somber warning was underscored on Wall Street, where enthusiasm over the rescue gave way to worries about obstacles still facing the economy, and the Dow Jones industrials dropped 157 points. The Labor Department said earlier in the day that employers had slashed 159,000 jobs in September, the largest cut in five years.
The historic vote was a striking turnaround from the measure’s spectacular failure earlier in the week, which had triggered a massive stock sell-off and prompted jittery lawmakers — fearing a crushing economic contagion that was spreading to their constituents — to reconsider.
"Let’s not kid ourselves: We’re in the midst of a recession. It’s going to be a rough ride, but it will be a whole lot rougher ride" without the rescue plan, said Rep. John A. Boehner, R-Ohio, the minority leader, as he prepared to cast his vote for the most sweeping federal intervention in markets in decades.
Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.