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5 Reasons the House Passed the Bailout Bill
Tweet Share on Facebook October 3, 2008 Comment (49)It was only Monday that the House of Representatives tipped Washington into chaos by rejecting the $700 billion bailout package. Friday, the same legislative body reversed course and passed the controversial measure by a vote of 263 to 171, throwing its support behind the most sweeping intervention into the financial markets since the Great Depression. So what happened in this four-day period to change the bailout's fortunes so dramatically?
1. Stock Market Drop. While the credit crisis has taken out some of Wall Street's biggest players, it has yet to really hammer Main Street. Before Monday's vote, Americans could still consider the credit crisis a foreign problem—one that hurt fat cats on Wall Street but had no bearing on their own lives. But Monday's House vote changed all that by triggering a 777-point drop in the Dow—the largest such decline in history. With the value of 401(k)s evaporating, Main Street America suddenly had a tangible stake in getting the bailout bill passed.
"Over $1 trillion worth of market value was wiped off the books by the stock market drop,'' said Sen. Robert Bennett, a Utah Republican, Bloomberg reported. "It is ordinary people looking at ordinary pensions, with their ordinary Main Street kind of 401(k) plans, who lost that $1 trillion. And they lost it in a matter of minutes.''
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The Senate Bailout Bill: How They Voted
Tweet Share on Facebook October 2, 2008 Comment (21)The Senate on Wednesday voted 74-25 to pass the $700 billion financial bailout bill. Here's a look at how the senators voted:
From the Associated Press:
On this vote, a "yes" vote was a vote to approve the package and a "no" vote was a vote against it.
Voting "yes" were 39 Democrats, 34 Republicans and 1 independent.
Voting "no" were 9 Democrats, 15 Republicans and 1 independent.
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How Did the Bailout Bill Get So Long?
Tweet Share on Facebook October 2, 2008 Comment (10)While the centerpiece of the bailout package that the Senate passed Wednesday is still a measure allowing the government to buy up to $700 billion of souring securities, the bill has gotten a whole lot more expansive since its initial proposal. (The original bill was just three pages long, now it's up over 400.)
In addition to tacking on provisions that would boost the FDIC's deposit insurance limits and restate the SEC's authority to suspend a key accounting rule, the new legislation includes billions of dollars in tax breaks.
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Senate Passes the Bailout Bill
Tweet Share on Facebook October 2, 2008 Comment (7)The bailout bill safely passed the Senate on Wednesday by a vote of 74 to 25. The legislation now moves to the House, where it went down in a stunning defeat earlier this week.
Although the bailout legislation started out at just three pages, it's now more than 400. That's thanks to a slew of additions—such as raising the FDIC's deposit insurance cap and billions in tax breaks—designed to secure broader support.
But the core component of the legislation remains unchanged: $700 billion to buy up souring securities in an effort to unclog the credit markets.
