September 29, 2008

Financial Bailout DEFEATED in House

Marc Comtois

It just went down (ROLL CALL here. Both RI Reps voted YEA).

The House has defeated the $700 billion bail-out legislation for the financial industry.

More than enough members of the House had cast votes to defeat the Bush administration-pushed bill, but the vote was held open for a while, apparently as efforts were under way to persuade people to change their vote.

On Wall Street, stocks plummeted as investors followed the developments in Congress.


When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.

Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home.

The overriding question for congressional leaders was what to do next. Congress has been trying to adjourn so that its members can go out and campaign. And with only five weeks left until Election Day, there was no clear indication of whether the leadership would keep them in Washington. Leaders were huddling after the vote to figure out their next steps.

Monday's mind-numbing vote had been preceded by unusually aggressive White House lobbying, and spokesman Tony Fratto said that Bush had used a "call list" of people he wanted to persuade to vote yes as late as just a short time before the vote.

Lawmakers shouted news of the plummeting Dow Jones average as lawmakers crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for roughly 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.

They found only two.

Bush and his economic advisers, as well as congressional leaders in both parties had argued the plan was vital to insulating ordinary Americans from the effects of Wall Street's bad bets. The version that was up for vote Monday was the product of marathon closed-door negotiations on Capitol Hill over the weekend.

"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it - not me.' "

UPDATE: After days of bi-partisan work, it appears Speaker Pelosi ticked some GOPers off with an 11th hour, highly-partisan speech on the floor of the House:

Opponents said part of the reason for the opposition from Republicans was what they termed a partisan speech by House Speaker Nancy Pelosi, said one GOP source.

"Pelosi's partisan speech has caused our members to go berserk and may cost us any remaining chance to pass the bill," the source said.

Pelosi had said that Congress needed to pass the bill, even though it was an outgrowth of the "failed economic policies" of the last eight years.

"When was the last time someone asked you for $700 billion?" she asked. "It is a number that is staggering, but tells us only the costs of the Bush administration's failed economic policies — policies built on budgetary recklessness, on an anything goes mentality, with no regulation, no supervision, and no discipline in the system." {emphasis added}

Yeah, that's bipartisanship. And she left around 90 Democratic votes on the floor. Nice example of leadership, Madame Speaker.

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"howls of protest from their constituents back home."

Yup, the Capital switchboard has been jammed all day Friday and today.

Thanks to Speaker Pelosi for accomplishing what we wanted but couldn't communicate to our delegation.

Posted by: Monique at September 29, 2008 5:17 PM

How they voted can be found at the following link:

Posted by: Ken at September 29, 2008 5:21 PM

How much do you think funding for ACORN and LARAZA housing programs had to do with this defeat? I'm sure it influenced them greatly , mostly from a bipartisan standpoint . I'd like to believe that they are finally seeing the light . How can they BAIL OUT our ENEMIES ?

Posted by: leprechaun at September 29, 2008 5:39 PM

The 777 point stock market drop today was almost worth Nancy Pelosi, Barney Frank, and pals being forced to eat crow on TV today.

The Dems control the House and Senate, so if they really think this is such a great bill for the American people, they could pass it all by themselves. With power goes responsibility, and right now, Democrats have the power in Congress. Of course, if it's as bad a bailout bill as we all believe it is, then the Democrats are just acting like politicians and seeking political cover, not solutions.

Posted by: Will at September 29, 2008 6:00 PM

Barney Frank (and his fellow Democrats) really really wanted this to pass to get out of the news cycle the whole Fannie / Freddie SUBprime debacle (for which he is was a PRIME player).

{Rest of comment removed. RR, I know you like to try to be funny, but try showing a little class now and then, please. - Marc}

Posted by: Ragin' Rhode Islander at September 29, 2008 6:35 PM

What type of incompetent moron would bring this bill to the floor without having the votes in hand?!?!?!

40% of Democrats and 2/3 of Republicans voted against the bailout. Pelosi's commnents didn't sink this bill. Her failure to address the concerns of her fellow Democrats and 2/3 of House Republicans caused it to fail.

My bet is that a more taxpayer-friendly bill gets passed by Friday.

Posted by: Anthony at September 29, 2008 9:17 PM

To use a baseball adage: Sometimes the best trades are the one that are never made.

I was wary of the bailout bill myself. Now I'm hoping that a more creative package emerges; perhaps one that increases the FDIC insurance cap, thereby spreading some of the risk between Wall Street investors and Main Street?

Posted by: ditto at September 29, 2008 10:00 PM

The failure of anyone on AR (including the blog staff) to comment on their irrational bigotry of "ragin rhode islander's" comments (irrational because it has NOTHING to do with the merits of the issue) reflects very badly on the credibility of this blog.

PS to "ragin": I'd be happy to discuss this with you directly, but only if you'll do so under a real name. My guess is that you won't, for obvious reasons.

{Thomas, I agree that RRs comments were tasteless, but I've also grown tired of attempts to imply that non-comment by the AR "staff" on anything posted in our comments section implies consent. Please read the blurb at the top of our comments window for a refresher. By now, most blog frequenters recognize the distinction between contributors and commenters. - Marc}

Posted by: Thomas Schmeling at September 29, 2008 11:29 PM

A word of advice: when people make irrational comments, they're generally not the type of people with whom you can have a rational discussion.

Posted by: Anthony at September 30, 2008 12:02 AM


I agree. I'd just like to think that the rest of us interested in serious conversation will let them know that we regard their comments as irrational, and unwelcome. That's why my comment was really not directed to "ragin'.

Posted by: Thomas Schmeling at September 30, 2008 12:07 AM

Get used to it Thomas Schmeling. Most of the posts in this blog are simply assertions with no proof behind them.

Would anyone care to talk about the sad state of the Republican Party leadership when the ostensible head of the party, W, asks for the bill, and McCain, the would be head of the party, urges its passage and 60% of the rank and file vote against both of them? Looks like the lame leading the lame in this one.

There is a crisis. The banking system is undercapitalized, the credit markets are frozen, and foreign creditors are beginning to slow their purchases of US debt.

Let's hope that the Democrats take Rep. Kucinich's advise:

The $700 bailout bill is being driven by fear not fact. This is too much money, in too short of time, going to too few people, while too many questions remain unanswered. Why aren't we having hearings...Why aren't we considering any other alternatives other than giving $700 billion to Wall Street? Why aren't we passing new laws to stop the speculation which triggered this? Why aren't we putting up new regulatory structures to protect the investors? Why aren't we directly helping homeowners with their debt burdens? Why aren't we helping American families faced with bankruptcy? Isn't time for fundamental change to our debt-based monetary system so we can free ourselves from the manipulation of the Federal Reserve and the banks? Is this the US Congress or the Board of Directors of Goldman Sachs?
Let's put the cards on the table and really duke it out by having the Democrats rewrite the bill with Kucinich's aims in mind and let's go to the mat with it.

Posted by: OldTimeLefty at September 30, 2008 12:10 AM

"What type of incompetent moron would bring this bill to the floor without having the votes in hand?!?!?!"

The answer is: someone who wasn't overly concerned if the bill passed the first time around. Of course, Bela Pelosi could also just be a moron. I'm going with door #2.

"Would anyone care to talk about the sad state of the Republican Party leadership when the ostensible head of the party, W, asks for the bill, and McCain, the would be head of the party, urges its passage and 60% of the rank and file vote against both of them? Looks like the lame leading the lame in this one."

W is a lame duck with very little political quack left. "Lameduckedness" is a non-partisan phenomenon. That has nothing to do with whether we like him or not; it's just a statement of fact. By the way, it's a month before an election. Politicians always look out for #1.

A lot of Republicans -- I might even say most of them -- have serious issues with the Bush Administration's penchant for seeing "big government" as the solution to problems, instead of what Ronald Reagan believed, which is that big government is often the cause of the problem.

Our current economic situation, which has its roots in the housing crisis, can be traced directly to government involvement in manipulating the free market, with the laudable intent of making home ownership more affordable to more people. Unfortunately, the way they did that was by greatly loosening lending requirements by knowingly writing questionable loans (and then quickly dumping them with Fannie and Freddie) to people knowing they couldn't pay them back in the long run, with the "guarantee" that the asset backing the loans would always exceed the loan itself, or that the US government would itself guarantee those "no risk" loans. Too many thought the housing bubble would never burst, because they assumed demand would always exceed supply.

That market manipulation began with Jimmy Carter, was greatly expanded under Bill Clinton, and the chickens have finally come home to roost under President Bush.

Posted by: Will at September 30, 2008 1:54 AM

Speaking of irrational, Barney Frank is now saying that this bill was killed by Republicans.

90+ dissenting Dems. Thanks, Barn, but I don't think the Repubs could have done it without you guys.

Posted by: Monique at September 30, 2008 8:35 AM

As somebody suggested on TV last night, this sounds like a case of everybody saying, "My constituents don't want a bailout, so I can vote to please them, but hey, it's going through anyway, like it should."
At this point, maybe both parties should abandon trying to discipline their members and make this vote every rep for himself or herself. Take the partisanship out of it.

Posted by: rhody at September 30, 2008 11:21 AM

Au contraire, the comments re: "Barney" are most relevant.

Similar to his colleague Gary Studds and his adventures in homosexual babysitting with Congressional pages, Barney got a free pass on operating a homosexual brothel from his Georgetown townhouse. You really don't believe that he had no idea that this was occurring in his home, now do you?

Barney got a free pass because he's on the "right side" of the media bias because he's way out there liberal.

More importantly, with "progressives" homosexuality is "first among equals" with "oppressed minorities" because progressives get a twofer, since the practice of homosexuality is at odds with the Judeo-Christian tradition and because progressives can get their (perceived) non-biased bona fides by associating with fashionable homosexuals instead of having to rub elbows with the poor, uneducated day-laborer types that comprise the other "minority" groups.

So progressives always give homosexual related conduct and its practitioners a special pass - hence Studds, Frank and "pedophile priests" who went after children of their own sex, but whose conduct the progressive media spun as being caused by their inability to enter into heterosexual marriage!

Now Barney, who the record shows was one of the architects of this subprime crisis and protector of Fannie / Freddie, has the chutzpah to go up and proclaim that he is shocked, shocked and blame the whole mess on the private sector and "Wall Street" and Republicans.

So he must be hoping that there is a chance that those same dynamics will also give him a pass this time; that the sympathetic media won't dig so deep into his Fannie / Freddie closet, so to speak and won't call him on his rampant hypocrisy and misrepresentations, and that he and his fellow Democrats can get a bailout enacted and get this off of the radar before ...

Only this time, there are Congressional Records and YouTube videos and CSPAN videos showing him in action. If this matter continues on the front pages, these will gain traction and wider distribution, perhaps enough that even the progressive media will be forced to cover it.

Barney knows this; unlike the days when Barney the was red-lighting in the shadows, now he's under the klieg lights.. {rest of comment removed.-- It's pretty simple RR, while most of the above might be relevant--or open for debate-- the coup de grace to which you've returned, again, is uncalled for. And, to be factually correct, it was Franks' boyfriend, not Franks, who ran the establishment to which you refer, hence the smaller edit. The nom de guerre is cute and all, but don't be needlessly confrontational over something like this. Strike 2. - Marc}

Posted by: Ragin' Rhode Islander at September 30, 2008 11:27 AM

-rest of comment removed.-- It's pretty simple RR, while most of the above might be relevant--or open for debate-- the coup de grace to which you've returned, again, is uncalled for. And, to be factually correct, it was Franks' boyfriend, not Franks, who ran the establishment to which you refer, hence the smaller edit. The nom de guerre is cute and all, but don't be needlessly confrontational over something like this. Strike 2. - Marc

Fair enough. I didn't need to go there, and shouldn't have.

I'm just upset at watching what should be a major Democrat scandal be spun into an expansion of the very things that created the problem in the first place, and the media playing along. This doesn't excuse my foray into the gutter with cheap shots, however.

Though for the record, my comment(s) were in knowledge of Frank's "boyfriend" being the official operator of the brothel, but (again) it is simply not credible that Frank knew nothing of this occurring in his home, from which he'd leave in the morning, return in the evening, and presumably from time to time returned during working hours to take an afternoon off, to pick something up before flying back to Massachusetts, etc.

The press was entirely too willing to accept his denial of knowledge, a "courtesy" that would never have been extended to a conservative Republican had his female significant other been running a heterosexual brothel out of the house.

Posted by: Ragin' Rhode Islander at September 30, 2008 1:38 PM

Time for a Special Prosecutor to investigate Fannie Mae / Freddie Mac.

No doubt he or she will pull some Republicans in with the net, but only intermingled with whole schools of Democrats.

Chris Dodd. Barney Frank. Rahm Emanuel. What did they know, and when did they know it?

Posted by: Tom W at September 30, 2008 4:33 PM

Kucinich makes some great points. My only concern in letting the Decocrats write the bill is the obscene amount of Pork that would be in it. Patrick Kennedy was salivating over the possibility of porking up the first rejected bill. That being the one that didn't even get a vote.

Posted by: bobc at September 30, 2008 9:45 PM
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