Monday, 29 September 2008 20:14 UK

House votes down bail-out package

BBC News

 

The lower house of the US Congress has voted down a $700bn (£380bn) plan aimed at bailing out Wall Street.

The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.

About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.

 

Shares on Wall Street plunged within seconds of the announcement, after earlier falls on global markets.

A White House spokesman said that President George W Bush was "very disappointed" by the result.

He would meet members of his team in the coming days to "determine next steps", spokesman Tony Fratto said.

 

The vote followed a day of turmoil in the financial sector.

 

* Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities

* Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival

* The UK government announced it was nationalising the Bradford & Bingley bank

* Global shares fell sharply - France's key index lost 5%, Germany's main market dropped 4% while US shares also lost ground.

Blame game

 

So grave are the consequences of this decision, reports the BBC's Kevin Connolly from Washington, that the speaker of the house paused for several long minutes after the vote was taken before declaring it official.

 

The no vote plunged the world of Washington politics into turmoil and the markets into deep and instant chaos with rapid falls on Wall Street, our correspondent says.

 

Mr Bush had argued that the bail-out plan was a "bold" one which he was confident would restore strength and confidence to the US economy.

 

But after a several hours of impassioned debate, the bill's opponents - the majority of whom were from the Republican Party - got their way.

 

They had raised concerns about both the content of the plan and the speed with which they were being asked to pass it.

 

Some agreement on issues such as oversight, greater protection for taxpayers and curbs on executive bonuses had been reached in fraught weekend talks.

 

But these concessions ultimately failed to persuade enough lawmakers that the plan was in the best interests of the nation.

 

Speaking after the vote, Republican leaders in the House of Representatives suggested the Democrats were to blame, accusing them of failing to mobilise their majority in the chamber.

 

Democratic presidential candidate Barack Obama spoke shortly after the vote, saying it was an outrage that ordinary people were being asked to clean up Wall Street's mess.

 

"If I am president I will review the entire plan on the day I take office to make sure that it is working to save our economy and (that) you get your money back," he said.

 

He added that he expected the Congress to pass a bail-out bill in some form and called for calm, although he admitted the path could be a difficult one.

 

Frantic steps will now be taken to get some kind of amended version of the bill through Congress, our correspondent says.

 

But this vote would have shaken the confidence of the financial world and the ability of America's leaders to come up with convincing answers at a moment of crisis, our reporter adds.

 

Since the announcement at 18:30 Hours UK time the Dow Jones has plummeted 700 points (over 6%), thanks to the Republicans bloody mindedness. What do you think about all of this which will only help accelerate the Economic meltdown of the Western world?

How bloody selfish - yes, it's outrageous that the ordinary man should be expected to bail out the greed of the fat cats, but to be honest the consequences of failure will be even worse than if we don't all take our share of trying to stop this crisis - yet again, a brief taste of the sort of short-sightedness we'd doubtless see under a McCain-Palin leadership :rolleyes: Hoover proved last time around that you need a Democrat to get economic disasters back under control, so we'll all truly be f***ed if we trust the destiny of the world economy to the selfish Republicans...

I'm in two minds about this. On the one hand I think these greedy Banks should take the consequences, if they go bust then so be it. After the fall out only the leanest and financially prudent ones will survive. The people at the top are to blame for their reckless lending policies, so you reap what you sow.

 

But on the other hand, working in the finance industry I can appreciate the massive problems this would cause. Therefore my business head says the rescue package has to be approved, somehow, probably with more concessions. I would sack all Bank Boards, Directors,Top managers with no Golden payoffs. Replace them with new people, they can't possibly do worse than the present lot.

 

I think there are more casualties to come, some household names.

Since the announcement at 18:30 Hours UK time the Dow Jones has plummeted 700 points (over 6%), thanks to the Republicans bloody mindedness. What do you think about all of this which will only help accelerate the Economic meltdown of the Western world?

I don't think you have a clue!

Saying that it's 'Republicans bloody mindedness' when in fact the democrats have a large majority and don't require one single vote from anyone else immediately highlights the stupidity of the above statement.

 

The no vote on this bill was the best thing that could of happened to the US at this time. Wall street and the US government has to take responsibility for actions and dumping it's problems on the US tax payer is neither morally nor economically sensible.

All credit to Gordon Brown who this week put some of the burden of the Bradford and Bingley fallout back onto the banks. This is the action required in the US also.

 

 

 

 

 

I don't think you have a clue!

Saying that it's 'Republicans bloody mindedness' when in fact the democrats have a large majority and don't require one single vote from anyone else immediately highlights the stupidity of the above statement.

Erm, it all looked set to be voted for until a Democrat had a go at the Republicans in her speech and they then all decided to vote against!

Erm, it all looked set to be voted for until a Democrat had a go at the Republicans in her speech and they then all decided to vote against!

'They' being the democrats.

The so called 'house republicans' many of which voted against it have largely been against it from the beginning. Not that it matters, because the democrats have the majority anyway.

 

There is much politics in the mis-reporting in the media. It would advisable to read between the lines and not be taken in by it.

I don't think you have a clue!

Saying that it's 'Republicans bloody mindedness' when in fact the democrats have a large majority and don't require one single vote from anyone else immediately highlights the stupidity of the above statement.

 

The no vote on this bill was the best thing that could of happened to the US at this time. Wall street and the US government has to take responsibility for actions and dumping it's problems on the US tax payer is neither morally nor economically sensible.

All credit to Gordon Brown who this week put some of the burden of the Bradford and Bingley fallout back onto the banks. This is the action required in the US also.

 

Well lets see. Seeing that this is an an area of business I know something about.

 

But I don't need to go into too much detail because the Maths/facts are very straightforward that a 7 year old child would understand:

 

The rescue package was put together by President George W Bush = who is a Republican via his Treasury Secretary Henry Paulson who is also (you've guessed it a Republican) via discussions with all parties (Republicans & Democrats) to get a compromised package solution.

 

Now lets look at the votes breakdown:

 

By a vote of 228-to-205 the House of Representatives rejected a compromise plan (The Emergency Economic Stabilization Act of 2008) that would have allowed the Treasury Department to buy up toxic debt from struggling banks.

 

Now without going into the very detailed breakdown policies/implementations of this Act, most Finance/Political experts were worried that the bill might fail due to it being more politically palatable to right-wing Republican party than left-wing Democrat party, due to the Democrats having a majority in the house.

 

However the votes along political lines were:

 

Democrats voted 140 to 95 in favor of the legislation

Whilst Republicans voted 133 to 65 against it.

 

Therefore the vote really did go against all expectations, not that the Bill failed to be passed which was feared by the markets, but the reason for it failing to pass, because 60% of Democrats passed an Act arrived at by the ruling Republican party, 67% of Republicans voted against a bill set up by their own Government Administration!

 

Thanks to this House vote: The Dow Jones dropped over 777 points in a single day, its largest point drop ever. The loss, which wiped out approximately $1.2 trillion in market value, the first $1 trillion plus loss in Dow history.

 

The major reason given by Republicans within the House Of Representatives for voting against the bill put together by their own Government was due to a scathing speech by Democratic house speaker Mrs Pelosi about the Bush administration's economic policies for injecting partisanship into the issue, although it was the Bush administration whom in 2001/2 passed legislation (getting rid of legislation passed in the early 1930s to stop another Great Depressioon like the Worldwide one we had in 1929) giving the Finance sector greater freedom than ever to lend ever greater amounts of credit, and look what has now happened.

 

Still overnight the Democrats lead has edged up 6 points (to 9 %) due to the House Of Representatives Republicans behaviour yesterday.

I don't think you have a clue!

Saying that it's 'Republicans bloody mindedness' when in fact the democrats have a large majority and don't require one single vote from anyone else immediately highlights the stupidity of the above statement.

 

The no vote on this bill was the best thing that could of happened to the US at this time. Wall street and the US government has to take responsibility for actions and dumping it's problems on the US tax payer is neither morally nor economically sensible.

All credit to Gordon Brown who this week put some of the burden of the Bradford and Bingley fallout back onto the banks. This is the action required in the US also.

But the US taxpayer will pay anyway. Pension funds own huge numbers of shares in the banks. So, if a bank goes belly-up, pension funds lose out.

 

BTW, what do American taxpayers think about Henry Paulson? In his last 18 months at Goldman Sachs, he was paid roughly $60m. When he took the job as US Treasury Secretary, he had to sell his Goldman Sachs shares. They were worth $500m. The Bush administration agreed to waive Capital Gains Tax on those shres, thus saving Paulson $200m in tax. So the US taxpayer has paid him $200m to take on the job. Is there anyone who thinks that's a bargain?

It was a bargain for the Republicans, their cronies, and Mr. Paulson....not the average US taxpayer, like myself, who is utterly fed up with being screwed over royally, by both Republicans AND Democrats....almost makes me want to leave this 'wonderful land of opportunity'....since the opportunity apparently has gone for someone like me, who's lucky to make $40,000 USD a year....both parties are equally at fault here, imnsho....

 

I'm sick to death of picking up the tax slack for the uber rich....it's about time they have their arses taxed off, instead of mine.... :angry:

Well lets see. Seeing that this is an an area of business I know something about.

 

But I don't need to go into too much detail because the Maths/facts are very straightforward that a 7 year old child would understand:

Indeed.

US Congress has at present 433 members, so 217 yes votes are required to pass a bill.

Democrats have 235 reprsentatives, enough to pass to vote.

Only 141 democrats votes in favour of the bill. If only ten more democrats had voted yes the bill would of passed.

It's very clear that the democrats are playing politics as they could easily of passed the bill themselfs.

 

The major reason given by Republicans within the House Of Representatives for voting against the bill put together by their own Government was due to a scathing speech by Democratic house speaker Mrs Pelosi

Again being mislead by politics here. Mrs Pelosi recommmended the bailout in her speech and voted in favour of the bill.

What you are reporting is politics.

 

The republicans used Mrs Pelosi speech as an excuse.

Minutes later the democrats retaliated by use the republican vote as an excuse.

Both things where untrue, both sides are playing politics. An election is imminant after all.

 

 

It was a bargain for the Republicans, their cronies, and Mr. Paulson....not the average US taxpayer, like myself, who is utterly fed up with being screwed over royally, by both Republicans AND Democrats....almost makes me want to leave this 'wonderful land of opportunity'....since the opportunity apparently has gone for someone like me, who's lucky to make $40,000 USD a year....both parties are equally at fault here, imnsho....

 

I'm sick to death of picking up the tax slack for the uber rich....it's about time they have their arses taxed off, instead of mine.... :angry:

I think that's fairly typical american view. Why should you and the average american bail out the rich?

 

Congressman Chris Van Hollen, one of 95 mainly liberal Democrats who voted no (140 voted yes), said his office

had received 3,000 phone calls, 3,000 emails, with 100 people being against the bill for every one who was for it.

http://www.telegraph.co.uk/finance/finance...all-Street.html

 

But the US taxpayer will pay anyway. Pension funds own huge numbers of shares in the banks. So, if a bank goes belly-up, pension funds lose out.

That's a good point.

 

Do the US Tax payer wish to pay in governement debt or do they wish to pay(likley a smaller amount) via pension funds. I imagine the later is the preferred choice of most americans.

 

Here is an article by Jeffrey A. Miron is senior lecturer in economics at Harvard University

Bankruptcy, not bailout

Edited October 1, 200816 yr by Infinity 2008

Exactly - the average punter has nothing to do with this. Those who created the situation will need to fix it. If this means stripping them of all their assets then so be it. Live by the sword, die by it too.

I don't mind my taxes going torwards this...if it doesn't go to this they will just use it on something else of less importance!

The bailout bill is not going to help any ordinary American at all no matter what lies those who voted to approve it tell us. Not to mention some of the money is going to ACORN (which has committed voter fraud across the country) and to La Raza (Hispanic supremacists). Both of which have strong support for Democrats. If you don't believe me then do a google search.

 

Yeah, the government has our best interests at heart....

I've been away for a while (ISP problems, LOOOOONGGGGG story....), but have been following this story with equal measures of amusement and disgust.... I'm amused by all these scummy arch Capitalists and Fat Cats on both sides of the Atlantic now positively BEGGING for State Intervention and Nationalisation - why, isn't this actually SOCIALISM?????? ROFLMAO..... :lol: :lol: Never thought I'd ever agree with a Republican, but one Republican rebel actually put it well - "We cant have Capitalism on the way up and Socialism on the way down"... I'm a Socialist/Leftist by principle, I'd probably vehemently oppose this guy on everything he had to say, but there is truth in this statement which is undeniable... You either believe in state intervention or you don't, end of story...

 

My disgust comes in when I look at the 50 million+ Americans who are unable to get proper healthcare for their families because the HMO system is basically a bunch of scummy b/astards who'll do anything to wriggle out of paying for treatment, drugs, etc... How many of these gits who were proposing a bail out for fukkin' Wall Street and these irresponsible w/ankers who caused this mess in the first place were actually in favour of Bill and Hillary Clinton's vision of an NHS for the American people.....? :angry: Also, how many of these same people are actually in favour of funding College and University places for talented, smart kids from poor and disadvantaged backgrounds...? How many of them are in favour of PROPERLY funding inner city and ghetto schools and actually giving some hope to millions of kids from the poorest, roughest neigbourhoods in the US....? IMO, bail THEM out with 700 billion of taxpayers money, not the scum on Wall St who'll just do this sh!t again and again and again because now they'll know that they can do whatever they like, the Govt's gonna bail their asses out.... In short, these maggots learn NOTHING, they live in a bubble in which their actions seem to have no consequences whatsoever, they destroy peoples lives with their asset-stripping, dodgy deals and speculation, all in the name of their poxy "bonuses" let 'em fukkin drown in their own sh!te..... If I was an American, I'd be outraged today.... Wall St and the Republicans caused this mess with their catastrophically incompetent handling of the economy.... The 8 years of Clinton brought prosperity for the most part, the 8 years of Bush has brought nothing more than financial chaos, corruption at the highest levels and economic incompetence... George - "It's the economy, stupid....", as a man considerably more intelligent than you once said..... :rolleyes:

 

The "Credit Crunch", the horrendous, convoluted, badly thought-out "Patriot Act", and the illegal War in Iraq is the only 'legacy' of the Bush years that people are gonna remember... Not much to shout about really is it...?

The bailout bill is not going to help any ordinary American at all no matter what lies those who voted to approve it tell us. Not to mention some of the money is going to ACORN (which has committed voter fraud across the country) and to La Raza (Hispanic supremacists). Both of which have strong support for Democrats. If you don't believe me then do a google search.

 

Yeah, the government has our best interests at heart....

 

La Raza is not a hispanic supremacist organization in the least bit. That is total right-wing scare-mongering bull$h!t. ACORN has been involved in several instances of submitting fraudulent voter registrations, which is of course indefensible, but the organization (and La Raza) have been hugely involved in education and advocacy on issues such as affordable housing, fair lending, education reform and living wages. They are left-of-center organizations for obvious reasons, but they are also subject to a competitive bid process in order to receive any of the grants in the Housing Trust Fund. Know any right-wing community organizations in urban communities hardest hit by the housing bubble, predatory lending, the failure of education and the surge in poverty and crime?

 

What about the people that will manage all this money, the executives, Wall Street types that the government is now employing at newly subsidized financial institutions? They likely have strong support for Republicans. And don't get me started on the Republicans and voter fraud...

I've been away for a while (ISP problems, LOOOOONGGGGG story....),

I thought you'd been on holiday with Craig :lol:

I thought you'd been on holiday with Craig :lol:

 

EUUUUUURGGHHHHHHHHH :puke2: No Waaaaaaaayyyyyyyy dude...... :lol: :lol: I'd rather go on my hols with Rob and Clare tbh.... :lol: :lol: :P