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House Passes Bailout, Bill is Now Law

October 3, 2008 - by Donny Shaw

After failing on Monday, the House officially passed the bailout bill on Friday, 263-171.

House Democrats voted 172 to 63 in favor of the plan. Republicans voted 91 to 108 against. Full roll call details can be seen here.

Pictured at right is House Speaker Nancy Pelosi (D-CA) signing off on the bill. It will now be sent to President Bush who is expected to sign it into law as soon as this afternoon.

The bill will allow the government to use up to $700 billion in taxpayer money to buy troubled assets from struggling financial institutions. It also contains a mechanism for the government to recoup some of the money it spends on assets, puts some limits on the salaries of CEO at companies the government bails out, raises the federal deposit insurance limit, and extends a wide range of unrelated tax breaks.

The bailout bill has had a contentious journey from its inception to its final congressional approval this afternoon. On September 19, Treasury Secretary Henry Paulson submitted a 3-page proposal that would have given him broad authority to buy up troubled assets without any oversight or plan to recoup taxpayer money. That plan was immediately opposed by members of Congress from both sides of the aisle and quickly became mocked as “the Authorization for the Use of Financial Force.”

Democratic Leaders in the House then quickly proposed an alternative that eventually formed the basis of the bipartisan compromise that was rejected by the House on Monday.

While Congress was busy negotiating a bailout, the public was growing more and more angry about the government risking their tax dollars to rescue irresponsible companies on Wall Street. On Monday when the House was scheduled to vote, constituents called and emailed their members of Congress to express their opposition in record numbers. Capitol Hill phone lines were a perpetual busy signal and the House’s official “contact your Rep.” tool crashed, giving only an error message.

After the House’s monumental failure on Monday, Senate negotiators took over. With the help of presidential candidates Barack Obama (D-IL) and John McCain (R-AZ), the Senate added several provisions and created a new bailout billFDIC increase, alternative minimum tax patch, mental health parity legislation, etc – and brought their revised bill to easy passage in the Senate on Wednesday night. Although the bill had grown from 3-451 pages at this point, the fundamental core of the bill – authorizing $700 billion to bailout Wall Street – remained largely the same as it was in the original Paulson plan.

Between Monday and Friday, many things shifted, leading eventually to the bill’s passage in the House today. The Dow frightened the country by crashing 777 points (or $1.2 trillion in wealth) after the House rejected the bill on Monday . The Senate put the House in a tough spot, forcing them to either pass the bill or undo all the progress they had made. By many measurements, the public’s opposition to the bailout lessened throughout the week. And finally, the bailout has been loaded up with unrelated tax breaks designed to win key votes from Representatives who voted against the bill on Monday.

The bill had been “pre-enrolled,” which means that it is already on parchment paper and will be sent to President Bush for his signature immediately. We’ll update as soon as we receive word that the bill’s been signed into law.

UPDATE: A CNN breaking news headline reports that President Bush has officially signed the bailout bill into law. Quick Update: Here’s the article.

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