Senate Approves $700B Financial Bailout

Economic Rescue Legislation Passes 74-25; House Expected To Vote Friday; Support Growing

(CBS/AP)  After one spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, winning lopsided passage in the Senate and gaining ground in the House, where Republicans opposition softened.

Senators loaded the economic rescue bill with tax breaks and other sweeteners before passing it by a wide margin, 74-25, a month before the presidential and congressional elections.

In the House, leaders were working feverishly to convert enough opponents of the bill to push it through by Friday, just days after lawmakers there stunningly rejected an earlier version and sent markets plunging around the globe.

Bipartisan supporters rallied around a unity theme - a stark contrast to the political bickering that marked Monday's shocking House defeat, reports CBS News correspondent Bob Orr.

The measure didn't cause the same uproar in the Senate, where both parties' presidential candidates, Republican John McCain and Democrat Barack Obama, made rare appearances to cast "aye" votes, as did Obama's running mate, Sen. Joe Biden of Delaware.

In the final vote, 39 Democrats, 34 Republicans and independent Sen. Joe Lieberman of Connecticut voted "yes." Nine Democrats, 15 Republicans and independent Sen. Bernie Sanders of Vermont voted "no."

President Bush issued a statement praising the Senate's move. With the revisions, Mr. Bush said, "I believe members of both parties in the House can support this legislation. The American people expect and our economy demands that the House pass this good bill this week and send it to my desk."

The rescue package lets the government spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and prevent a deep recession.

Wall Street was down around 20 points during a relatively calm day of trading as investors awaited the Senate's decision.

Even as the Senate voted, House leaders were hunting for the 12 votes they would need to turn around Monday's 228-205 defeat. They were especially targeting the 133 Republicans who voted "no."

Their opposition appeared to be easing after the Senate added $110 billion in tax breaks for businesses and the middle class, plus a provision to raise, from $100,000 to $250,000, the cap on federal deposit insurance.

They were also cheering a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market..

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Read CBS poll on the economic bailout plan

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There were worries, though, that the tax breaks would cause some conservative-leaning "Blue Dog" Democrats who voted for the rescue Monday to abandon it. The bill doesn't designate a way to pay for many of the tax cuts, and Blue Dogs typically oppose any measure that swells the deficit.

"I'm concerned about that," said Rep. Steny Hoyer, D-Md., the majority leader.

Raising the deposit insurance limit - along with the SEC's accounting change - helped House Republicans claim credit for some substantive changes. And with constituent feedback changing dramatically since Monday's shocking House defeat and the corresponding market plunge, lawmakers' comfort level with the package increased markedly.

Rep. John Shadegg, R-Ariz., who voted "no" on Monday, said he was leaning toward switching, and Rep. Steve LaTourette,R-Ohio, said he was "getting there." Several others were weighing a flip, said Republican officials who spoke on condition of anonymity because the lawmakers had not yet announced how they would vote.

Leaders in both parties, as well as private economic chiefs everywhere, said Congress must quickly approve some version of the bailout measure to start loans flowing and stave off a potential national economic disaster.

"This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe," Obama said on the Senate floor. In Missouri, before flying to Washington to vote, McCain said, "If we fail to act, the gears of our economy will grind to a halt."

Critics on the right and left assailed the rescue plan, which has been panned by their constituents as a giveaway for Wall Street, and has little obvious direct benefit for ordinary Americans.

Sen. Jim DeMint, R-S.C., a leading conservative, said the step was "leading us into the pit of socialism."

Sanders, a self-described socialist, said the rescue was fundamentally unfair.

"The masters of the universe, those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse," Sanders said, and are demanding that the middle class "pick up the pieces that they broke."

Still, proponents argued that the financial sector's woes were already being felt by ordinary people in the form of unaffordable credit and underperforming retirement savings and without the bailout would soon translate into even more economic pain for working Americans, including more job losses.

"There will be no balloons or bunting or parades," when the rescue becomes law, said Sen. Chris Dodd, D-Conn., the Banking Committee chairman. But lawmakers will have "the knowledge that at one of our nation's moments of maximum economic peril, we acted - not for the benefit of a particular few, but for all Americans."

Sen. Judd Gregg, R-N.H., said the intense, at times contentious, 11-day round of bipartisan talks to craft the bailout - which followed dire warnings of impending economic meltdown from Bush's economic chiefs to congressional leaders - was an "extraordinary experience."

"This is the way government's supposed to work, folks, and it did," Gregg said.

The Senate specializes in high-stakes legislating by enticement, and the long list of sweeteners it added was designed to attract votes from various constituencies.

In addition to extending several tax breaks popular with businesses, the bill would keep the alternative minimum tax from hitting 20 million middle-income Americans and provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.

Tax cuts new and old are favorites for most House Republicans. Help for rural schools was aimed mainly at lawmakers in the West, while disaster aid was a top priority for lawmakers from across the Midwest and South.

Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others.

Increasing the deposit insurance cap was a bid to reassure individuals and small businesses that their money would be safe if their banks collapsed. It was particularly geared toward small banks that fear customers will pull their money and park it in larger institutions seen as less likely to fold.

The FDIC would be allowed to borrow unlimited money from the Treasury Department through the end of next year as a way to cover the increased insurance limit. If used, it would be the first time the agency has tapped Treasury for a loan since the early 1990s.

The rescue bill hitched a ride on a popular measure that gives people with mental illness better health insurance coverage. Before passing it, senators voted by an identical 74-25 margin to attach the massive bailout and the tax breaks.

[republic1776]

I am voting my Senators out!

[whitemale08]

THE SENATE HAS BETRAYED US!!!!!

THE SENATE HAS BETRAYED THE UNITED STATES IN AMERICA!!!!

THIS BILL WILL DESTROY OUR NATION BY HYPERINFLATION WORSE THEN ZIMBABWE!!!!!1

WE WILL BE PLUNGED INTO A NEW DARK AGE BECAUSE OF THIS BILL!!!!!!!!!

NO BAILOUTS MEAN ABSOLUTELY NO BAILOUTS!!!!!!!!!!

AGGGGGGHHHHHHHHHHHH!!!!!!!!!!!!

[adfolder]

"Only fools fight in a burning house" Klingon Commander Cain, original Star Trek series.

[easeup-2009]

Posted by whitemale08 at 09:32 PM : Oct 01, 2008

Get a grip.

[whitemale08]

EVERY SENATOR INCLUDING MCCAIN AND OBAMA AND HILLARY CLINTON HAVE BETRAYED US!!!!!!

THEY ARE TOO SCARED OF GEORGE W. BUSH!!!!!!!

THEY ARE TOO AFRAID OF WALL STREET!!!!!

NOW WE WILL DIE BECAUSE OF THEIR BETRAYAL!!!!!!!

[marshall_nee]

Bastardos!

[treehgr07]

I see a point of order is needed here. These are not earmarks. Staplesla, contrary to your statements, these are amendments to existing laws. It is often the case while passing legislation, that amendments that clean up prior laws are inserted into a new bill. An earmark by definition is an budget expenditure that provides for the benefit for one state. Not all earmarks are bad though because many are needed - think about the Katrina recovery efforts. A bad earmark has all the hallmarks of regular earmarks but it is not debated.

[republic1776]

Osama, did stike the Capitol of America, Wall $treet.
Too bad America just found out who really runs this Country.

[bailmeout1]

Find out the names of each of those 74 that voted for this and vote them out next time they run. Meanwhile I guess now since the country is no longer in "danger" we can begin criminal investegations!

[nrshine1]

We are a capitalistic society and should not be socialized for the interest of the rich or people in power. NO direct support from the government should be given to the financial markets or any private organization for bailout purposes. The American people do not want to purchase non-performing paper. The government should not own interest in any corporation and this should be illegal (goes against capitalism). If the government wants to bailout anyone it should be the 50 states of America (the federal government%u2019s primary responsibility) that will be affected by large revenue losses due to this financial crisis. A crisis that was created by the deregulation of banks and the financial markets.

You don%u2019t%u2019 even know if the bailout will work. It is better not to take action then to take the wrong action that could do more damage. I will not transfer a $700 billion debt to my children and my children%u2019s children because of greedy bakers and politicians. The press says it is necessary to prevent property values from plummeting %u2013 give the states aid to offset their financial losses due to lower property values (another answer).

There are many other alternatives for the bailout and our leaders need to explore them all. We want justice %u2013 we want the leaders (boar members, presidents, managers, shareholders) that profited from these financial activities to lose their wealth. Their wealth should be used to bailout the financial markets.

[nrshine1]

There are many other alternatives for the bailout and our leaders need to explore them all. We want justice %u2013 we want the leaders (boar members, presidents, managers, shareholders) that profited from these financial activities to lose their wealth. Their wealth should be used to bailout the financial markets.

I urge every American to contact their senators and congressional leaders via email or a written letter to express how you would like them to vote with respect to this $700 billion bailout. Let your senators and congressional leaders know that how they vote is directly attached to your vote when they are up for reflection.

[incog-nito]

Let''s see: The American people objected to the first bill, so instead of listening to the American people, they added MORE money to it and PASSED it. Incredible.

[bailmeout1]

How can they possibly promise 100 billion in tax reductions while voting on a 700 billion bailout without printing up more money and driving inflation up. Good luck with $12 a gallon at the pump, which they will blame on others. Congress, WE WILL NOT FORGET!!!!

[scorpio59er]

Talk about putting lipstick on a pig!

[cdfoxtrot3]

So... American people, you don''t like the Wall Street bailout for $700 billion, because of the price tag? Okay, how about this one for $850 billion? Any takers?? If you don''t like this one, we''ll be back with one for a trillion dollars.

[anniepace]

It is time to clean the house and the senate. Obviously the government no longer reflects the will of the people.

[cdfoxtrot3]

If these "bad mortgage-related securities and other devalued assets " are backed by real property,in the long run, this will be a good deal. If, however, they are derivatives that only exist on paper then we are screwed...we might as well buy up old Confederate debt.

Posted by chimneyfish

Either way, we the people are screwed. The same Wall Street a$$holes who helped cause this will be back in a month or two to buy back these assets at pennies on the dollar. We have just gifted them their multi-billion dollar bonus money for 2008 and then some.

[bailmeout1]

McCain wimped out and has lost my vote. I will go with Obama just as a thank you to all the Democrats for not giving us Hillery. Thanks Dems!

[scallywag8]

I agree. They all need to go. Is time for an overhaul and I mean a serious one. Lets take our country back!

[cdfoxtrot3]

Talk about putting lipstick on a pig!

Posted by scorpio59er

What''s this got to do with Sarah Palin?

[bailmeout1]

If these "bad mortgage-related securities and other devalued assets " are backed by real property,in the long run, this will be a good deal. If, however, they are derivatives that only exist on paper then we are screwed...we might as well buy up old Confederate debt.

Posted by chimneyfish

These properties are in China. Good Luck!

[scorpio59er]

Talk about putting lipstick on a pig!

[easeup-2009]

What''s funny is that the only people against this bill are wingnuts on both sides--and CBS message board loons.

Normal people can''t disagree with this.

[bailmeout1]

Normal people can''''t disagree with this.
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Posted by easeup at 09:59 PM : Oct 01, 2008

Other than being told this is a good thing - do you have any reasoning on that statement?

[incog-nito]

easeup: I guess it means then that most Americans are extremists, since every single poll taken on this shows that the vast majority oppose this bill.

[bm6005]

Vote out ALL incumbents in November!!!! Why do you think it''s called CONgress?

[bailmeout1]

From what I can see, most posts are from honest hard working intellegent Americans and we are firmly (big time) against this. We are all wrong? And these known crooks and liars are right? We are the silent majority and we have been forced to wake up. Do you thing I am happy to know that our entire government is crooked? I am not. I am embarrassed! This is no longer about Democrats and Republicans, people are entitled to their views. This is about us needing to take back our government!

[staplesla]

Here is the list of how congressmen in the House previously voted. http://clerk.house.gov/evs/2008/roll674.xml.

Contact those that voted no and make sure they don''t change their votes. Call them at [phone], and send an email through either of these sites. www.votenobailout.org or www.visi.com/juan/congress

[ubrew12]

White-Marsh said: "IS IT ME, OR DOES IT APPEAR PALIN BECOMES DEFENSIVE OVER THE MOST INNOCENT MATTERS? COURIC ASK PALIN ABOUT THINGS SHE READ, AND PALIN ACT LIKE COURIC IS TRYING TO PUT HER AND THE PEOPLE OF ALASKA DOWN??"

Its definitely not you. Couric just asked her to identify Supreme Court decisions OTHER than RoeVWade that she disagreed with...

and Palin got that blank, deer in the headlights, look, and proceeded to stutter over the ''many others like RoeVWade'' that she just couldn''t think of at that moment.

Truly, one of the saddest moments in election history.

This is what Rove politics has brought to America. Candidates for the most powerful office in the land who have the right bearing, the right ''aw shucks down-home'' attitude, the right ''rightness'', (and, lest we forget, the right color), but with air in the head that can be filled with whatever the neocons (like Cheney) put there. I don''t blame Palin for being there. I blame McCain, and a Republican machine that consistently places ''Entertainment tonight'' qualities before Presidential qualities.

We the voters deserve better. I like Palin: but on a Presidential level, comparing her to Biden is like comparing hamburger to steak.

Condi Rice would have given Biden a run for his money. As it is, tomorrow nights ''debate'' seems a little unfair...

[easeup-2009]

Other than being told this is a good thing - do you have any reasoning on that statement?

Posted by bailmeout1 at 10:01 PM : Oct 01, 2008

If any of you drama queens worked for a manufacturing company, who saw your bank''s stock drop 50% & wonder if you''re going to get the necessary credit to keep your doors open for another week, you would understand. I''d be willing to bet that the vast majority of posters against this have never held a job that didn''t require a name tag. They just see Bush''s name & launch their childish temper tantrum.

Bottom line--credit drives the economy.

[easeup-2009]

Listen up you arrogant cretin. Many people agree with the bailout but not fundamentally. Fundamentally it grows out of deeply entrenched capitalist corruption that is threatening democracy.

Posted by wjksea at 10:02 PM : Oct 01, 2008

You don''t like capitalism? Then MOVE!

[incog-nito]

You don''''t like capitalism? Then MOVE!

Posted by easeup at 10:10 PM : Oct 01, 2008

This bailout bill is as far from capitalism as you can get.

[bailmeout1]

If any of you drama queens worked for a manufacturing company, who saw your bank''''s stock drop 50% & wonder if you''''re going to get the necessary credit to keep your doors open for another week, you would understand. I''''d be willing to bet that the vast majority of posters against this have never held a job that didn''''t require a name tag. They just see Bush''''s name & launch their childish temper tantrum.

And you think this bailout will increase your stock back to where it is? It will not. You company has identified itself as hinging day to day. That is a shame, and I feel bad for you. You will lose your job, bailout or no bailout. I own my own company and nothing has changed in my situation. And my bank that lends me money still has no problems. And I do not borrow money to make payroll!

[dj282008]

You don''''t like capitalism? Then MOVE!

So basically what your saying is that because they screwed up, we have to pay for it. Let me ask you this, IF I have to pay for this I want every Congressional Leader to go back to minimum wage until we get our money. These members make well more than enough to support the bill. But they won''t pay for this we will. So while it hurts our pocket books, they continue to sit smoothly in thier million dollar homes and have food on thier table. Maybe you want to go back to that life style.

[fedup389]

No bailouts No handouts No giveaways No freeebies

You signed on the dotted line for a mortgage you didn''t understand.
You can have my sympathy but not my life savings.

You overpaid for your McMansion and now you can''t re-finance.
You can have my sympathy but can''t have my kid''s life savings.

You bought everything on credit and your charge card rate just shot up to 18%.
You can have my sympathy but can''t have my grand-kid''s life savings.

You bought a bunch of rundown houses to flip but the market tanked.
You can have my sympathy but can''t have my great-grand-kid''s life savings.

You busted your rear raising a family; taking on only necesary debt i.e. mortgages and car loans you could afford. You got sick / injured / laid-off and are in financial trouble.
You have my sympathy and our government needs to help YOU!

Let the Wizards of Wall Street fend for themselves!


http://throwallthebumsout.org/?p=105

[summarex]

UNEMPLOYMENT BENEFITS rather

*** = bastarsz

[scallywag8]

So why do these companies need credit. That''s the problem with this economy. No one wants to pay cash and build their empires themselves. They borrow and borrow and borrow way above their means and when they go belly up the government (US!) bails them out so they can do it again.

[bailmeout1]

Call your banks and ask the bank managers! Local banks are not in any trouble at all. It is the major, world wide banks that are in trouble. The same ones that now want us to pay for mortgages ion China!

[rcsully65]

I promised I would not cast a vote for anyone who voted yes for this. Well after tonight my vote goes to Ron Paul. We sell our souls day after day for their greed and now we have to pay our cash for it. No more no how no vote.. Hello Ron Paul

[summarex]

To fedup389

I think there are more of us now who are fed up with human cockroaches like you. We should stamp you out but not before we dice and slice your idiiot kid and feed him to you, you.

[easeup-2009]

So why do these companies need credit. That''''s the problem with this economy. No one wants to pay cash and build their empires themselves. They borrow and borrow and borrow way above their means and when they go belly up the government (US!) bails them out so they can do it again.

Posted by scallywag8 at 10:19 PM : Oct 01, 2008

Let''s say you own a widget factory. The widgets you make need material. Let''s say your material supplier invoices 30 days after shipment & your customers'' payment terms are net 90 days. To make it worse, let''s say your customers only need those widgets 9 months out of the year, yet you have to meet payroll, utilities, insurance every month.

Believe me, EVERY manufacturer needs credit.

[bailmeout1]

Frig Ron Paul too. This has to be a message to Democrats and Republicans. Go with Bob Barr.

[inventagod2]

Ka-Ching!

Senators with RNC cash in their pockets say Job Well Done!

Hmmm, did the BANK$ have anything to do with the passage of the ''Bailout''?

[txgrouch2006]

NO manufacturing company is liquid enough to handle payables, receivables, payroll, insurance, etc. without credit.
Posted by easeup at 10:16 PM : Oct 01, 2008

Any company that WAS that liquid got greenmailed and liquidated for the cash.

[easeup-2009]

After this bailout, if we the people have any voice left. We must take this country back from private corporate tyrants.

Posted by wjksea at 10:26 PM : Oct 01, 2008

OK I agree--now we''re getting somewhere. I''m sorry--I woke up yesterday morning & saw my company''s bank''s stock drop 63% in ONE day! I got a little puckered, shall we say.....

[bailmeout1]

Let''''s say you own a widget factory. The widgets you make need material. Let''''s say your material supplier invoices 30 days after shipment & your customers'''' payment terms are net 90 days. To make it worse, let''''s say your customers only need those widgets 9 months out of the year, yet you have to meet payroll, utilities, insurance every month.
Believe me, EVERY manufacturer needs credit.
--------------------------------------------------------------------------------
Posted by easeup at 10:26 PM : Oct 01, 2008

There''s Bull$hit for you! Your company has zero disposable cash? Does your company make any profits at all? Or just meal to meal? I have liquid assets plenty to cover emergencies. And none of my employees will lose their jobs. Need an application?

[easeup-2009]

Ka-Ching!

Senators with RNC cash in their pockets say Job Well Done!

Hmmm, did the BANK$ have anything to do with the passage of the ''''Bailout''''?

Posted by Inventagod2 at 10:28 PM : Oct 01, 2008

Obama has RNC cash in his pocket? Pelosi too?

Now THAT would be a scandal!

[easeup-2009]

There''''s Bull$hit for you! Your company has zero disposable cash? Does your company make any profits at all? Or just meal to meal? I have liquid assets plenty to cover emergencies. And none of my employees will lose their jobs. Need an application?

Posted by bailmeout1 at 10:30 PM : Oct 01, 2008

Not THAT kind of cash. Our product is about 80% material & 20% labor. It takes credit to get material into the door. I''m guessing your company isn''t manufacturing anything.

[dj282008]

I will have to vote for McCain to keep the democrats from having full control.

Sorry McCain and Obama both need to go!!

[cdfoxtrot3]

I will have to vote for Obama to keep the Republicans from racking up trillions more in debt over the next four years.