Historic Financial Rescue Bill Approved
With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush who quickly signed it.
"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the vote, although he conceded, "our economy continues to face serious challenges."
Underscoring that somber warning, the Dow Jones industrials, up more than 200 points at the time of the House vote, ended the day down 157.
The final vote, 263-171 in the House, capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act. There were 58 more votes for the measure than an earlier version that failed on Monday.
"We all know that we are in the midst of a financial crisis," House Republican leader John Boehner of Ohio said shortly before casting his vote for a massive government intervention in private capital markets that was unthinkable only a month ago.
"And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen," he said.
House Speaker Nancy Pelosi, D-Calif., said the bill was needed to "begin to shape the financial stability of our country and the economic security of our people."
Treasury Secretary Henry Paulson pledged to begin using his new authority quickly, and Federal Reserve Chairman Ben Bernanke said the central bank would work closely with the administration.
Wall Street welcomed the action, but investors also were buffeted by a bad report on the job market. The Labor Department said employers slashed 159,000 jobs in September, the largest cut in five years and further evidence of a sinking economy.
"The consensus of economists that I've talked to are saying we are now at the beginning of what is probably going to be a deep recession for the next six months," said CBS News correspondent Anthony Mason. "This bill had to pass to put a tourniquet on that - to hold it from getting worse - but the economy is going to go through a really rough ride."
At its core, the bill gives the Treasury Department $700 billion to purchase bad mortgage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit in the U.S. economy has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand, and adversely affecting consumers seeking financing for mortgages, cars and student loans. Some state governments have also experienced difficulty borrowing money.
The House vote marked a sharp change from Monday, when an earlier measure was sent down to defeat, largely at the hands of angry conservative Republicans.
On Friday, 91 Republicans joined 172 Democrats to support the bill, while 108 Republicans and 68 Democrats opposed it. Tenn. Rep. Zach Wamp was one of 25 Republicans who switched from "no" to "yes" votes; Democrats had 33 converts, including Elijah Cummings of Maryland, reports CBS News correspondent Bob Orr.
"Sometimes you just have to do what is necessary at that moment," he said.
One Democrat who supported Monday's version, Rep. Jim McDermott of Washington, opposed the bill Friday. One Republican who didn't vote Monday, Rep. Jerry Weller of Illinois, voted "yes" on Friday.
Several of the Democrats who switched were members of the Congressional Black Caucus who said presidential candidate Barack Obama had pledged to support legislation easing the burden on consumers if he wins the White House.
Republican presidential candidate John McCain also lobbied for the measure, according to aides who declined to release a list of lawmakers he called.
Following Monday's vote, Senate leaders quickly took custody of the measure, adding on $110 billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry. The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the major party presidential candidates and outside groups joined forces behind the measure.
In addition, the measure was changed to broaden the federal government's deposit insurance program, and the Securities and Exchange Commission loosened a regulation to ease the impact of the distressed assets on the balance sheet of financial institutions.
Despite occasionally strong criticism of the added spending and tax measures, the maneuvers worked - augmented by a sudden switch in public opinion that occurred after the stock market took its largest-ever one-day dive on Monday.
"No matter what we do or what we pass, there are still tough times out there. People are mad - I'm mad," said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, "We have to act. We have to act now."
Rep. John Lewis, D-Ga., another convert, said, "I have decided that the cost of doing nothing is greater than the cost of doing something."
Critics were unrelenting.
"How can we have capitalism on the way up and socialism on the way down," said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation - an unprecedented federal intervention into the private capital markets.
It was little more than two weeks ago that Paulson and Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.
White the main thrust of their initial proposal was unchanged, lawmakers insisting on greater congressional supervision over the $700 billion, measures to protect taxpayers and steps to crack down on so-called "golden parachutes" that go to corporate executives whose companies fail.
Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions.
In the moments before the vote, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, pledged "serious surgery" next year to address the underlying causes of the crisis.
If anything, the economic news added to the sense of urgency.
The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. The news of the payroll cuts came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent.
Typifying arguments the problem no longer is just a Wall Street issue but also one for Main Street, lawmakers from California and Florida said their state governments were beginning to experience trouble borrowing funds for their own operations.
Pelosi said, "We must win it for Mr. and Mrs. Jones on Main Street."
One month before Election Day, the drama unfolded in an intensely political atmosphere.
Members of the Congressional Black Caucus credited Obama with changing their minds.
Reps. Elijah Cummings and Donna Edwards, both Maryland Democrats, were among them. They said Obama had pledged if he wins the White House that he would help homeowners facing foreclosure on their mortgages. He also pledged to support changes in the bankruptcy law to make it less burdensome on consumers.
Obama's rival, Republican Sen. McCain, announced a brief suspension in his campaign more than a week ago to try and help solve the financial crisis.
Republican Rep. Sue Myrick of North Carolina, who switched her vote to favor the measure, said, "I may lose this race over this vote, but that's OK with me. This is the right vote for the country."
Myrick said she hadn't heard from McCain as she made up her mind about how to vote. "They told me he was going to call me. He didn't," she said.
The vote on Monday had staggered the congressional leadership and contributed to the largest one-day stock market drop in history, 778 points as measured by the Dow Jones Industrials.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. "We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the vote, although he conceded, "our economy continues to face serious challenges."
Underscoring that somber warning, the Dow Jones industrials, up more than 200 points at the time of the House vote, ended the day down 157.
The final vote, 263-171 in the House, capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act. There were 58 more votes for the measure than an earlier version that failed on Monday.
"We all know that we are in the midst of a financial crisis," House Republican leader John Boehner of Ohio said shortly before casting his vote for a massive government intervention in private capital markets that was unthinkable only a month ago.
"And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen," he said.
House Speaker Nancy Pelosi, D-Calif., said the bill was needed to "begin to shape the financial stability of our country and the economic security of our people."
Treasury Secretary Henry Paulson pledged to begin using his new authority quickly, and Federal Reserve Chairman Ben Bernanke said the central bank would work closely with the administration.
Wall Street welcomed the action, but investors also were buffeted by a bad report on the job market. The Labor Department said employers slashed 159,000 jobs in September, the largest cut in five years and further evidence of a sinking economy.
"The consensus of economists that I've talked to are saying we are now at the beginning of what is probably going to be a deep recession for the next six months," said CBS News correspondent Anthony Mason. "This bill had to pass to put a tourniquet on that - to hold it from getting worse - but the economy is going to go through a really rough ride."
At its core, the bill gives the Treasury Department $700 billion to purchase bad mortgage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit in the U.S. economy has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand, and adversely affecting consumers seeking financing for mortgages, cars and student loans. Some state governments have also experienced difficulty borrowing money.
The House vote marked a sharp change from Monday, when an earlier measure was sent down to defeat, largely at the hands of angry conservative Republicans.
On Friday, 91 Republicans joined 172 Democrats to support the bill, while 108 Republicans and 68 Democrats opposed it. Tenn. Rep. Zach Wamp was one of 25 Republicans who switched from "no" to "yes" votes; Democrats had 33 converts, including Elijah Cummings of Maryland, reports CBS News correspondent Bob Orr.
"Sometimes you just have to do what is necessary at that moment," he said.
One Democrat who supported Monday's version, Rep. Jim McDermott of Washington, opposed the bill Friday. One Republican who didn't vote Monday, Rep. Jerry Weller of Illinois, voted "yes" on Friday.
Several of the Democrats who switched were members of the Congressional Black Caucus who said presidential candidate Barack Obama had pledged to support legislation easing the burden on consumers if he wins the White House.
Republican presidential candidate John McCain also lobbied for the measure, according to aides who declined to release a list of lawmakers he called.
Following Monday's vote, Senate leaders quickly took custody of the measure, adding on $110 billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry. The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the major party presidential candidates and outside groups joined forces behind the measure.
In addition, the measure was changed to broaden the federal government's deposit insurance program, and the Securities and Exchange Commission loosened a regulation to ease the impact of the distressed assets on the balance sheet of financial institutions.
Despite occasionally strong criticism of the added spending and tax measures, the maneuvers worked - augmented by a sudden switch in public opinion that occurred after the stock market took its largest-ever one-day dive on Monday.
"No matter what we do or what we pass, there are still tough times out there. People are mad - I'm mad," said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, "We have to act. We have to act now."
Rep. John Lewis, D-Ga., another convert, said, "I have decided that the cost of doing nothing is greater than the cost of doing something."
Critics were unrelenting.
"How can we have capitalism on the way up and socialism on the way down," said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation - an unprecedented federal intervention into the private capital markets.
It was little more than two weeks ago that Paulson and Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.
White the main thrust of their initial proposal was unchanged, lawmakers insisting on greater congressional supervision over the $700 billion, measures to protect taxpayers and steps to crack down on so-called "golden parachutes" that go to corporate executives whose companies fail.
Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions.
In the moments before the vote, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, pledged "serious surgery" next year to address the underlying causes of the crisis.
If anything, the economic news added to the sense of urgency.
The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. The news of the payroll cuts came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent.
Typifying arguments the problem no longer is just a Wall Street issue but also one for Main Street, lawmakers from California and Florida said their state governments were beginning to experience trouble borrowing funds for their own operations.
Pelosi said, "We must win it for Mr. and Mrs. Jones on Main Street."
One month before Election Day, the drama unfolded in an intensely political atmosphere.
Members of the Congressional Black Caucus credited Obama with changing their minds.
Reps. Elijah Cummings and Donna Edwards, both Maryland Democrats, were among them. They said Obama had pledged if he wins the White House that he would help homeowners facing foreclosure on their mortgages. He also pledged to support changes in the bankruptcy law to make it less burdensome on consumers.
Obama's rival, Republican Sen. McCain, announced a brief suspension in his campaign more than a week ago to try and help solve the financial crisis.
Republican Rep. Sue Myrick of North Carolina, who switched her vote to favor the measure, said, "I may lose this race over this vote, but that's OK with me. This is the right vote for the country."
Myrick said she hadn't heard from McCain as she made up her mind about how to vote. "They told me he was going to call me. He didn't," she said.
The vote on Monday had staggered the congressional leadership and contributed to the largest one-day stock market drop in history, 778 points as measured by the Dow Jones Industrials.
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The passage of this Bill clearly violates the Law.
Also, there is a requirement of a 2/3''s vote to pass a Bill in the House of Representatives. Even as the House of Representative, the Senate and the Executive Office chose to violate Legal Procedure; it still didn''t overcome the 2/3''s majority of the House for approval. Where did this perversion of a 2/3''s margin come from and just how long has it been going on?
''In exchange for their check, the FED, a private corporation with private stockholders, now owns one billion dollars worth of US Treasurys. When the FED takes possession of US Treasurys, it also takes possession and control of the real wealth of America, as it is the labor and property of millions of citizens, transferred into the Treasury through taxes, that backs up the actual worth of these Treasury obligations.
Each time the private corporation called the FED of New York ''purchases'' a billion dollars in Bonds, one billion dollars worth of American labor and property must eventually be confiscated by the Treasury to ''cover the check''. To add to the oppressive nature of our current money system, the FED will collect annual interest on the Treasurys it holds, further adding to the indebtedness of the American Citizens to the Treasury.
Under our present system of money creation, it is a sad fact that each dollar note issued by this corporation places one dollars worth of debt onto the backs of the American population. Since 1913, the value of the Dollar has fallen to 4 cents. Our gold reserves have vanished.
A continually inflated money supply wipes out the value of life savings. Within 5 years, interest payments on the national debt will exceed all revenue collected annually by the Treasury. Sadly, not one in 100,000 Americans would be able to guess the identity of the actual group responsible for these tragic statistics.''
www.usgoldcoins.com/information/articles/truth_about_money.html
Part 1
''Most Americans assume the Federal Reserve Bank (FED) is a branch of Government. It is not. The FED is a private corporation, owned by foreign interests. This bank and its stockholders control the entire wealth of America.
At its inception, the activities of the FED were intended to be monitored by the President and Congress. However, over the years, through repeated subtle changes in legislation, the operations of this corporation have become completely independent of all Congressional control. Extremely secretive in its operation, this corporation even refuses to be audited by the US Government.
To understand how the FED has successfully transferred the wealth and resources of the mightiest nation on earth into the pockets of its privileged shareholders, it is only necessary to examine the procedure that this corporation employs to create our currency.
When the management of the FED proclaims that one billion dollars should be created for use by the American people, they simply write a check for one billion dollars. By doing so, new money is thereby created out of thin air, as the FED, the creator of money, is not required to have any actual funds of its own to cover this check! With this check they then purchase one billion dollars%u2019 worth of US Treasury Bonds from major banks and brokerage houses.''
Then he would hold his nose and vote for the lesser of two evils: Obama
www.nolanchart.com/article5088.html
''The FED System and fractional reserve banking are normally presented to us as a model of sound banking practices that have made America the economic envy of the world. The reality is quite different. Fractional reserve banking is really nothing more than legalized Fraud which causes tremendous harm without most people even being aware of that harm! The FED System masquerades as a regulatory controller of banks, but in fact it is a partner with both the biggest banks and the US Government against the rest of US.
This partnership is a super cartel whose goal is to extract huge amounts of wealth from society at large for the purpose of providing gigantic amounts of spendable money for the gov without direct taxation and a huge, endless train of interest payments for the banks. The banks are not encouraged by the system to engage in frugal, cautious behavior. They are encouraged to engage in some of the most reckless, unsound business practices ever conceived in history, with the 100% certain knowledge that the gov will bail them out at taxpayer expense whenever the spam hits the fan, as happened yesterday in DC.
The aim of this partnership is to create and control a fiat money supply to be used in helping the partners create Trillions of dollars for their own use at the expense of everyone else. It is the greatest Financial Fraud ever perpetrated in the history of mankind.''