Bush Signs $700 Billion Financial Bailout Bill

[SlightlyCatholic]

President Bush signed a $700 billion financial bailout package Friday, shortly after the U.S. House passed the rescue measure, in a vote of 263-171. The action paved the way for the government to start buying up troubled assets from financial institutions caught on the wrong side of record home foreclosures.

"I know some Americans have reservations about this legislation. ... In this situation, action is clearly necessary, and ultimately the cost to taxpayers will be far less than the initial outlay," the president said after the House action.

He said it would take some time for the legislation to have its full effect on the economy.

"There were moments this week when some thought that the federal government could not rise to the challenge. But thanks to the hard work of members of both parties, in both houses, and the spirit of cooperation between Capitol Hill and my administration, we completed this bill in a timely manner," he said in remarks in the Rose Garden.

The House had rejected a similar bill on Monday, causing the Dow Jones industrial average to plummet almost 800 points. The Senate approved a revised version earlier this week, sending it back to the House for another try.

For more than a week, investor sentiment has been revolving around the twin suns of Capitol Hill and Wall Street. Investors had already factored the vote into share prices, and that's part of the reason the stock market moved sideways after the vote.

The Dow had been up about 200 points Friday morning but began a slide after the vote, with investors apparently showing concern that the economy is still in for a rough ride. The Dow was down by 157 points at the close of trading. Analysts say investors are assuming a recession is in the offing and expect the Federal Reserve to lower interest rates to blunt that downturn.

The 450-page bill gives the government the unprecedented authority to buy troubled assets on Wall Street's balance sheets. It contains provisions favored by House Republicans, including $149 billion in tax breaks, a higher limit on federal bank deposit insurance and changes in securities law.

It also restates securities regulators' authority to suspend asset-valuing rules that corporate executives blame for fueling the crisis. The Senate approved the bill Wednesday, 74-25.

Rep. Michele Bachmann (R-MN) voted against the bill. Treasury Secretary Henry Paulson "pulled the fire alarm and cried fire, fire from the roof," she said on CNBC shortly before the vote. The Senate's version of the bailout bill is nothing more than a dressed-up version of what she voted against Monday, Bachmann said.

"This doesn't address the fundamental problem of the credit crisis," she said. "Coming down the road for the next few years, we may rue the day that this passed."

Link at: http://www.npr.org/templates/story/s...oryId=95357697

[PaulR]

Did the notice the "POSITIVE" reaction of the stock marked afterward? I am still thinking that this bailout was the worst possible thing the government could have done. Oh... welcome to the new Socialist Economical Policy adopted by our government!

[SlightlyCatholic]

Oh well...go build a NASCAR track, you'll get a nice tax break. The interesting thing to watch will be how this all plays out and how the bill will get from congress to the average working American.