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Bailout backers gambled on arm-twisting
Question of the Day
Democrats and Republicans knew they didn't have the votes Monday morning to pass the Wall Street bailout bill but went ahead anyway, risking the markets on the hope that reluctant lawmakers could be steamrolled.
They goofed: The votes didn't materialize, the $700 billion bill failed and the stock market lost 7 percent of its value in one day, damaging the American economic psyche.
After being rushed to action by the Bush administration, both parties were left scrambling to explain how they miscalculated.
But even Republicans acknowledged they fell short, delivering only one-third of their members, compared with 60 percent of Democrats who voted for the bill. It fell 12 votes shy of passage, though at one point was as close as 10 votes.
“We did think we had a dozen more votes going to the floor than we had,” Minority Whip Rep. Roy Blunt of Missouri told reporters minutes after the bill failed, as he and other top Republicans said a stridently partisan speech by House Speaker Nancy Pelosi, California Democrat, angered those Republicans and turned them against the measure.
Undercutting their own leaders, though, many Republicans refused to blame Mrs. Pelosi and instead said the problem was President Bush, who has lost the trust of House Republicans — once his staunchest defenders.
"One of the first things the president can do is help to soothe the economic anxiety he has helped unleash, and fire [Treasury Secretary Henry M.] Paulson,” said Rep. Thaddeus McCotter, Michigan Republican, who said the bipartisan rejection reflected what voters have been telling Congress.
Rep. Darrell Issa, California Republican, said the administration should be “thrown under the bus” for the way it bungled the rescue plan.
“I have not nor will not disparage the leadership on either side,” Mr. Issa said. “The administration came in with an 'it's our way or the highway' approach. At the end of the day this was the administration's bill — no real reform, nothing binding.”
The bill was defeated by a vote of 228-205, with the opponents coming from an unusual alliance of conservative Republicans and liberal Democrats. The tally showed 133 Republicans and 95 Democrats voting against the bill, and 65 Republicans and 140 Democrats in favor.
The Center for Responsive Politics, which tracks campaign donations, said House members who supported the bailout bill on average received 50 percent more in campaign contributions from the finance, insurance and real estate sectors during their congressional careers than did those who opposed the measure.
That gap was particularly pronounced on the Democratic side, CRP said.
Democrats and Republicans said they expect to try again, and the House is slated to convene again Thursday, though it is not clear whether a new financial bailout can be ready by then.
“Today was just round one,” said Rep. Jack Kingston, Georgia Republican, who voted no and said he will be watching the markets and listening to voters. “I'm not saying no to everything. Today was just saying no to this package.”
In the meantime, lawmakers, who face elections in five weeks, are likely to hear plenty more from constituents who fired off so many e-mails and comments that the entire House Web site was disrupted Monday.
Calls and e-mails were overwhelmingly opposed to the bailout, with taxpayers angered at being left on the hook for Wall Street executives' mismanagement.
Democrats said they never thought about delaying the vote on the bill, both because the administration said it was urgent and because they counted on Republicans to deliver.
“A week ago Thursday night, Secretary Paulson, [Federal Reserve Chairman Ben S.] Bernanke sat with us and said speed was of the essence to respond to this crisis so we could stabilize the market. [Republican leader John A.] Boehner was in the room. He said absolutely he agreed with that. And so we have moved this ahead,” said House Majority Leader Steny H. Hoyer, Maryland Democrat.
Still, Democrats were indignant that Republicans fell short, and said that laying blame on Mrs. Pelosi's speech was petty.
“Somebody hurt my feelings, so I will punish the country. I mean, that's hardly plausible,” said Rep. Barney Frank of Massachusetts, the Democratic point man on the bill. “Give me those 12 people's names. And I will go talk uncharacteristically, nicely to them and tell them what wonderful people they are. And maybe they'll now think about the country.”
Democrats said it is up to Mr. Bush now to deliver the votes for a new proposal.
Mr. Bush said he was “disappointed” in the bill's failure. Mr. Paulson said the U.S. banking system was still holding up well despite the financial mess and the bill's failure, but that he would continue to press for a bill anyway.
“We have significant tools in our tool kit but they're not sufficient. And so we're going to continue to work with what we have until we get from Congress what we need,” he said.
The vote is a particular blow to Republican House leaders, all of whom voted for the bill but were unable to deliver their colleagues.
Several Republican aides said with more time, they might have been able to wrangle more votes for Monday's bill, raising hopes they can bridge the gap by the time the House returns later this week.
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