US House of Representatives rejects financial bailout plan

September 30th, 2008 - 5:14 am ICT by IANS  

Washington, Sep 30 (Xinhua) The US House of Representatives rejected Monday the 7$00-billion financial bailout legislation, which Bush Administration said was “urgently needed to address a crisis in our financial system that threatens the entire US economy”.The bill was rejected by a vote of 228-205. Leaders in the House said they might reconsider the bill Thursday, as the Senate had planned a vote on the measure Wednesday.

The White House reacted immediately and President George W. Bush told reporters that he was disappointed at the House’s rejection, vowing to “address this economic situation head on”.

Under the bill, the government could get $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification and subject to a congressional resolution of disapproval.

However, the largest bailout plan since the Great Depression in 1930s was turned down by over two-thirds of republicans and 40 percent of Democrats.

Representative Darrel Issa, said he was “resolute” in his opposition to the measure because it would betray party principles and amount to “a coffin on top of Ronald Reagan’s coffin”.

Congresswoman Lynn Woolsey also voiced her opposition against the bill, noting taxpayers were being asked to pay for wild irresponsibility by America’s top finance firms.

Trying to calm the stunned investors, a Treasury spokeswoman vowed the US government will use “all tools at our disposal” to protect the US financial markets and the economy.

Treasury Secretary Henry Paulson, an advocate of the rescue plan “will be consulting with the president, the chairman of the Federal Reserve, and congressional leaders on next steps,” said Treasury spokeswoman Michele Davi.

Meanwhile, House Speaker Nancy Pelosi said the Congress rejection of the $700-billion-bailout plan “cannot stand” and that Congress would press ahead on a rescue plan.

Two White House hopeful, Republican Senator John McCain and Democratic Senator Barack Obama, supported the bailout plan.

“This is something that all of us will swallow hard and go forward with,” said McCain on Sunday, adding, “The option of doing nothing is simply not an acceptable option”.

Obama also expressed confidence that a rejected bailout package would still get through Congress and urged markets to stay calm.

The Democratic presidential candidate said he had been on the telephone with Treasury Secretary Henry Paulson and House of Representatives Speaker Nancy Pelosi along with other congressional leaders.

“It’s important for the markets to stay calm because things are never smooth in Congress and to understand that it will get done,” he said.

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