House kills bailout backed by Obama, McCain
September 29, 2008
WASHINGTON ” The tumultuous American presidential race was thrown into unprecedented turmoil Monday as the House of Representatives voted down the $700 billion measure to rescue the failing American financial system.
Democrat Barack Obama said he was confident Congress eventually would find a way out of the morass surrounding a bailout, “but it’s going to be rocky.”
His Republican opponent John McCain did not immediately comment, but his chief economic adviser blamed Democrats for the failed vote.
“This bill failed because Barack Obama and the Democrats put politics ahead of country,” senior policy adviser Doug Holtz-Eakin said in a statement.
When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle. More than two-thirds of Republicans and 40 percent of Democrats opposed the bill.
Obama said he talked with Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi and other leaders, who were trying to figure out the next step.
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The Bush administration sent the rescue proposal to Congress 11 days ago with a call for urgent action.
With the economy intruding on the presidential contest as deeply as at any time since the Great Depression of the 1930s, the Dow Jones Industrial Average plunged as far as 705 points at one point before recovering slightly.
McCain suspended his campaign for two days last week to work on the crisis measure that both he and Obama had said they would support once it reached the Senate, where both are members.
Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.
Lawmakers shouted news of the plummeting Dow Jones average as lawmakers crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for roughly 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.
The House apparently was reacting to voter concerns about spending such vast sums of taxpayer money to prop up the failing U.S. financial industry.
The plan that was proposed by President George W. Bush would give the administration broad power to use billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms. The bailout ” the largest in U.S. history ” was designed to keep the worst financial crisis in more than 75 years from spreading throughout the economy.
“This is something that all of us will swallow hard and go forward with. The option of doing nothing is simply not an acceptable option,” McCain had said before the dramatic House vote. Obama said he was inclined to back it because the financial problems have gone beyond Wall Street to affecting everyday consumers.
The Senate vote had been expected as early as Wednesday, and Obama said he planned to return to the Senate for it. A spokesman for McCain said the Republican nominee plans to be in Washington and hopes he’ll be able to vote, depending on the schedule. The House rejection of the proposal blew out all those plans.
McCain, meanwhile, unleashed a blistering attack Monday on his Democratic rival, saying the race comes down to a simple question: “Country first or Obama first?”
In his first public appearance since Friday night’s first presidential debate, McCain told an audience in Ohio, an important swing state, that Obama advocates tax-and-spend policies that “will deepen our recession,” and voted against funding for equipment needed by troops in Iraq and Afghanistan.
“That is not putting the men and women of our military first,” he said, with his running mate Alaska Gov. Sarah Palin at his side.
Obama’s campaign issued a swift rebuttal that accused McCain of an “angry diatribe” that it said “won’t make up for his erratic response to the greatest financial crisis of our time.”
Last week, as Congress was working on the bailout plan, McCain said he was suspending his campaign to return to Washington to deal with the economic crisis, and he unsuccessfully sought to delay the first presidential debate, which went ahead on Friday.
In a statement, Obama’s campaign also said McCain had been untruthful in describing his Democratic opponent’s record on taxes, “and the lie he told the American people today is all the more outrageous a day after he admitted that his health care plan will increase taxes on some families.”
The votes in question occurred on a Democratic budget outline that set tax and spending outlines for the future, but did not actually raise taxes.
Obama has said he voted against one war funding measure only because it contained no timetable for withdrawal of U.S. forces from Iraq and compared that to McCain’s vote against a war funding measure that did contain a timetable for withdrawal.
Obama was campaigning in Colorado. His running mate Sen. Joe Biden was preparing for the vice presidential debate with Palin scheduled for Thursday.
Voters are consumed with the flailing U.S economy and McCain and Obama are pounding that issue, portraying themselves as the candidate best prepared to steer the country out of its financial morass.
McCain, the four-term Arizona senator, anoints himself the candidate who can restore financial oversight while slashing wasteful spending and cutting taxes on individuals and businesses. Obama, McCain says, would usher in an era of big government spending programs and high taxes.
Obama, a first-term senator from Illinois, says McCain represents a continuation of the unpopular Bush’s economic policies and argues McCain backs corporate tax breaks and lax regulation that have contributed to the financial crisis.
Polls suggest the race now tilts in Obama’s favor. McCain’s gains after the Republican National Convention earlier this month were fading under the weight of the struggling economy, an issue that does not play to McCain’s foreign policy strength.