Constance Ikokwu
4 October 2008
Washington D.C. — President George W. Bush yesterday signed the controversial $700 billion bail-out bill for Wall Street after it was passed into law by the House of Representatives.
The United States Senate had on Wednesday given its nod to the bail out plan by a 74-25 vote.
It is the biggest bail-out bill ever signed by any United States president since the Great Depression.
"It's complicated and we're going to make sure whatever we do is done in a deliberative fashion. It is essential to helping America's economy weather the financial crisis," said President Bush.
The bill was thrown out Monday by the lower chamber with a 228-205 vote. After intense lobbying, phone calling and thousands of e-mails, the bill passed on the floor of the House by a vote of 263-171.
Stocks in the U.S. went up moderately after the bill was signed. There was no dramatic response. It is expected that the economy would gradually rebound, although there are questions regarding the extent the bail-out will help.
Treasury Secretary, Henry Paulson and Federal Reserve Chairman, Ben Bernanke welcomed the move.
"The broad authorities in this legislation, when combined with existing regulatory authorities and resources, give us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets," Paulson said in a statement.
He promised to "move rapidly to implement the new authorities."
Under the modified version of the plan, the Treasury Department would be authorized to spend as much as $700 billion to buy bad mortgage-related securities, which have slowed and, in some cases, dried up the flow of credit.
An additional $110 billion in additional tax breaks, incentives and other measures, including an expansion of coverage of individual bank deposits by the Federal Deposit Insurance Corp was added to the bill.
It was a move aimed at winning the support of those against the bill. Some are still outraged. They think it is a disaster and that Congress was stampeded into passing the bill.
Paulson is accused of creating a panic situation that prevented Congress from deliberating on the bill properly.
Representative Steve LaTourette said: "House and Senate leaders promised the bill wouldn't be a Christmas tree of add-ons, and in a matter of days it's gone from a Charlie Brown Christmas tree to Rockefeller Center. It's Christmas in October."
Majority Leader Steny Hoyer had a different view, arguing that compromise was needed. "For their sake, we must act."
The real work has just began, it seems. Rep. Barney Frank told newsmen that "it would be highly irresponsible - a betrayal of our oath - if we were to stop here. Now we have to perform more serious reform." Frank noted that a complete overhaul of federal regulations will begin.
"What Congress said to the American people today I hope will be taken as a promise. Our task now is to make sure no future Congress faces this choice," he added.
The financial crisis in the U.S. has claimed venerable institutions such as Lehman Brothers and Merryl Lynch.
It is believed the US is either in a recession or heading into a recession. 150,000 jobs were lost in the last one month of the crisis.
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