House Passes Economic Recovery Bill

'Sweetened' bill passes 263-171 as Congress addresses economic crisis.

October 3, 2008, 10:36 AM

Oct. 3, 2008— -- The House of Representatives passed a sweeping, $700 billion economic rescue package on Friday after reconsidering the measure it failed to green-light earlier this week. President Bush quickly signed it into law.

The vote in the House was 263 to 171, well above the 218 votes needed to pass the bill.

On the floor of the House prior to the vote, House Speaker Nancy Pelosi warned, "Our message to Wall Street is the party is over."

An emotional House Minority Leader John Boehner called the vote one of the "most serious" lawmakers will cast and said, "While we have an imperfect product, we have a responsibility to act."

Boehner, R-Ohio, also said the U.S. was in a recession.

"Even if we pass this bill today, let's not kid ourselves. We're in the midst of a recession. It's gonna be a rough ride."

President Bush quickly praised the bill's passage this afternoon from the Rose Garden before heading back inside to sign the measure without any ceremony.

"By coming together on this legislation, we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country. We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy," he said.

Bush added, "Americans should also expect that it will take some time for this legislation to have its full impact on our economy."

Treasury Secretary Henry Paulson also reacted in a statement, saying, "The broad authorities in this legislation, when combined with existing regulatory authorities and resources, gives us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets."

Several members who opposed the bill on Monday expressed a change of opinion in the debate that led up to the successful vote.

"I think we did improve the bill," said Rep. Howard Coble, R-N.C., who opposed the bill on Monday, when it fell short of passage by 13 votes.

"I believe, Madame Speaker, that inaction is not an option," Coble said. "I'm voting 'aye' today -- and it may be politically damaging. And the sky may fall tomorrow, but it'll fall upon my head."

Rep. Zach Wamp, R-Tenn., another who voted against the measure earlier this week, now implored the House to act. "We're out of options," he said. "We don't have a month to write a new bill. Things are critical. We don't even have gas at stations in Tennessee.

"Hold your hand over your heart and vote yes," Wamp said.

Others were seeking guidance from a higher authority.

"I asked the good Lord to give me guidance and wisdom to make the decision. I will vote yes and I ask my colleagues to do the same," said Gresham Barrett, R-S.C., on the House floor.

But opposition to the controversial $700 billion package was still strong.

Rep. Devin Nunes, R-Calif., countered calls of support, saying, "If the secretary [of the Treasury] wants to run a hedge fund, he should go back to Wall Street. This Congress should not hand over such an enormous amount of money. It's wrong. It's simply irresponsible."

The economic rescue plan breezed through the Senate Wednesday night on a 75-24 vote, a move that was intended to put pressure on the House to also approve the measure.

House Passes Historic Economic Rescue Bill

The high-stakes vote came as new developments Friday put added pressure on the government to help the country navigate its economic crisis.

On Friday morning the Labor Department released numbers revealing that employers cut 159,000 jobs in September, marking the ninth month in a row that employment numbers have declined.

And Wachovia Corp. said it would be bought by Wells Fargo for $15.1 billion.

The House's rejection of an earlier version of the package triggered a 777-point plunge in the stock market Monday.

The House approved a bill packed with $100 billion worth of extra incentives than Monday's proposal had.

The additions were intended to appeal to the 133 disapproving House Republicans that helped vote down the measure earlier this week.

Some of the goodies intended to attract the votes of individual members of Congress include $192 million to divert taxes paid by the rum producers from the federal government to the governments of Puerto Rico and Virgin Islands, $128 million for car racing tracks, $33 million for corporations operating in American Samoa, and $10 million for small film and television productions.

Other Senate modifications with much broader appeal includes a provision that gives the Treasury Department the authority to buy troubled mortgage securities.

The bill also now includes an extension of numerous tax breaks for research and development and renewable energy companies, as well as personal tax breaks for college tuition and disaster victims.

It proposes adjusting the Alternative Minimum Tax, so it doesn't hit more than 20 million middle class Americans in 2009.

Another key modification is a one-year increase in the limits of personal bank savings the government insures up to $250,000.

Bush Called on Congress to Act on Economic Crisis

Still, despite promising support building on the Republican side, some worried that fiscally conservative House Democrats would not support the bill's tax cuts that are not paid for in the budget.

On Wednesday, Bush heralded the Senate version of the bill, arguing that it's better than the one that failed to pass the House 228-205 on Monday.

"It's very important for members to take this bill very seriously," Bush said while meeting with NATO Cmdr. Gen. McKiernan in the Oval Office. "It's very important for us to pass this piece of legislation so as to stabilize the situation, so that it doesn't get worse and that our fellow citizens lose wealth and work. ... the bill is different. It's been improved."

ABC News' Kate Barrett and Dean Norland contributed to this report.

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