WASHINGTON - With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush who quickly signed it.
"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country,'' Bush said shortly after the vote. He conceded, ''Our economy continues to face serious challenges.''
Underscoring that somber warning, the Dow Jones industrials, up more than 200 points at the time of the House vote, had fallen into negative territory an hour later. They fluctuated as the afternoon wore on.
The final vote, 263-171 in the House, capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act. There were 58 more votes for the measure than an earlier version that failed Monday.
Local members of Congress voted Friday the same way - along party lines - that they did on the first economic stabilization act that came before them.
U.S. Rep. Zack Space and U.S. Rep. Charles Wilson, both D-Ohio, along with U.S. Rep. Alan Mollohan, D-W.Va., voted in favor of the package.
U.S. Rep. Shelley Moore Capito, R-W.Va., cast a "no" vote.
"While we've seen some key adjustments around the edges, this is fundamentally the same bill we considered on Monday," said Capito. "We're still talking about $700 billion, and we're still talking about a process that lacks sufficient oversight and taxpayer protections for West Virginia families who pay their bills and play by the rules. It's not even clear why $700 billion was the chosen number.
"Clearly we're all concerned about ensuring the flow of credit, shoring up small businesses, preserving West Virginia jobs and protecting retirement accounts, but there were other options available that weren't even allowed to be considered. Instead of a serious look at how to reduce the cost to the taxpayer, we saw the add-on of various provisions designed to convince us to switch our votes that has actually made this bill $110 billion more expensive. That's not how we should be addressing this problem, and that's not how West Virginians want to see us address this issue."
While 108 House Republicans voted against the package, 91 did cast ballots in favor, Space noted. He said this indicates bipartisan support for the bill
But Space said he was by no means happy that Congress was faced with considering such legislation.
"I don't like that we had this bill, but I dislike the alternatives ... ," he commented.
Space, though, said he based his decision to approve the bill on the long lines he has seen at food pantries and soup kitchens in East Ohio. Many of those people, he noted, go to work each day but still live in poverty.
"Today I voted to protect the taxpayers of Ohio from economic collapse," Space said. "Without this rescue package, we could have seen an economic disaster on the scale of the Great Depression.
"I knew if we didn't do something, the effects could very well be devastating," he continued. "Many areas of the 18th District have10 percent unemployment and a 20 percent poverty level. These people can't afford a credit squeeze, or to see their pensions eliminated."
Space said what bothered him most about the bill was the number of tax extenders for numerous domestic products that were added on to the legislation. These, he said, should have been part of a separate bill.
Wilson noted that the legislation passed Friday included renewable American energy tax incentives for 20 million families who could be hit by the Alternative Minimum Tax, extensions of expiring business and family tax cuts, disaster relief, mental health parity to end coverage discrimination and other provisions.
"There has been a lot of talk about the $150 billion of spending the Senate added to the bill," Wilson said.
"These are not earmarks headed to specific districts at the request of a specific senator or member of Congress. The bulk of the additional spending is AMT relief for the middle class and extending tax incentives that would have expired for alternative energy, including tax credits for the construction of clean coal facilities."
But Wilson said he wished the Senate version of the tax extenders in the bill "had been paid for," noting that when the House passed a similar package of tax extenders earlier this summer it provided for the funds within the legislation.
"However, it was important to pass this bill today to protect the economy and protect Main Street," he said.
"First and foremost, we protected the taxpayers. We are facing an economic downturn as serious as any that has faced this nation. An incredible 159,000 workers lost their jobs last month, small businesses aren't getting the short-term loans they need to operate in a normal way and even in California, the state says it might have to stop paying its teachers soon if something isn't done. I know it's a lot of money, but the cost of inaction would have been much worse."
Mollohan voted in favor of the earlier legislation, noting that "it is necessary to keep a credit crisis that is already making it harder to buy a home, get a loan to start a small business, or even finance a student's college education, from creating much more serious economic problems in communities all across America."
David Herring, Mollohan's spokesman, said Mollohan had no additional comments Friday.
Treasury Secretary Henry Paulson pledged to begin using his new authority quickly, and Federal Reserve Chairman Ben Bernanke said the central bank would work closely with the administration.
Wall Street welcomed the action, but investors also were buffeted by a bad report on the job market.
At its core, the bill gives the Treasury Department $700 billion to purchase bad mortgage-related securities that are weighing down the balance sheets of institutions that hold them.
The flow of credit in the U.S. economy has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand and adversely affecting consumers seeking financing for mortgages, cars and student loans. Some state governments have also experienced difficulty borrowing money.
A total of 33 Democrats and 25 Republicans switched from opposition to support. Several of the Democrats were members of the Congressional Black Caucus, who said presidential candidate Barack Obama had pledged to support legislation easing the burden on consumers if he wins the White House.
Republican presidential candidate John McCain also lobbied for the measure, according to aides who declined to release a list of lawmakers he called.
Following Monday's vote, Senate leaders quickly took custody of the measure, adding on $110 billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry.
The revised measure won Senate approval Wednesday night, 74-25.