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House Rejects Bailout Bill

MELISSA BLOCK, host:

From NPR News, this is All Things Considered. I'm Melissa Block. The financial bailout went down today and with it, the markets. The House of Representatives stunned Washington and Wall Street by rejecting the rescue plan, and the Dow plunged nearly 780 points. That's the largest point drop ever. The bipartisan agreement that went up for a vote today was reached over the weekend. It would have allowed the U.S. Treasury to buy up to $700 billion dollars in bad mortgage debt. We'll have several reports. First to NPR's Debbie Elliott from Capitol Hill on why the bill failed.

Unidentified Woman: On this vote, the yays are 205, the nays are 228. The motion is not adopted. Without objection...

DEBBIE ELLIOTT: Those 228 no votes came primarily from a combination of conservative Republicans and liberal Democrats. One hundred and thirty-three Republicans voted no, and many in the conference had bristled all last week at the idea of the federal government stepping in to the financial markets. Georgia Republican Paul Broun expressed their sentiment during debate on the House floor today.

Representative PAUL BROUN (Republican, Georgia): This is a huge cow patty with a piece of marshmallow stuck in the middle of it, and I'm not going to eat that cow patty.

ELLIOTT: Liberal Democrats didn't like it any better. California's Lynn Woolsey asked why Congress would be willing to give a lame-duck administration so much money.

Representative LYNN WOOLSEY (Democrat, California): President Bush and Secretary Paulson have been wrong from the start on just about everything. Do you think they'll be responsible with this money? Think again.

ELLIOTT: In the end, those reservations won out despite sometimes passionate pleas from congressional leaders who had bags under their eyes from the round-the-clock negotiations that led to this moment. House Republican John Boehner appeared to choke back tears when he asked his colleagues to look into their souls and ask what's in the best interest of the country.

Representative JOHN BOEHNER (Republican, Ohio): Just think about what happens if we don't pass this bill. Think about what happens to your friends, your neighbors, your constituents. Think about the jobs that will be lost. If I didn't think we were on the brink of an economic disaster, it would be the easiest thing in the world for me to say no to this.

ELLIOTT: Even with calls to leave politics aside during the debate, once the rescue package failed, the gloves were off. Democratic Appropriations Chairman David Obey was shaking his head in disbelief as he left the House chamber.

Mr. DAVID OBEY (Chairman, House Appropriations Committee): This is the greatest failure of leadership within the Republican Party that I've seen in all the years I've been here. The president and Mr. McCain together could not deliver one-third of their own party for this. I mean, it's incredible, just incredible. It is incredibly reckless on their part. I'm just stunned.

ELLIOTT: But Republicans blamed Democratic House Speaker Nancy Pelosi for making a speech on the House floor that blamed the economic chaos on what she said was Republican fiscal irresponsibility. Here's minority leader Boehner after the vote.

Representative BOEHNER: We've put everything we had into getting the votes to get there today, but the speaker had to give a partisan voice that poisoned our conference, caused the number of members whom we thought we could get to go south.

Representative BARNEY FRANK (Democrat, Massachusetts): I'll make an offer, give me those 12 people's names, and I will go talk uncharacteristically nicely to them. And tell them what wonderful people they are, and maybe they'll now think about the country.

ELLIOTT: Democratic House Financial Services Chairman Barney Frank.

Rep. FRANK: We don't believe they had the votes, and I think they are covering up the embarrassment of not having the votes, but think about this: Somebody hurt my feelings, so I will punish the country - I mean, that's hard to be possible.

ELLIOTT: President Bush said he was disappointed in the vote; so did Treasury Secretary Henry Paulson. Paulson said he was consulting with congressional leaders to, quote, put something back together that works. We need it as soon as possible, he said. The House is set to come back into session Thursday to try again. House Speaker Nancy Pelosi said the lines of communication are open with the White House and talked of, quote, another bite of the apple.

Representative NANCY PELOSI (Democrat, California, House Speaker): What happened today - it cannot stand. We must move forward, and I hope that the markets will take that message.

ELLIOTT: As for the ramifications if Congress doesn't regroup? Here's Alabama congressman Spencer Bachus, the top Republican on the House Financial Services committee.

Representative SPENCER BACHUS (Republican, Alabama): Nobody knows. We don't know what we're facing. It's uncharted territory.

ELLIOTT: Debbie Elliott, NPR News the Capitol. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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NPR National Correspondent Debbie Elliott can be heard telling stories from her native South. She covers the latest news and politics, and is attuned to the region's rich culture and history.