Newspapers across America on Oct. 1 announced that the vaunted bailout plan had passed in the Senate, despite its rejection by the House two days earlier. Both presidential candidates, Senators John McCain of Arizona and Barack Obama of Illinois, voted in favor. The U.S. Stock Market responded by continuing to plummet, and was down by 39 percent Friday.
Evidently McCain’s wishes that it be called a “rescue” plan instead of a “bailout” have failed to bolster confidence in the original $700 billion plan. The original proposal, just three pages, had increased to more than 450 pages, considerably upping the complexity of the plan. It took nearly $100 billion more along with a large number of “sweeteners” for both parties such as tax breaks for the middle class and tax break extenders to pass in Senate by a vote of 74 to 25. The bill passed in Senate by a vote of 74 to 25, and in House 263 to 171 Friday and was shortly thereafter signed into law by President Bush.
The basis of the bill is the Bush administration’s plan to purchase up to $700 billion of “toxic holdings,” troubled assets from financial institutions such as the American Investment Group that have essentially frozen credit and bank lending. Naysayers called this plan weak, a stopgap measure, while proponents argued that something had to be done to attempt to stop the economy’s freefall.
AIG has already thrown a half-million dollar party after receiving $85 billion as per the bailout. In response, they were scolded for their extravagance by congress and given an additional $38 billion.
It’s perhaps inevitable that the economic crisis would become a large part of the ongoing presidential campaign.
McCain famously “suspended” his campaign two weeks ago in order to deal with the economy. Spokesmen and women throughout the day had claimed that the House was coming closer and closer to passing the plan, but this solidarity collapsed upon McCain’s arrival when a substantial majority of House Republicans decided to vote against the bill.
Obama was criticized of his activity surrounding the bailout plan for “phoning it in,” although both candidates were present for the original House vote. Others have praised his ability to show calmness and confidence in the face of this crisis and in the televised debates. Undecided voters present at the debates have been impressed by Obama’s detailed, more concrete plans for the economy.
Both candidates voted in favor of the revised bailout plan. The fact that the House’s vote on Friday carried a comfortable majority may indicate that the “sweeteners” were to House’s liking on both sides of the aisle, as the basis for the parts of the plan relevant to the economic crisis remained much the same as the previous bill.
The legacy of this bill, for better or for worse, will rest equally on the shoulders of both parties.