today in black history

August 03, 2020

The U.S. Senate overrode President Ronald Reagan’s veto of legislation imposing economic sanctions against South Africa in 1986.

Bailout Bill Clears House

POSTED: October 03, 2008, 12:00 pm

  • POST
    • Add to Mixx!
  • Text Size
  • PDF

The second time was the charm for President Bush’s $700 billion economic recovery plan, H.R. 1424. It was passed by the House of Representatives 263-171 on Friday, with 172 Democrats and 91 Republicans voting in favor and 63 Democrats and 108 Republicans opposed, two days after the Senate voted in its favor. President Bush immediately signed the legislation into law. The vote capped a suspenseful 48 hours as pressure mounted on Speaker Nancy Pelosi to get her chamber to sign off on the bill against strong bipartisan opposition, including 13 members of the Congressional Black Caucus who voted against the measure last week. She and Majority Whip Rep. Jim Clyburn (D-SC) had their work cut out lining up affirmative votes among their colleagues.

Following the vote at a press conference with Rep. Barney Frank (D-MA), Chairman of the House Financial Service Committee, Speaker Pelosi said, “While the focus has been on the Dow Jones and Wall Street, we are addressing the real pain felt by Mr. and Mrs. Jones on Main Street. They are why we must pass this legislation today. Seniors and those nearing retirement have watched their savings dwindle, and their pensions evaporate. Entrepreneurs seeking a plan for new business are being turned away from credit, undermining job creation. If you’re trying to buy a car, you cannot get a car loan. If you’re trying to sell a car, you can’t get a business loan to purchase inventory. If you’re trying to save for your children’s college education, you’re deeply in doubt as to whether your savings will be there.”

From the Rose Garden at the White House a relieved President Bush (pictured at left with business leaders in White House photo) expressed his thanks to Congressional leaders for passing the legislation. “There were moments this week when some thought the federal government could not rise to the challenge. But thanks to the hard work of members of both parties in both Houses -- and a spirit of cooperation between Capitol Hill and my administration -- we completed this bill in a timely manner. I'm especially grateful for the contributions of Speaker Nancy Pelosi, Minority Leader John Boehner, Majority Leader Steny Hoyer, Minority Whip Roy Blunt, Chairman Barney Frank, Ranking Member Spencer Bachus.”

As the legislation made its way back to the House this week, the nation’s economy continued to show signs of distress. Early in the day on Friday the Department of Labor’s Bureau of Labor Statistics (BLS) released its monthly Employment Situation Summary indicating the economy shed 159,000 jobs in September, the largest drop in five years. The announcement also came through that Wells Fargo Bank was acquiring Wachovia Bank, the latest in a series of bank acquisitions that have taken place over the last three weeks.

Last week’s revolt in the House was precipitated by members in both parties feeling pressure from constituents over the size of the bailout and feelings that the federal government should not rescue large financial institutions the public considers responsible for the economic downturn. While many Democrats opposed the measure last week on the grounds that it did not include enough support for individual homeowners and consumers, and insufficient oversight of affected firms, Republicans were angry over the manner in which the White House rolled out the bill. Many Members in the Republican Caucus felt they were blindsided when Treasury Secretary Henry Paulson suddenly escalated the severity of the crisis amidst the collapse of Lehman Brothers, failure of American International Group (AIG) and the surprise purchase of Merrill Lynch by Bank of America.

The bill passed by the House was the version approved by the Senate, and it included an extension of certain tax breaks for individuals and businesses, a temporary increase in Federal Deposit Insurance Corporation (FDIC) coverage for individual bank accounts from $100,000 per account to $250,000.

While the bill picked up five votes from the Congressional Black Caucus, eight members continued to oppose the measure. They were Rep. G.K. Butterfield (D-NC), Rep. William Clay, Jr. (D-MO), Rep. John Conyers (D-MI), Rep. William Jefferson (D-LA), Rep. Hank Johnson (D-GA), Rep. Donald Payne (D-NJ), Rep. Bobby Scott (D-VA), and Rep. Bennie Thompson (D-MS). Their opposition is indicative of the widespread skepticism among their constituents that the recovery plan will trickle down and assist Black homeowners and consumers who are in danger of losing their homes or are mired in debt. Some members who supported the bill were said to have attributed their vote to outreach to his fellow CBC members by Senator Barack Obama, who voted in favor of the bill in the Senate.

Rep. Charles Rangel (D-NY), Chairman of the House Committee on Ways and Means, while voting in favor of the bill, expressed concern over the circumstances in which it was being taken up in the House. Prior to the vote Rangel said, “Now we’re being told by the Senate and the Administration that things will get worse if we don’t pass this package. Not only would failure throw the financial markets into further chaos, but it would also deny families and businesses critical tax relief we have been working so hard to provide. I just hope and pray that we might be able to regain the power we used to have in the House – introduce bills, hold hearings and fully understand what we’re doing, rather than having to yield to the threat of fiscal disaster or unwarranted tax liability for hardworking families. The American people send us here to do no less.”

The pace at which the bill was moved in the House and signed by President Bush is indicative of the sense of urgency that Treasury Secretary Henry Paulson attached to the legislation. Paulson announced, “In the coming days we will work with the Federal Reserve and the FDIC to develop strategies that deploy these tools in an expedited and methodical way to maximize effectiveness in strengthening the financial system, so it can continue to play its necessary and vital role supporting the U.S. economy and American jobs.” News of the deal did little to resuscitate the markets with the Dow Jones Industrial Average down 157.47 points at the close of trading at the New York Stock Exchange.

Related References