Current Event #3

This week I read an article I found on washingtonpost.com called "Will $700 billion bailout unfreeze credit markets?" And will it? Only time will tell.

We all know about the bailout plan and its goal to pump money back into our faltering economy. It was rejected by Congress the first time but it passed through the second time and was signed by George W. Bush. Recently, Wall Street has been falling at a record of 778 points and after the bill was rejected, it fell another 157 points. House Republican leader John Boehner of Ohio claimed that if lawmakers hadn't acted on this crisis, it would "put us in a slump the likes of which most of us have never seen." The Bush administration gained authority to buy up toxic mortgage-related investments and other assets from unstable financial institutions in hopes of restoring confidence in the markets and thaw a near-freeze in credit availability that has begun to affect the ability of banks to lend, businesses to obtain money for payrolls and investments, and individuals to gain credit.

The House vote was 228-205 against the rescue plan. 95 democrats and 133 republicans who voted against the bill were responding to calls and messages from constituents demanding defeat of the plan. Many see it as a $700 billion giveaway to Wall Street when average working families weren't getting any support. The plan was approved on Wednesday and linked to the extension of popular tax breaks, renewable energy, and repair after natural disasters. Barack Obama spoke to many people in the Congressional Black Caucus and helped persuade 13 voters to switch to approving the plan. In the end, 33 Democrats and 25 Republicans switched their votes. Overall, 91 Republicans joined the 172 Democrats to support it while 108 Republicans and 63 Democrats voted "no."

Overall, I think its a start to getting out of this financial crisis. Its too soon to tell if it would do much and Bush said that its going to take time for results. I thought that it was going to pass through the first time, I was pretty surprised to hear that it got rejected.