Congress Passes $700 Billion Financial-Bailout Bill

Senate changes to the bill and encouragement from voters convince House to approve it by 263-171.

On Friday (October 3), the House of Representatives passed the $700 billion financial-bailout bill that it had previously defeated on Monday. After the House approved the rescue plan by a vote of 263-171, it was sent to President Bush, who in a statement to the press said he would sign it into law later that day.

"By coming together on this legislation, we have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country," he said. "I know some Americans have concerns; in this situation, action was clearly necessary."

Following Monday's House vote, the Senate made several alterations to the bill, increasing it from a three-page proposal to a 100-plus-page document, and passed it on Wednesday. The bailout legislation allows the Treasury secretary to use up to $700 billion, contributed by taxpayers, toward purchasing troubled assets from banks. It is the biggest government intervention in the economy since the Great Depression.

According to CNN, House Minority Whip Roy Blunt, a Republican from Missouri, told reporters that many representatives changed their minds about the bill after receiving calls from voters supporting it, having the SEC accounting rules clarified and seeing the Senate's additions to the bill — which included tax-break extenders and an increase in FDIC deposit-insurance coverage from $100,000 to $250,000.

"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," House Speaker Nancy Pelosi told reporters. While some representatives still lamented giving assistance to the very banks they blame for the country's mortgage crisis, the bill's supporters hope that it will both encourage reform and make sure individuals and small businesses continue to receive the loans they need.

"The legislation is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses," Federal Reserve Chairman Ben Bernanke said.