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The House of Representatives, divided by fear of a market implosion if they did nothing and huge costs to angry taxpayers if they did something, on Monday afternoon narrowly rejected a $700 billion Wall Street bailout plan -- but behind-the-scenes wrangling may convince a sufficient number of lawmakers to later support it. "Rich Wall Street fat cats expect
Joe six-pack to suck it up and pay for their mistakes," said Rep. Ted Poe,
R-Texas, speaking for a number of Republicans and
many Democratic lawmakers who have been inundated from constituents opposed to
the bailout. "I'm not going to take that."
Lawmakers opposed the legislation, which was crafted quickly behind closed doors over the weekend, by a vote of 205-228. Roughly 95 Democrats opposed the bill, surprising many people in the leadership. Roughly 133 GOP lawmakers opposed the bill, arguing that it was rushed while possible alternatives to the measure that they believed would be less costly to taxpayers were not given a chance to be discussed. The 109-page bill would authorize the government in phases to buy $700 billion of illiquid mortgage assets, mostly from Wall Street financial institutions. The bill also has curbs on executive compensation for executives, equity stake and capital distribution control provisions to protect taxpayers and a voluntary insurance provision sought by House GOP lawmakers. The prospect of the bill failing was anticipated by House Minority Leader John Boehner, R-Ohio. "This is a tough vote," said Boehner. "There are lots of risks for anyone that votes for this, but think about what happens if we don't pass it."
Behind the scenes key lawmakers inlcuding Boehner,
House Speaker Nancy Pelosi, D-Calif., and House Financial Services Committee Chairman Barney Frank, D-Mass., are busy pushing lawmakers to change their minds
on the bill. Many lawmakers, who are up for election in November, probably had
hoped it would pass, but they didn't want to be the ones voting for it at the
expense of taxpayers. Keep posted for possible changes later on Monday. - Ron
Orol Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. Categories Deal Video
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