Bailout package becomes law

Under pressure from the U.S. Senate and the Bush administration, the House of Representatives approved the $700 billion economic bailout plan last Friday in a sweeping rescue of the nation’s financial sector.
‘By coming together on this legislation, we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country. We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy,’ Bush said in press release on Friday.
The Economic Emergency Stabilization Act authorizes Treasury Secretary Henry Paulson to buy troubled assets from financial institutions under the Troubled Asset Relief Program to avoid more bankruptcies and prevent an economic recession.
The act, which the House rejected 228 to 205 on Monday, Sept. 29, was an extensive bailout of financial institutions crushed by the country’s mortgage crisis and market troubles.
Supporters of the original proposal said passing it was necessary to avoid economic collapse, while opponents argued the bill was put together too quickly and needed more time and thought.
‘I am convinced that if we defeat this bill today, it will be a very bad day for the financial sector of the American economy,’ House Financial Services Committee chairman Barney Frank said during the House’s debate on the bailout. ‘And the people who will feel the pain are not the top bankers and the top corporate executives, but average Americans.’
After the House rejected the act, markets plunged and the Senate revised the Treasury’s Department’s original three-page proposal to a 451-page version, which included several incentives to allure the House to pass the altered bill.’
On Wednesday, the Senate voted 74 to 25 in favor of the act. Both presidential candidates Barack Obama and John McCain voted for the measure.
The only Senator who did not vote was Massachusetts’ Edward Kennedy, who is currently being treated for brain cancer.
Changes to the act included $150 billion in tax breaks for individuals and businesses, which included incentives for the use of renewable energy, protection for deposits at local banks and steps to limit home foreclosures, among others.
The agreement also disburses the $700 billion in $350 billion installments, with Congress able to block the second $350 billion if it deems necessary.
The final vote in the House on Friday was 263 to 171, with 33 Democrats and 24 Republicans switching sides to support the plan.
‘This legislation will help protect Massachusetts small businesses, families and hospitals from a serious credit crunch and will help restore confidence in our capital markets and our financial institutions. It is a critical first step towards getting our nation back on the right track,’ Sen. John Kerry said in a statement following the bill’s approval.
The approval of the act was followed by more problems on Wall Street and a government report showing that 159,000 jobs were lost in September, Treasury Secretary Henry Paulson said there was ‘no one-size-fits-all solution’ to improve the economy. President Bush agreed with the secretary and said it would take time for the country to feel the act’s positive effects.
‘Our economy continues to face serious challenges,’ Bush said. ‘This morning, we learned that America lost jobs again in September – disappointing news that underscores the urgency of the bill that Congress passed today. It will take more time and determined effort to get through this difficult period.’

Daily Free Press staff writer Max Levy contributed reporting to this article.