Rescue Plan Passes Easily

Posted October 3, 2008 at 12:27pm

The second time was the charm.

The House easily passed the $700 billion financial rescue package Friday after it was sweetened with $150 billion in tax breaks on a 263-171 vote.

The dozens of switchers from Monday’s failed vote cited a variety of reasons for doing so, but liberals and conservatives alike cited growing fears about the spreading credit crisis in their districts. A trickle of new votes for the package turned into a flood.

Some prayed. Some were stunned at Monday’s 777-point drop in the Dow Jones industrial average. Many heard from businesses that had their access to credit choked off, or from seniors upset that their savings and investments had shrunk dramatically. Some said they were convinced by a phone call from presidential nominee Sen. Barack Obama (D-Ill.). Others said they weren’t convinced of the severity of the credit crunch Monday but are now.

“I’ve heard from literally hundreds of small businesses who are having trouble getting credit and hundreds of seniors worried about their pension funds,” Rep. Jim Ramstad (R-Minn.) said.

“Either you believe there is a credit crisis or you don’t believe there is a credit crisis,” Rep. Sue Myrick (R-N.C.) said. “I believe there is a credit crisis.”

Myrick said she stands by her Monday vote because it brought changes, including an increase in Federal Deposit Insurance Corp. insurance to $250,000.

“This is not about the politics,” she said. “I may lose this race because of this vote. That’s OK.”

Rep. Mike Conaway (R-Texas) said President Bush called him every day this week, except Friday, but it was his growing concern about the economy that prompted him to change.

“Lending is the lubricant that oils the gears of this economy,” he said. “We have a failure of that system.”

House GOP leaders, who had been embarrassed by the 2-to-1 whipping they took from their own Members on Monday, said they hadn’t taken anything for granted.

Minority Leader John Boehner (R-Ohio) said the bill has gotten better even this week as a result of resistance from House Republicans.

“The House Republicans have stood on principle, and we’ve made this better,” he said. “Is it perfect? No. But it’s better than it was a week ago.”

Minority Whip Roy Blunt (R-Mo.) said constituents are starting to realize the impact of the credit crunch on their pension plans and the broader economy, and they are calling Members urging support. The FDIC change and added tax breaks also appealed to Members.

Democrats including Reps. Lynn Woolsey (Calif.), Barbara Lee (Calif.), Donna Edwards (Md.), Elijah Cummings (Md.), John Lewis (Ga.), Mazie Hirono (Hawaii), John Yarmuth (Ky.) and Betty Sutton (Ohio) were among those switching their votes to yes.

Yarmuth said he was reluctantly joining those flipping their opposition earlier in the week to back the Senate-passed version of the package. “I hate this bill, and I hated the bill we had Monday. I hate this bill a little less,” Yarmuth said. The Kentucky freshman said he has a “fairly low level of confidence” that the bailout will work but nevertheless believed “the risk of doing nothing is far too great to take.”

Tory Newmyer and Emily Yehle contributed to this report.