House Kills Financial Bailout Bill, Global Markets Tailspin

(Us News and World Report) Media reports are describing yesterday's 228-205 House vote against the financial bailout plan as a stunning surprise that adds to the uncertainty and sense of gloom surrounding the world's economy. On ABC World News, George Stephanopoulos mused last night, "You had this economic crisis, the market's bearing down, you had the President of the United States, the Speaker of the House from another party, united Congressional leadership across the board, and both presidential candidates giving cover, and the bill still went down. We have never seen anything like this." Moreover, NBC Nightly News reported, "Congress has left town for the Jewish holiday. There is no plan."

A number of media analyses are attempting to determine what will be the next step as President Bush and Hill leaders try to move the debate forward. The Financial Times says "the best hope for supporters of the bail-out on Capitol Hill and the Bush administration for the time being appeared to be that rank-and-file House Republicans," but "if House Republicans still cannot be brought on board, the administration may have to turn to the Democrats, offering concessions to make up for pressing ahead with the legislation unilaterally. These concessions could start with dropping the White House veto threat on a second economic stimulus bill, and reinserting provisions such as bankruptcy reform and directing 20 per cent of bail-out profits to an affordable housing fund which were stripped out on Saturday night." The Wall Street Journal reports that "for now," Speaker Pelosi "is committed to a 'bipartisan bill,' a Democratic leadership aide said."

On NBC Nightly News, CNBC's Steve Liesman said, "Just so you know, I spoke with the White House this evening. They were meeting with House and Senate leaders again looking for that unknown way forward here," and one "idea is maybe the Democrats do something on their own with all the stuff they wanted." Newt Gingrich, appearing on Fox News' On The Record last night, also predicted that Pelosi is likely to introduce another version of the bill later this week that will garner more Democratic support by stripping elements added by Republicans and adding others that will appeal to liberals. In an editorial, the Wall Street Journal also cautions Republicans about that possibility.

House Leaders Also Ponder "Senate Option." The Politico, meanwhile, says "congressional leaders" are also considering other "ways to recover -- possibly by starting anew in the safer Senate." Rep. Rahm Emanuel, chairman of the House Democratic Caucus, told The Politico, "The Senate should go first: Act on this bill, attach it to another and send it back to the House." The Politico adds "the Senate option is one that House Financial Services Committee Chairman Barney Frank (D-Mass.) had considered even before Monday's defeat. And while making no commitment, Senate Minority Leader Mitch McConnell (R-Ky.) did not rule out working with Democrats to facilitate quick consideration."

Mark Wahlstrom..."Where is Your Money Safe Now"?