Election Year Pressure Mounts, House Passes $700 Billion Rescue Bill

ImageOnce some House members who are up for reelection were given political cover, by a bill which contained minor improvements, they got in line and voted for the bailout/rescue bill by a margin of 263-171. Over 90 Republicans voted for the bill. The big question is what changed their minds?

As usual, it was the crisis hitting home before the politicians were willing to act. Member after member stood up and told stories about small businesses in their districts who can’t get credit, and won’t be able to meet payroll without this bill. The other jolt to House members was that the state of California can’t get credit and the state was going to be in danger of not being able to make payroll at the end of the month. This crisis was no longer about Wall St., but Main St., and Main Street is where the voters live.

What changed was perception. The Congress was longer seen as helping out the greedy people on Wall Steeet, but small town Americans and farmers. Is the bill really that different from the one that failed on Monday? No. What changed is that the crisis of confidence spread from markets to the kitchen tables. A loud and vocal group who got behind this bill were older Americans who are seeing their retirement accounts vanish.

Polls of House members taken before the vote, showed that up to two dozen no votes switched to yes. Why the members who are up for reelection changed their votes is because if they voted no, and the economy got worse, they would have to go back to their districts and explain why they didn’t do anything. At the end of the day, the drama this week was not about the economy, or the financial crisis, but it was election year politics that first rejected the bill, then propelled it to victory. The bill has already passed the Senate and will be quickly signed by President Bush.

One Reply to “Election Year Pressure Mounts, House Passes $700 Billion Rescue Bill”

  1. I propose that the federal government suspend all taxes on gasoline now paid by the American people — from Memorial Day to Labor Day of this year. The effect will be an immediate economic stimulus — taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up. Over the same period, our government should suspend the purchase of oil for the Strategic Petroleum Reserve, which has also contributed to the rising price of oil. This handbags wholesale handbags measure, combined with the summer-long “gas-tax holiday,” will bring a timely reduction in the price of gasoline. And because the cost of gas affects the price of food, packaging, and just about everything else, these immediate steps will help to spread relief across the American economy,” McCain said.

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