House Passes Rescue Bill Despite Some Misgivings
By Katalina M. Bianco, Law Analyst, Wolters Kluwer Banking and Finance Group
In its second vote of the week, the House of Representatives passed the Emergency Economic Stabilization Act on October 30. The crucial vote was 263-171. Most Democrats voted in favor (172 in favor to 63 against), while a slighter majority of Republicans voted against, with 91 voting for the measure and108 voting against it. Every member of the House voted.
The incentives added to the measure since its defeat on September 29, as well as a marked sense of urgency, turned the House around despite the mixed feelings of its members. The measure that the House passed included tax provisions that offer taxpayers more than $100 billion in relief, exempting millions from the Alternative Minimum Tax and providing tax breaks for specific businesses.
The raise in the FDIC deposit insurance limit for depositors in banks and credit unions from $100,000 to $250,000 also helped to convince reluctant House members to pass the revised version of the bill.
However, even as the House approved the $700-billion rescue and more than $100-billion in tax relief attached to it, some lawmakers voiced their continuing reluctance about the measure, calling it a “necessary evil” to address the credit crisis.
The measure also lifts the ceiling on the accumulated national debt, which now exceeds $10 trillion, from $10.6 trillion to $11.3 trillion, a problem for most of the more reluctant House members. Yet still, some chafed at the tax breaks sprinkled into the measure to make it more palatable, including breaks for auto racing and Puerto Rican rum importers.
President Bush, who pressed the Congress to enact a plan first crafted by his Treasury Secretary, Henry M. Paulson Jr., and went on national television and radio to campaign for it, is primed to sign the result of the package that Paulson first rolled out in a three-page outline for the bailout. The original three pages grew to more than 100 in the House and more than 400 in the final Senate package that the House approved.