Update: Government Officials Speak Out On Bailout Plan Defeat
Wednesday, October 01, 2008
The House's surprising rejection of the financial sector rescue proposal sent stocks tumbling yesterday afternoon, triggering one of the worst market days in history and stamping out more than a trillion dollars in shareholder wealth. By mid-afternoon today, though, U.S. stocks had risen the most they had in six years, amid growing expectations that lawmakers will salvage their $700 billion package to rescue the nation's banks.
Following yesterday's bump on the road to economical rescue, Congressional leaders, President Bush, and both presidential hopefuls all attempted to assure the investment community and the American people that the government's bailout plan, although stalled, is not yet dead.
White House spokesman Tony Fratto told reporters that the White House is optimistic lawmakers will reconcile their differences over the $700 billion plan and pass the legislation. He said the administration will examine all measures to increase support for the package, but would not endorse any changes to the “core” principle, allowing for the purchase of troubled mortgage assets from financial institutions.
In a statement to the press, Treasury Secretary Henry Paulson said he was disappointed with yesterday's outcome, but remained committed to working with congressional leaders to “find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people.”
Senate Banking Committee Chairman Christopher Dodd (D-Connecticut) said he is “hopeful and optimistic” that lawmakers will soon reach a compromise on the legislation, noting that some House members are having “serious second thoughts” about rejecting Monday's bill. Dodd told reporters that a new proposal may include expanding the authority of the Federal Deposit Insurance Corporation (FDIC).
Democratic presidential candidate Barack Obama told a crowd at the University of Nevada in Reno today, “This is no longer just a Wall Street crisis – this is an American crisis, and it’s the American economy that needs this rescue plan.” He urged taxpayers to abandon earlier reservations and get behind a revised bailout package, saying that without one, widespread recession was inevitable and Americans' retirements could disappear.
Like Obama, The Republican party's presidential nominee John McCain sought to drum up taxpayer support for the initiative, and he demanded that Congress renew its commitment to resolving the financial crisis. “I am disappointed at the lack of resolve and bipartisan good will among members of both parties to fix this problem,” McCain said. “Bipartisanship is a tough thing; never more so when you’re trying to take necessary but publicly unpopular action. But inaction is not an option.”
Both candidates in speeches today have proposed raising the FDIC's federal insurance limit to $250,000. They argue that the increase would raise confidence in the stability of the nation's financial institutions, provide added assistance to small business owners, and help to shore up the U.S. economy.
Congress is expected to convene again on Thursday, with a Senate vote on a revised bill possible.
Following yesterday's bump on the road to economical rescue, Congressional leaders, President Bush, and both presidential hopefuls all attempted to assure the investment community and the American people that the government's bailout plan, although stalled, is not yet dead.
White House spokesman Tony Fratto told reporters that the White House is optimistic lawmakers will reconcile their differences over the $700 billion plan and pass the legislation. He said the administration will examine all measures to increase support for the package, but would not endorse any changes to the “core” principle, allowing for the purchase of troubled mortgage assets from financial institutions.
In a statement to the press, Treasury Secretary Henry Paulson said he was disappointed with yesterday's outcome, but remained committed to working with congressional leaders to “find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people.”
Senate Banking Committee Chairman Christopher Dodd (D-Connecticut) said he is “hopeful and optimistic” that lawmakers will soon reach a compromise on the legislation, noting that some House members are having “serious second thoughts” about rejecting Monday's bill. Dodd told reporters that a new proposal may include expanding the authority of the Federal Deposit Insurance Corporation (FDIC).
Democratic presidential candidate Barack Obama told a crowd at the University of Nevada in Reno today, “This is no longer just a Wall Street crisis – this is an American crisis, and it’s the American economy that needs this rescue plan.” He urged taxpayers to abandon earlier reservations and get behind a revised bailout package, saying that without one, widespread recession was inevitable and Americans' retirements could disappear.
Like Obama, The Republican party's presidential nominee John McCain sought to drum up taxpayer support for the initiative, and he demanded that Congress renew its commitment to resolving the financial crisis. “I am disappointed at the lack of resolve and bipartisan good will among members of both parties to fix this problem,” McCain said. “Bipartisanship is a tough thing; never more so when you’re trying to take necessary but publicly unpopular action. But inaction is not an option.”
Both candidates in speeches today have proposed raising the FDIC's federal insurance limit to $250,000. They argue that the increase would raise confidence in the stability of the nation's financial institutions, provide added assistance to small business owners, and help to shore up the U.S. economy.
Congress is expected to convene again on Thursday, with a Senate vote on a revised bill possible.
