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September 29, 2008

Bailout bill fails; Dow plunges

The fate of the Bush administration's $700 billion financial bailout plan was abruptly thrown in doubt Monday as a House vote turned against the controversial measure.
The next steps were not immediately clear but supporters were scrambling to put it up for another vote.
What was supposed to be a 15-minute vote stretched past the half-hour mark as leadership scrambled for support.
Investors who had been counting on the rescue plan sent the Dow Jones industrial average down as much as 700 points while watching the measure come up short of the necessary support, before rebounding slightly. The key stock reading was down more than 500 points.
The measure needs 218 votes for passage, but it came up 13 votes short of that target, as the final vote was 228 to 205 against. About 60% of Democrats voted for the measure, but less than a third of Republicans backed it.
President Bush is "very disappointed" by the House vote, his spokesman Tony Fratto said.
A four-hour debate included impassioned pleas for and against the measure from Democrats and Republicans alike. Even some of those arguing the legislation must be approved were quick to point out problems with it.
But in the end, the vote began with both Democratic and Republican leadership telling their members the only way to protect the economy from a spreading credit crunch was to vote for the difficult to swallow measure.
"Our time has run out," said Rep. Spencer Bachus, the ranking Republican on the House Financial Services Committee. "We're going make a decision. There are no other choices, no other alternatives." source

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