Given a second chance, the United States House approved a $700 billion package designed to shore up the financial sector and loosen up the credit markets.
The House stunned Congressional leadership Monday by rejecting a measure hammered out the weekend before. Leaders managed to only get 205 votes, with 228 members voting against. The Senate revised the bill and returned it to the House which today approved it on a 263-to-171 vote. President Bush already has signed the measure.
The Missouri delegation had voted against the measure on Monday by a one-vote margin. One member of the delegation, Kansas City Congressman Emanuel Cleaver (D), switched his vote, tilting the Missouri Congressional delegation to favor the package 5-to-4. Voting in favor were Democrats Russ Carnahan of St. Louis, Ike Skelton of Lexington and Cleaver as well as Republicans Roy Blunt of Strafford and Jo Ann Emerson of Cape Girardeau. Voting against the package were Democrat Lacy Clay of St. Louis along with Republicans Todd Akin of St. Louis, Sam Graves of Tarkio and Kenny Hulshof of Columbia.
Blunt is the Minority Whip in the House, the second ranking Republican. He became involved in the negotiations last weekend. Blunt had stated one of the problems that led to defeat Monday was that the House rushed the vote. Senate leaders added $110 billion in incentives to the package in an effort to lure enough votes to pass it. Most of the additions extended business tax breaks in an effort to lure reluctant House Republicans. Other additions drew in Democrats as well.
The core of the package gives the US Treasury the authority to buy so-called toxic assets from financial institutions, allowing them to clear those assets from their books to shore up their bottom line. Many financial institutions have been caught with assets which have eroded considerably during the sub-prime mortgage crisis, threatening their stability. The situation reached a critical mass and froze the nation’s credit market.
Supporters insist that provisions have been added to protect taxpayers. Some even predict that the government could more than recoup the money by selling the assets later. The Treasury will not receive the total amount at once. The bill authorizes $250 billion immediately. Upon certification that more money is needed, $100 billion would be released. The final $350 billion dollars could be dispersed by the Treasury, but Congress would have the right to object to its use.