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September 29th, 2008
09:00 PM ET

Evening Buzz: Bailout Rejected

Republican leaders speak to reporters on Monday after the bailout bill failed to pass.

Republican leaders speak to reporters on Monday after the bailout bill failed to pass.
Maureen Miller
AC360° Writer

Whoa! My advice: Don't check the 401K plan. Stocks sank 778 points today, the worst single-day point loss ever. Here's another tough reality: investors lost $1.2 trillion, the most ever in one day. The deep decline came after the House rejected the $700 billion bank bailout plan.
 
How did it get this bad? It depends on who you ask.

Republicans and Democrats are pointing fingers at one another.

It's sorta like when you ask your kids, "Who broke the lamp?" And, each child blames the other.
But, in this case, trillions of dollars are at risk.

Here's some of the blame game for you.

House Republican leaders say Nancy Pelosi, the Democratic speaker of the House, caused the vote to fail. "The Speaker had to give a partisan speech... that poisoned our caucus," said Rep. John Boehner, the House minority leader in a news conference after the vote.

The number-two Democrat in the House, Rep. Steny Hoyer, rejected that accusation as "absurd."

Rep. Barney Frank, the House Democrats' main negotiator on the bill, was even more critical.

"Because somebody hurt their feelings, they decided to punish the country?" Frank demanded, saying the explanation was an excuse. "I don't believe they had the votes. They are covering up the fact that
they don't have the votes," he said.

Do you think the House should have approved the bailout or did it take the right step?
We'd love to hear your thoughts.

Tonight, we'll have all the angles on this ugly day on Wall Street. From the politics to your pocketbook, find out what this means for you and America's economy.

Hope you join us at 10pm ET.


Filed under: Maureen Miller • The Buzz
soundoff (202 Responses)
  1. MRGMAN

    If our elected members of Congress forgot the knowledge of the past let me give them a taste of what might happen in the near future.

    The Great Depression of 1929-33 was the most severe economic crisis of modern times. It began with a catastrophic collapse of stock-market prices on the New York Stock Exchange in October 1929. This resulted in the lost of market value and the collapse of many financial institutions, banks, and not to mention the lost of millions of jobs in the United States and around the world.

    It looks to me that the members of Congress “Do not get it”. They better do something quickly to resolve this economic crisis or on November 4th they are going to “get it” – a vote right up their butt and out the door.

    September 29, 2008 at 11:05 pm |
  2. SueAnn, Eugene

    I am sick of hearing the blame game on all these shows. Frankly, I think We (the people) have won one here. How about doing some investigative reporting and look for some other options? Use this "ah ha" moment to figure it out. "We" are pissed off; "We" don't believe or trust you. "We" have paided enough!

    September 29, 2008 at 11:04 pm |
  3. Lilibeth

    I actually was brave enough to check my 401k today. I'll continue to contribute, but I'll reduce my contributions and change future allocations to invest in money market funds only. Luckily, I have many years to go before retirement. I feel sorry for those folks who depend on this money now.

    September 29, 2008 at 10:58 pm |
  4. deb in az

    the reason why this bill didnt pass is that the people of the country that they represent dont want this bill to pass.....its called we the people that elect these congressmen and women......they had enough democrats to get this bill through, but even the a great deal of the democrats want to be elected again.....nancy p is just a way left wing nut that will probably be removed as speaker of the house not long from now.....the democrats as well as the republicans share a ton of blame for this mess......for her to blame the republican party is outragious........bush wanted to put stricter regulations on fannie mae and freddie mac back in 2000..good old barney frank said that they were just fine and not in trouble when in fact guess what they were......i say write a bill that leaves us we the people out of it and leave out the pork, no extras for their lobbies that they have to answer to........for once congress represent us we the people and not yourselves

    September 29, 2008 at 10:58 pm |
  5. Bret Peters

    Simple. A house divided will fall. It fell today with the market. God help us all.

    September 29, 2008 at 10:57 pm |
  6. Donna A. Reuter, Bremerton, WA

    I want the politician who are responsible for creating the crisis, Reagan Republicans and neo-cons, charge with treason. Their policy of dismantling President Franklin Roosevelt's New Deal, proved that they don't place the United States of America first, their allegiance is to special interest groups and big business. What they have achieved is to destabilize this nation's economy, which threatens the national security of the USA.

    Furthermore, I challenge anyone to show me where in Constitution of United States of America does it give anyone permission to bankrupt the nation by taking revenue that is necessary to operate the nation by cutting taxes.

    If there is a bailout, every tax cuts that has been passed by Congress, must be recsinded. That money is need to fund the bailout, also Katrina/Rita/Gustav/Ike recovery, wars in Afghanistan and Iraq.

    September 29, 2008 at 10:54 pm |
  7. John Mason

    I am completely annoyed by the lack of leadership upon our elected officials in the House and Senate. I can't beleive our elected officials are concerned more about being reelected instead of what is best for the American people and economy. The President did a poor job of explaining how dire this econonic crisis is and the absolute need for this bill to pass. The intent of the plan is being labeled as a bailout, and I believe this is completely false. There is plenty of capital out in the market, but many of the financial institutions do not want to lend it out becuase the fear of losing it is to great of risk. The purpose of the financial plan is to buy up the bad debt that is clogging up the credit market so that the banks and financial institutions will begin lending to each other. I beleive if the President and our elected officials would frame the need for the plan this way, the necessary votes needed to pass the bill will come.

    September 29, 2008 at 10:50 pm |
  8. ROBERT BROWN JR, Warner Robins, Ga

    do congress members own a 401k and do they invest or own stock in the stock market since most Americans have such in the Country's lost of $1.2 trillion.

    September 29, 2008 at 10:49 pm |
  9. Steve

    Which financial entities are benefiting from this "crisis"? That $1.2 Trillion was absorbed somewhere. I have always been under the impression that these situations are scientifically manufactured. Another question. Doesn't flooding the economy with $700 billion create a bubble? If it does, isn't that like putting a band-aid on severed limb?

    Thanks for your time.

    September 29, 2008 at 10:46 pm |
  10. Jaime M. Mesa,AZ

    I do not think either of our esteemed Senators running for President ever dreamed that we would see how "broke" Washington is. Politics as usual and taking the Holiday? There have been Special Sessions for less. Who is willing to put aside petty politics and save the day? Hello? Anyone?

    September 29, 2008 at 10:45 pm |
  11. Bret Peters

    It seems that all the major issues with the original bill were met in some way to protect the American tax payer, put a reasonable limit on golden parachutes, and the formation of two independent oversights. We all need this help immediately. We lost over a trillion $ in one day, credits are frozen, more job losses are on the way. 700 billion, for the long term, meeting the basic concerns is worth the risk. Taking no immediate action is not a risk, but immediate loss for main-street. Both sides of the house need to grow up.

    September 29, 2008 at 10:44 pm |
  12. Jeff Hildebrand

    Isn't this the perfect ground work for the introduction of the Amero?

    September 29, 2008 at 10:44 pm |
  13. FRAN

    Bailout—Credit freeze-Economy coming to a standstill or worse!
    Why is not the discussion about our apparent total dependence on credit?
    If our economy is totally dependent on credit there is no hope for us. It’s just a matter of time

    If you are worried about your 401K and any stock holding loosing value just wait awhile.
    When we raise taxes on corporation do you think that extra cost won’t be passed back onto us?
    The cost will be in the form of reduced returns on our investment or higher cost for the products
    and services of corporations. Either way, it’s just a sneaky way to increase our individual taxes.

    September 29, 2008 at 10:44 pm |
  14. Vicki from NJ

    I don't understand why there aren't built-in FDIC type protections for 401k's as there are for banks holding our money, especially when you could lose everything in an instant, since it's all virtual monies. It's a total disgrace, but our government created this 401k theory and sold it to us way back saying it's a great way to invest our money for retirement. It's only good for young folks just starting out who (if they lost everything) would have to depend on time to have it regrow, but even they would still have lost money. So, what's so great about 401k's?

    September 29, 2008 at 10:43 pm |
  15. Jerrold Peterson PhD

    The House of the U.S. Congress should be ashamed of their actions today. The second Great Depression has begun and all the King's men will not be able to stop it. Following a decade of unemployment rate of 25%, WW III will ensue as many as 2 Billion people will die before it ends. Those in Congress who voted today to save their jobs will face the 200 million souls who died because of WW II and they will say, "GO TO HELL! You learned nothing from our sacrifice." Maybe those religous Republicans should act to save their souls. Jerrold Peterson Professor of Economics Emeritus University of Minnesota, Duluth. Oh by the way this is one Republican elephant voting for Obama

    September 29, 2008 at 10:40 pm |
  16. john

    how soon we forget. I`ve been a mover for 15 years, I have never seen it this dead. and It is going to get worse because some in congress had to prove a point

    September 29, 2008 at 10:34 pm |
  17. Keith S

    It was blind ideological deregulation that allowed investment and insurance executives to take as personal bonuses money that should have been held in reserve against changes in the market.
    The people that run Wall St companies acknowledge they are greedy. They described the derivates they sold as “pure profit” to their boards of directors. Calling them “pure profit” meant far bigger personal bonuses. Why did the counterparties to these derivatives spend money on them if there was no risk.

    You have to restrain the arsonist and put out the fire before you rebuild the kitchen.

    Bailing out Wall St before restraining the greedy executives who looted their firms is a total waste of taxpayer money. It won’t end the chain of disasters.

    Restraining the greedy executives will hardly take any time at all. So do it, and then do the bailout.

    September 29, 2008 at 10:32 pm |
  18. David B. Wilson

    Let's begin a petition drive in all states to place congress persons and persons in the administration on Social Security and reduce their pensions by 50%. That's about what we retired persons have lost in our portfolios.

    September 29, 2008 at 10:32 pm |
  19. David Kern-Lyons

    Well this has been an up and down day in most every cornner of the world. Can't say that it is a surprize though. Haven't really got a handle on the whole mess but every action has a responsibility that needs to be fessed up to and banks and Walstreet are not immune too those responsibilities. For all of the greed that banks and mortgage companies have been reapping over the last decade they are paying the price now and taking American and world ecconomies with them for the ride down.

    It should be a ripple effect through most of the countries industries and basically it will through Obama in the White House with a majority in both the house and Senate. But I really don't see either Obama or McCain stopping this train from hitting the station. The vote today has fussed the break on the runaway train and it will hit the station at full speed. Even if by the train is derailed the damage that will occure with the train coming to a stop will be felt for months if not years.

    In the next few weeks you will see banks go under or get bought up by those that haven't had quit the exposure but not all will be blessed to be the one's bought. Even that money will have a stopping point. I would expect that the government will come up with some sort of a plan that "might work" but I think the best thing is to let the dog shack off the water from the pond and start to rebuild after the fact. Probably the best "paln" that congress could do is to start drafting the policy so that this doesn't occure again through banks and Walstreet greed.

    September 29, 2008 at 10:30 pm |
  20. Hugh Thompson

    Every citizen poll I've seen today/tonight has resulted in an overwhelming vote supporting the House action defeating the bailout. I agree with this sentiment. Why is it that our citizens are saying no to the bailout, but the politicians and pundits and experts say it should be passed? Aren't the experts listening to what the people desire? And if not, why not? And, I am sick and tired of watching each party member bash the other. Isn't it about time that our "LEADERS" start working together to get something positive done? At present I don't think it makes one bit of difference who is elected President. This may be the first time in 31 years that I do not vote for a presidential candidate because it isn't going to make one bit of difference who wins.

    September 29, 2008 at 10:29 pm |
  21. jean

    I can't believe what has happened. Do the house republicians not understand that we are on the brink of another Depression if nothing is done? And the fact all now all of gone home, for what to allow our economy to completely fail? I am very concerned that there are nations out there that may take advantage of this crisis and attack america. How will we defend ourselves if we get attacked again in our weaken state? Do these House republicians not have a clue?

    September 29, 2008 at 10:29 pm |
  22. Going Broke!

    BLUF! Both Democrats and Republicans in the house were elected to represent the people....and in time of need, are expected to work as long as it takes to save our Country. Heck Thats What they get paid to do!! And they want to take a holiday break? They put themselves first instead of the Country. We know now who not to vote for when it is time for their relection.

    September 29, 2008 at 10:28 pm |
  23. Joe

    If McCain or Obama want to win overwhelmingly, here is what they should commit to at the next debate.

    They will pass the $700B bill within 30 days after entering office. They will pull out of Iraq within 30 days, yes 30 days, after that in order to help save $10B per month to offset the $700B and the earlier $85B bailouts. The only way we would stay in Iraq is if Iraq pays us every month in advance. They will review every other foreign entity that we are supporting with the goal of possibly stopping financial aid within 30 days. America must first be able to feed itself and take care of itself before it takes care of the rest of the world. It really is as simple as that.

    The world will understand. Whomever is brave enough to make this commitment and follow through will be the next President of the United States of America. And a great President at that.

    September 29, 2008 at 10:28 pm |
  24. Jim Langley

    Americans get it. Congress does not. Americans do not trust Congress. 15% approval ratings reflected a sentiment, but without definition. NOW, there is definition, and Barney Frank and Chris Dodd abdicated their responsibilities. Americans want someone in Congress to "feel their pain" and pay with their job. Pick 2 Dems and 2 Repubs and tell them to act in the country's interest and resign for their admitted failures. THEN the people will accept a "bailout."

    September 29, 2008 at 10:27 pm |
  25. James Thorne

    Paulson just wanted to give a huge sum of money to his friends on Wallstreet and he would have become a very, very powerful figure who would never have been adequately supervised and he would be long gone before the verdict is in about whether his plan had any positive effect, in fact, on the credit markets. I think the suborning of panic in the markets by the President, Bernanke, Paulson, Congressmen, and the Media has been the most shameful behavior I've seen from public officials and reporters. Isn't it illegal for a trader to start promulgating panic in the markets or starting a rumor that a company is failing. These people were all starting rumors that the markets would all fail. And Paulson and Bernanke, Bush and many Congressmen and reporters were all acting like we just didn't have time to even read Paulson's two page law that basically said"just give me a trillion and never ask what I did with it" That was just the most ridiculous thing I have ever heard. You don't just sign over a trillion dollars to someone with no oversight. The trillion that was lost today might come back tomorrow or next week but the trillion that we would have signed over to Paulson would have just gone into the balance books of Wallstreet firms and we still wouldn't have had any real assurances that the credit markets would be better.

    September 29, 2008 at 10:25 pm |
  26. Jaime M. Mesa,AZ

    Where are our leaders? So, you want to be President? Step up history is waiting. True leaders are the ones with the right stuff at the right time. The U.S. Of A, and the world are waiting. Enough talk, show us your stuff. This is it. Who is going to rise above and lead? No blame, we need solutions NOW.

    September 29, 2008 at 10:23 pm |
  27. Debra Lusk

    It is not time to babysit those who are irresponsible. For those who live within their means things will be okay. Accept this as a challenge and a lesson. EARN what you need and want – Pay as you go. People should help people. So why does the government need to bail out the big guys? It is true that the Democratic Party has been the majority. Right?

    September 29, 2008 at 10:22 pm |
  28. Al

    This is a controversial bill and Democrats pass it by themselves. If the bill does not work, Democrat will be blame for this in the long run. This bill must be passed both parties.

    September 29, 2008 at 10:21 pm |
  29. Dean

    Why should all the peoples of the world lose a lot of their personal money because American companies did improper things to allow Americans to get mortgages when they should not have qualified? Has the shoe been on the other foot recently and I am not aware? I did nothing wrong. I didn't vote into office those that did this and yet I am sure paying for it.

    Cheers,
    Dean

    September 29, 2008 at 10:21 pm |
  30. Bret Peters

    All parts of this branch of or government needs to grow up ! The American and world markets need action. Not name calling. The credit freeze is now real, and our immediate future is dim. Wake up America, do your home work. We lost over a TRILLION $ today, 700 billion is nothing in comparison for the long term. The lose of jobs are real.

    September 29, 2008 at 10:21 pm |
  31. r J STOLL

    What is wrong with channeling the 700 billion through the masses?

    Peple then could pay heir mortgage, raise house values, and bail out the banks.

    Because of the multiplier effect of channeling through the masses ... 700 Billion could have the effect of 7000 billion or more.

    We could have .immedite and massive grants and loans for samll business to create jobs, public works for infrastructure, ztudent loans and loan foregivness etc

    Giving it to the banks will not help the home owner,etc.

    September 29, 2008 at 10:21 pm |
  32. lucy

    The Republicans decided that they could ignore what we learned in the Great Depression and pass the Gramm-Leach-Bliley Act in 1999. It allowed our banks with our checking accounts and saving accounts merge into investment and securities firms and insurance companies. This means that our savings account and checking accounts have ended up the stock market just like it did in 1929 as corporation assets. Sure FDIC will pay us if they the corporation goes belly up, but the taxpayer pays FDIC. If this thing blow up how can we survive? The more FDIC pays off the more FDIC has to come back to the very people the just gave the money to pay others. Where is the safety net?. It sounds like we are in free fall???

    September 29, 2008 at 10:20 pm |
  33. kenneth swanson

    to suggest that desires and knowledge of average american citizens of the intricacies involved with the decision of the bail out of wall street is ridiculous. If the average american had the ability to make such decisions then I fail to see why we need congress, the senate or the so called experts who strongly advised we needed such a bill. I an average american citizen would like to see all those who caused this fiasco and orchestrated the do nothing position to join me out here on main street and live with the results of their positions.

    September 29, 2008 at 10:19 pm |
  34. Tom

    When did conspiracy, fraud, and racketeering cease being crimes? People, not companies, made conscious decisions to bundle what they knew at the time to be worthless mortgages into securities which they then sold as bona fide investments.

    Before we throw tax money at crooks, the Fat Cats need to trade their Golden Parachutes for Silver Bracelets.

    September 29, 2008 at 10:19 pm |
  35. bcdavis

    All the tilt seems to go against the majority in the house composed of both parties that voted this trash bill down.

    McCain and Obama are wrong.

    Fix your dog. For every dollar of bailout, nationalize two dollars worth of the yachts, cars and real estate the lying thieves who engineered the bad loans made doing these bad deals. The loans that any responsible American shunned like the plague.

    For 230 years people have bled for this country now it comes to this? WE need to fork out $700 billion to these people or go broke?

    Let's try broke, clean the slate and start over.

    BAILOUT??? WE DON'T NEED NO STINKIN BAILOUT.

    September 29, 2008 at 10:18 pm |
  36. Joy in Seattle

    The House DID THE RIGHT THING! Stop trying to push this bailout that the citizens of this country don't want! We don't want this!

    We know it's going to hurt. The people of this nation know that it will hurt no matter what, but we don't believe that this will improve unemployment, improve our lives.

    September 29, 2008 at 10:17 pm |
  37. steve jones

    My take on the failure of the bill sent to congress today is simply that it was Marketed improperly to the American citizen. Using the terminology "Bailout" sends a very skewed message and ultimately makes it apppear as a huge financial bandaid to those who are in the 5% Income bracket of wealthy investors that may have been unscrupulous. If the plan had been labeled as an Economic Stimulus
    in contrast to the rebate plan earlier this year, which should have been denoted as just that. The Bush administrations thought process that this influx of cash to the consumer would jump start the economy was a major flaw.

    September 29, 2008 at 10:14 pm |
  38. kim

    People choose to be literal when they want. Barney says the Republicans voted the bailout down because their feelings got hurt by Pelosi. Gee how gullable can you be, have some common sense. Several Democrats voted it down too. Facts are what counts, not unproductive rhetoric. I'm not sure this bailout is right, or a solution to our problems. Several top economists say it would be bad to go this route and at most a temporary bandaid. With people pulling their investments out in a panic makes us look really bad. I am choosing to hold steady, I'm diversified and will take a hit. I will survive, if nothing else I'm resilient and an american. Hang on to your panties, we are in for a ride.

    September 29, 2008 at 10:14 pm |
  39. Ken Palosi

    Everyone is talking about the anger on Main St. It is an anger grown out of the frustration that we who were not a part of the culture of greed that brought us to this point are going to suffer no matter what happens. In other words we on Main St. are "damned if we do; damned it we don't." The arrogance of Secretary Paulson who in effect has told the American people that we have to do this; we have to do that in order to rescue a bunch of big-time economic plunderers raises the ire of a people too long subjected to the caprices and whimes of the power brokers in Washington.

    September 29, 2008 at 10:14 pm |
  40. Al

    What are the priorities for Republican Party? Was it Ms. Pelosi's remarks or US economy or threat of economic rescission?

    September 29, 2008 at 10:14 pm |
  41. Dulcie

    While I might agree something must be done, I think the bill as it was presented was way too much of a sweetheart deal for Wall Street. I'm not against regulation per se, but that bill was pretty horrific for the average American.

    I guess I'm not heartbroken that it didn't pass. Then again, I don't really have anything to lose. No stocks, bonds, credit cards, etc.

    September 29, 2008 at 10:14 pm |
  42. Henock

    I think the best way to take care of the situation we are in now is by wisely spending the 700b as follows:

    It is safe to assume that homeowners facing foreclosure can actually take care of their mortgage if some of the 700b is used to buy down their newly reset mortgage interest rates back to the original rate. In exchange for that the homeowners should be required to pay higher sales tax when they sale their home for profit. This will restart the economy since homeowners will be paying for their mortgages.

    September 29, 2008 at 10:13 pm |
  43. Tammy

    So, let me get this straight.....a few Republicans get their feelings hurt by a speech so they're going home? Seriously? Is this the 3rd grade? I cannot believe that this is happening while the country continues to go to hell.

    Unbelievable..........unbelievable.

    September 29, 2008 at 10:13 pm |
  44. Rebecca Jurgerson

    Alot of people say they are not worried because they don't have credit cards or 401ks. People understand your employer uses credit to pay you. No credit. No paycheck. Tell your congressmen to vote yes. Don't wait for your employer to close the doors where you work. Then what are you going to do?

    September 29, 2008 at 10:12 pm |
  45. David Low

    Unbelievable, the nation's and the world's financial systems are in a freefall and all congress can do is to take two days off for the Jewish holiday. No disrespect to the Jewish nation but I think this is more important. Even Ben Stein had the same sentiments. No wonder Washington has to be cleaned up.

    September 29, 2008 at 10:11 pm |
  46. ed mcfarland

    there does not seem to be a real reason for the total slide in the stock market. nothing has changed since fri. except congress did not give them 700 billion dollors to bail thier asses out. could this really be no more than a slap in the face of the gullible american public. "that will teach them a lesson" i truly wish we could let it all fail and i would open windows on the 25th floor for some of the big money swingers
    ed

    September 29, 2008 at 10:11 pm |
  47. Cathy Sherrill

    I was just discussing co-dependence with my ex. And it struck me how similar this situation was – just cast Wall Street as the dependent and Congress as the Enabler.
    I think today was probably a good thing. Wall Street has to learn they can't take Congress for granted.
    Now offer them 10 cents on the dollar......
    Make sure the rescue really hurts – so they won't even THINK of doing this again!

    September 29, 2008 at 10:10 pm |
  48. Michael Calabrese

    I think that the members of Congress who voted against the bailout today may have saved the country. At least some of those who work on Capitol Hill have a spine.

    Since Secretary Paulson doesn't even try to defend the $700 Billion price tag (they were just looking for a really, really big number?), then I don't see how anyone voted for the bill.
    As the Bush Administration has already devalued the currency, forced down wages and opened the gates for illegal immegration, I figure that this

    September 29, 2008 at 10:10 pm |
  49. Mitch Koep

    How about putting this solution out to the public and see the response?

    September 29, 2008 at 10:10 pm |
  50. Alicia Sefcik

    Since no one can get along for this very important issue . We as americans can easily boot them out of office. Since they can not get this done. I rent an apartment. I don't own a home. All the fat cats should have their salaries and assets frozen and give them a cape cod and a chevy to live with for the rest of their lives. Let them live like the rest of the working class poor. this deal is only for the upper class to save their hides. All of them forgot us little people who live paycheck to paycheck.

    September 29, 2008 at 10:10 pm |
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