After two weeks of debate, Congress passed the massive $700 billion rescue plan this past Friday, Oct. 2 to help the United States economy avoid further disaster. The measure passed with a 263-171 vote in the House and a 74-25 vote in the Senate. This passage follows a previous rejection in the House on Monday, Sept. 29, when the measure was voted down by a margin of 228-205. Wednesday’s vote in the Senate was given to an altered and revised bill that included tax breaks and tax credits; these revisions included the research and development tax credit, incentives for renewable energy resources, tax breaks to disaster victims and equivalent benefits for those who have mental health problems.

The federal government will have greater oversight on Wall Street transactions and CEOs of companies who will receive help from the federal government will not be overcompensated. Also, as assistance to smaller banks with liquidity problems, the Federal Deposit Insurance Company's (FDIC) ceiling for federally insured deposits was raised from $100,000 to $250,000, a 150 percent increase.

The rescue plan was immediately signed into law by President Bush. Treasury Secretary Henry Paulson said after the House vote on Friday that he already had staff working out details and that he was contacting economic advisers outside the government to begin the task of getting money to flow.

President Bush was optimistic yet cautious when talking about the economy’s future. “While these efforts will be effective, they will also take time to implement,” Bush said during his weekly radio address this past Saturday. “My administration will move as quickly as possible, but the benefits of this package will not all be felt immediately. The federal government will undertake this rescue plan at a careful and deliberate pace to ensure that your tax dollars are spent wisely.”

This latest piece of legislation will allow the federal government to buy toxic assets from struggling financial institutions. It is hoped that confidence can be restored in the economic markets and that credit will once again become available. Once credit becomes available, community banks will be able to loan money and businesses will be able to borrow the funds necessary for payrolls and investments. Also, individuals could obtain credit to purchase a home or vehicle.

However, news is not all good on the home front. Currently, nine-million Americans are unemployed and 159,000 jobs were lost in the month of September alone. Wall Street dropped another 157 points on Friday as a result of the news of another month of increased job losses which overshadowed the passage of the rescue plan. Although the rescue plan was voted and signed into law, it was not met with overwhelming favor. At the time of the first rejection, 95 Democrats and 133 Republicans voted against the bill. This was in response to the numerous calls and messages from angry constituents at home. Many opponents felt that this plan was nothing more than a $700 billion donation to Wall Street while the average Americans were receiving little, if any, help.

It took a combination of new additions to the original bill and lobbying by prominent political figures and business leaders to pass the rescue plan through. “I've never talked to as many bank presidents in my life," Rep. Joe Knollenberg said.

California Gov. Arnold Schwarzenegger sent a letter warning that without some type of solution to the nation’s economic woes, states, including California, “may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal Treasury for short-term financing."

Democratic presidential nominee Sen. Barack Obama was able to convince 13 members of the Congressional Black Caucus and a conference call to persuaded nine freshmen Democrats to switch their votes from 'no' to 'yes'. He stated to the Democrats that an economic stimulus bill would be a top priority if elected.

"It's disgusting that we would ever be brought to this floor to cast this vote," Rep. Zach Wamp said, who also changed to a 'yes' vote. "Congress has to act. We are out of options. Hold your hand over your heart and vote 'yes'."

Still, not all are convinced with the bill and its potential. "The Treasury plan throws an ungodly amount at Wall Street," expressed Rep. Marcy Kaptur. "This is just an end run around, right before an election. Pray for our republic."

According to lawmakers and financial experts, it will take some time before we see any positive results from the passage of the rescue plan. Now, America has to wait and see.

Published: October 8, 2008 12:18 PM