2008 Woodie Awards
Week in Review: The Americas
Mary Kate Nevin '09 and Kieran Whelan '09
Issue date: 10/2/08 Section: World
United States: Financial Crisis Continues to Unfold
The United States House of Representatives voted on Monday, Sept. 29, to reject the White House's $700 billion rescue plan for the financial industry, sending markets reeling and triggering the Dow Jones Industrial Average's biggest decline ever.
The vote against the measure was 228 to 205, with 133 Republicans and 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans.
Critics of the bill claimed it focused too much on rescuing the Wall Street millionaires while lacking adequate provisions to help "Main Street" recover. It also granted unheard of power to the Treasury Secretary, essentially enabling him to spend all the money unchecked by any legislative or judicial bodies.
The Dow plunged that day, posting a record one-day loss of 778 points and wiping out $1.2 trillion of market value. Wall Street roared back on Tuesday, Sept. 30, however, jumping 485 points as investors bet Washington would revive a new plan to stabilize the markets.
The Senate reviewed a revised version of the bailout plan on the evening of Wednesday, Oct. 1. The initiative passed with a 74 to 25 margin, with both presidential candidates voting in favor.
The revised bill increases the FDIC insurance cap and allows it to borrow from the Treasury to cover any losses. It also continues a host of expiring tax breaks and extends renewable energy tax breaks for individuals and businesses. Finally, the bill includes another year of relief from the Alternative Minimum Tax.
Because of Senate's add-ons, the bill's price tag will be higher than the $700 billion that the Treasury would use to buy troubled assets. Supporters say taxpayers are likely to make back that money in the long-term, though, because the Treasury will be investing in valuable assets that will earn a substantial return.
The easy approval and the new features of the bill made backers optimistic that the House would accept it by Friday and end the legislative uncertainty that has rocked the markets.
The United States House of Representatives voted on Monday, Sept. 29, to reject the White House's $700 billion rescue plan for the financial industry, sending markets reeling and triggering the Dow Jones Industrial Average's biggest decline ever.
The vote against the measure was 228 to 205, with 133 Republicans and 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans.
Critics of the bill claimed it focused too much on rescuing the Wall Street millionaires while lacking adequate provisions to help "Main Street" recover. It also granted unheard of power to the Treasury Secretary, essentially enabling him to spend all the money unchecked by any legislative or judicial bodies.
The Dow plunged that day, posting a record one-day loss of 778 points and wiping out $1.2 trillion of market value. Wall Street roared back on Tuesday, Sept. 30, however, jumping 485 points as investors bet Washington would revive a new plan to stabilize the markets.
The Senate reviewed a revised version of the bailout plan on the evening of Wednesday, Oct. 1. The initiative passed with a 74 to 25 margin, with both presidential candidates voting in favor.
The revised bill increases the FDIC insurance cap and allows it to borrow from the Treasury to cover any losses. It also continues a host of expiring tax breaks and extends renewable energy tax breaks for individuals and businesses. Finally, the bill includes another year of relief from the Alternative Minimum Tax.
Because of Senate's add-ons, the bill's price tag will be higher than the $700 billion that the Treasury would use to buy troubled assets. Supporters say taxpayers are likely to make back that money in the long-term, though, because the Treasury will be investing in valuable assets that will earn a substantial return.
The easy approval and the new features of the bill made backers optimistic that the House would accept it by Friday and end the legislative uncertainty that has rocked the markets.
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