US Bailout Plan Passes First Hurdle
02/10/2008
The United States Senate last night approved, by a whopping 74 votes to 25 majority, the state-funded rescue package for the US economy.
But perhaps the biggest threat to the chances of this bill being rubber-stamped by the House of Representatives is the free market itself. The stock market has been relatively stable this week, rebounding from the 29th September stock plunge immediately following the initial rejection of the bailout plan by the House. The initial bill was seen as a bailout for Wall Street rather than for the economy as a whole, and Representatives were conveying this grass roots feedback from their constituents by rejecting the plan.
However, the bill has now been repackaged and reworded as a remedy-of-sorts for the economy at large, and contains popular measures for the man on the street, including a rise in the government guarantee on individual savings accounts from $100,000 to $250,000. In a bid to lure Republicans, the bill also promises tax breaks for small and medium businesses.
The House of Representatives will find it much harder to say no this time round, and if everything goes pear-shaped following a second rejection, everyone will know where the blame will lie. And with all House seats up for re-election very soon, turning down this politically compromised bill may be a dangerous option.
But perhaps the biggest threat to the chances of this bill being rubber-stamped by the House of Representatives is the free market itself. The stock market has been relatively stable this week, rebounding from the 29th September stock plunge immediately following the initial rejection of the bailout plan by the House. The initial bill was seen as a bailout for Wall Street rather than for the economy as a whole, and Representatives were conveying this grass roots feedback from their constituents by rejecting the plan.
However, the bill has now been repackaged and reworded as a remedy-of-sorts for the economy at large, and contains popular measures for the man on the street, including a rise in the government guarantee on individual savings accounts from $100,000 to $250,000. In a bid to lure Republicans, the bill also promises tax breaks for small and medium businesses.
The House of Representatives will find it much harder to say no this time round, and if everything goes pear-shaped following a second rejection, everyone will know where the blame will lie. And with all House seats up for re-election very soon, turning down this politically compromised bill may be a dangerous option.
