In an extraordinary gamble on the future of the global economy, the House of Representatives voted down the $700 billion Wall Street bill 205-228, as Republicans defied their president, their presidential nominee and the congressional leadership to vote nearly two to one against the measure described as crucial to the prevention of an economic collapse.
As the vote progressed, the Dow steadily dropped, reaching a 700-point decline at its mid-day nadir. Television coverage of the vote was frantic, with a split-screen showing a graphic of plunging stocks paired with a chart showing the steadily growing number of 'no' votes. All members of the House, equipped with Blackberries, were fully aware of the market trends driven by their balloting.
Almost every Representative was present during the roll call. Democratic leaders huddled with members, desperately trying to persuade defectors to change their votes. Republican leaders, in contrast, appeared resigned to the overwhelming opposition in their caucus.
As the vote progressed, and as the possibility of rejection became probable and then certain, there was a hush on the floor as the normally boisterous members realized what the outcome would be. Minutes passed, with the 15 minutes allotted to the roll call technically over, but with members given extra time to change their votes. Only one did so, and he shifted from yea to nay. No one smiled on the winning or losing side. Most looked dazed or stunned.
While the economic consequences of the vote will be determined during the coming weeks, the outcome this afternoon was a major setback to John McCain, who had backed the proposal and portrayed himself as a party leader who would help win approval for the bailout.
Chief McCain strategist Steve Schmidt said yesterday on Meet the Press, "What Senator McCain was able to do was to help bring all of the parties to the table, including the House Republicans, whose votes were needed to pass this." And this morning, McCain backer Mitt Romney told NBC that "this bill would not have been agreed to had it not been for John McCain....this is a bipartisan accomplishment, a bipartisan success. And if people want to get something done in Washington, they just watch John McCain."
Instead, members of McCain's own party voted 133 to 65 against the measure. Democrats, on the other hand, voted 140 to 95 for the bill.
In an attempt to shift blame for the defeat, House Republican Leader John Boehner of Ohio and Republican Whip Roy Blunt of Missouri charged that House Speaker Nancy Pelosi provoked the 'no' votes by angering Republican members with an excessively partisan floor speech. "We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House," Boehner said.
House Financial Services Committee chair Barney Frank of Massachusetts, a key architect of the bill, countered that even if true, the claim amounted to an extraordinary level of personal and parochial motivation: "Because somebody hurt their feelings, they decided to punish the country."
In her speech, Pelosi did place some of the blame for the current crisis on Bush: "Today, we will act to avert this crisis, but informed by our experience of the past eight years with the failed economic leadership that has left us left incapable of meeting the challenges of the future. We choose a different path. In the new year, with a new Congress and a new president, we will break free with a failed past and take America in a New Direction to a better future."
Shortly after Boehner spoke to reporters, the McCain camp issued a statement by economic adviser Doug Holtz-Eakin similarly seeking to shift the blame to Democrats:
"From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Obama and Reid, Speaker Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families. Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill. Just before the vote, when the outcome was still in doubt, Speaker Pelosi gave a strongly worded partisan speech and poisoned the outcome. This bill failed because Barack Obama and the Democrats put politics ahead of country."
Obama campaign spokesman Bill Burton countered:
"This is a moment of national crisis, and today's inaction in Congress as well as the angry and hyper-partisan statement released by the McCain campaign are exactly why the American people are disgusted with Washington. Now is the time for Democrats and Republicans to join together and act in a way that prevents an economic catastrophe. Every American should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point, but now that we are here, the stability of our entire economy depends on us taking immediate action to ease this crisis."
There very likely will be an attempt to try to pass the bill again, although it is not clear how soon that would take place. Republican Congressman Joe Barton of Texas asked if he could move for reconsideration and if he did, how soon would it be taken up. He was told by House parliamentarians that it would be taken up immediately -- too soon for supporters to regroup -- so he put off his motion.
A House aide said no additional votes would be held in the House until after the Senate takes up the package, scheduled for Wednesday.
"What happened today cannot stand," Pelosi said after the vote. "We must move forward, and I hope that the markets will take that message."
Before the vote, President Bush issued a statement that proved to be futile.
"A vote for this bill is a vote to prevent economic damage to you and your community," Bush said, "This is a bold bill that will keep the crisis in our financial system from spreading through our economy."
Addressing the full House during the debate, Pelosi said, "I know that we will live up to our side of the bargain, I hope the Republicans will, too."
Boehner and Blunt of Missouri spoke strongly in favor of the legislation.
Leaders of the conservative opposition to the bill claimed vindication. "The American people rejected this bailout and now Congress did likewise," said Indiana Republican Rep. Mike Pence. During the debate, Rep. Jeb Hensarling of Texas contended that enactment of the proposal would put the country on "the slippery slope to socialism."
"The Republicans killed this," said Frank.
White House spokesman Tony Fratto declared, "Obviously we are very disappointed in the outcome... There is no question the country is facing a difficult crisis that needs to be addressed."