White House, Lawmakers to Seek New Bailout Deal

Looks like we are facing bailout round two now.
I’m not an economist, but I suspect that if we will just sit tight and take our lumps, the insolvent companies will be bought up and the market will stabilize. We all know that stock brokers sell when there is even the slightest hint or rumor of problems anywhere in the world. This is the nature of the stock market.
Stock prices do not necessarily show a true picture of the stability a company. It is only one aspect that needs to be looked at.
My point is, if everyone will avoid panicking, the market will stabilize on it’s own. I don’t believe that the government should even be considering a bailout.
Guess y’all better contact your representative and let them know how you feel about this. I suspect that most of us are still of the “no bailout” mindset.

WASHINGTON — Top congressional and White House officials, stunned when the House of Representatives rejected a massive rescue plan for the U.S. economy, scrambled to structure a new bailout proposal that would attract reluctant lawmakers and still soothe the unnerved financial markets.

“Doing nothing is not an option” House Majority Leader Steny Hoyer said after seeing the $700 billion emergency package for the nation’s financial system fail 228-205 on Monday.

With the House not scheduled to meet again until Thursday, congressional leaders and Bush administration officials promptly sought to assess what types of changes could win over enough votes to guarantee success. President George W. Bush planned to make a statement on the rescue plan at 8:45 a.m. EDT Tuesday.

The outcome of Monday’s vote fed a huge sell-off in the stock market, sending the Dow Jones Industrial Average into its biggest single-day plunge, dropping 777 points. The carnage spread Tuesday to Asia, with all major stock markets in the region tumbling sharply amid heightened fears of a broader global financial crisis.

The House vote and the market’s terrified reaction shook Washington and New York centers of power, but no immediate solution seemed at hand.

The bill’s failure came despite furious personal lobbying by President Bush and support from House leaders of both parties.

But the legislation was highly unpopular with the public, ideological groups on the left and the right organized against it, and Bush no longer wielded the influence to leverage tough votes. Even pressure in favor of the bill from some of the biggest special interests in Washington, including the U.S. Chamber of Commerce and the National Association of Realtors, could not sway enough votes.

The legislation the administration promoted would have allowed the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believed it would help lift a major weight off the already sputtering national economy.

Treasury Secretary Henry Paulson emerged after the vote and warned of a credit crunch that would affect American businesses and said families would find it harder to get student loans and car loans.

“We need to work as quickly as possible,” he said gravely. “We need to get something done.”

The sense of urgency was not universal. Many opponents of the bill argued that the package amounted to a too-costly commitment of taxpayer money to bail out financial institutions for their own mistakes.

Rep. Dean Heller, a Nevada Republican, offered a typical sentiment. “I cannot with good conscience put Nevada’s taxpayers on the hook for the foolish excesses of Wall Street,” he said. “Congress should pass legislation that protects the taxpayer, assists with bad assets and allows the market to correct itself.”

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