U.S. lawmakers pass $700 billion bailout bill

U.S. lawmakers pass $700 billion bailout bill

U.S. House of Representatives backs revised $700 billion bank bailout bill


(CNN) -- The U.S. House of Representatives has passed the revised version of $700 billion bank bailout plan intended to bolster the ailing U.S. financial system.


Wall Street traders have been watching developments in Washington closely.

1 of 2 The House rejected the original bill on Monday, sending stocks tumbling around the world.

But lawmakers approved the rescue package, backed by U.S. President George W. Bush and Treasury chiefs, after the U.S. Senate passed it by a large majority on Wednesday.

House Republican leader John Boehner was optimistic prior to the vote. "Is it perfect? No. But it's clearly better than it was a week ago," he said.

"It's time to act on behalf of the American people. It's about their savings. It's about their jobs. It's about their retirement security."

At least eight lawmakers said they had changed their position Friday. "The way I see it, we don't have much of a choice," Democratic Congressman James McGovern said as the debate got under way.

Democratic Congresswoman Hilda Solis, who voted against the bill Monday, said she would reluctantly support the bill: "We have to restore trust in our banking institutions."

Republican Congresswoman Sue Myrick said the plan was "the best thing for the country," admitting that supporting the legislation could cost her votes in November's Congressional elections.

"I don't care about politics....I may lose this race over this vote but I don't care ... It needs to be about what's right for the country," she said.

But others reiterated their opposition to the measures, which some critics argue reward rapacious Wall Street speculators at the expense of ordinary taxpayers.

"My 'no' vote will be a call not to reward speculators," said Democratic Congresswoman Marcy Kaptur. "Let's work on a bill that doesn't reward bad behavior."

Monday's vote was 205 in favor of the bill, 228 opposed. The bill needs a simple majority of the representative present and voting to pass. The bill passed the Senate 74 to 25.

Stock markets around the world have endured days of turmoil as a consequence of uncertainty over Washington's response to the credit crisis.

U.S. markets opened brightly Friday, following heavy losses the previous day, amid fresh expectation that the bailout plan would go through. By 11.50 a.m. (1550 GMT) the Dow Jones was up 1.79 percent and the Nasdaq was up 2.80 percent.

Asian markets slipped earlier in the day with Japan's Nikkei Exchange closing the week down 215.05 points, or about 1.9 percent at 10,939.71 -- a new three-year low. Hong Kong's Hang Seng dropped 2.9 percent to 17,682.40 and key indexes across the region were all down.

The banking world has been in turmoil in recent weeks with many institutions scrambling for survival as credit has dried up, leaving many holding "toxic" subprime debt following the collapse in U.S. house prices.

In the latest development Friday, troubled U.S. bank Wachovia announced it would merge with Californian banking giant Wells Fargo in a deal valued at approximately $15.1 billion. (Full story)

The merger will include all of Wachovia's banking operations, Well Fargo said. Wachovia had looked set to be sold to Citigroup in a deal brokered by the federal government.

The core of the Senate financial bailout bill is a plan to buy troubled assets from banks, but the proposal includes a number of new provisions aimed at ordinary people struggling under the credit crunch. Blog: Will the bailout plan fix the economy?

The changes -- including $110 billion in tax breaks and raising the limit at which bank desposits are guaranteed from $100,000 to $250,000 -- were intended to attract more votes from the House -- especially from Republicans, two-thirds of whom voted against that version. Explainer: What next for the bailout plan?

But the bill also includes some odd sweeteners -- so-called "pork-barrel legislation" -- such as an excise tax exemption for a very specific type of arrow used by child archers, a $478 million tax incentive scheme to encourage movie companies to continue producing films in the U.S, and measures to allow employers to provide benefits to employees who commute to work by bike. Watch where's the pork? »

Speaking in Friday's debate, Republican Congressman Steven LaTourette accused senators of "larding up" the bill. "Let's do it right. The pork doesn't belong in the bill," he said.

CNN