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House Rejects Emergency Financial Bill; Democrats, Republicans Trade Accusations

In a 228 to 205 vote, the U.S. House of Representatives voted down a $700 billion measure aimed at addressing the nation's financial crisis, as lawmakers from both major political parties defied their leadership and voted against the bill. VOA's Dan Robinson reports the outcome has left Democrats and Republicans trading accusations about who was responsible for the defeated bill.

When the final vote was announced, the measure had gone down in defeat, with 133 Republicans and 95 Democrats voting against it.

Afterward, as lawmakers and Americans nervously watched a sharp drop in stock prices on Wall Street, Republican leaders told reporters that remarks on the House floor by Speaker Nancy Pelosi had insulted Republicans, robbing the bill of important votes.

"We put everything we had into getting the votes to get there today, but the Speaker had to give a partisan voice that poisoned our conference, caused a number of our members that we thought we could get, to go South [vote against the measure]," said Minority Leader John Boehner.

Appearing with Democratic leaders, Speaker Pelosi said lines of communication remain open to Republicans and the administration, adding that she had spoken with Treasury Secretary Paulson.

"I said, 'Mr. Secretary, we delivered on our side of the bargain," she said. "You impressed our members, and the president impressed our members about the gravity of the situation, but action was necessary to stabilize the markets and to protect the taxpayer.' Clearly that message has not been received yet by the Republican caucus."

Emerging from a meeting with President Bush at the White House, Paulson said he was very disappointed after so much bipartisan work on the bill, saying the administration and Congress need to work as quickly as possible on a revised plan that can be implemented as soon as possible.

"I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy," he said. "We have got much work to do and this is simply too important to let fail."

President Bush expressed disappointment with the House rejection. He had this comment during an appearance at the White House with the visiting President of Ukraine.

"The Republicans and the Democrats will come together to get this piece of legislation passed which is necessary to address the financial situation and to provide a rescue plan to make sure that there is some stability in the markets," he said.

In the Senate, which would have acted on a House-passed bill, Republican Judd Gregg spoke to reporters.

"I think the bottom line is this: If we don't act promptly around here, and effectively, then a lot of people are going to lose their jobs, and Main Street [America] is going to be put into dire straits," he said.

Asked about next steps, House Financial Services Committee Chairman Barney Frank said Congress has no alternative but to keep working on a bipartisan solution that will pass. But he had this response to Republican criticisms.

"Here's the story. There is a terrible crisis affecting the American economy," he said. "We have come together on a bill to alleviate the crisis and because somebody hurt their feelings, they decided to punish the country."

As revised by Congress, the measure would have authorized the government to purchase in stages as much as $700 billion worth of troubled assets and acquire equity in threatened financial firms. It also would have created a strong oversight board, taken steps to help Americans avoid home foreclosures, and placed limits on executive compensation.

During debate, Republicans asserted that the proposed massive government intervention failed to address fundamental market problems, calling it "corporate welfare," while Democratic opponents said it contained too few protections for American taxpayers.

"I fear this legislation is fraught with unintended consequences," said Texas Republican Representative Jeb Hensarling. "I fear that ultimately it may not work. I fear it is too much bailout and not enough work out. I fear that taxpayers may end up inheriting the mother of all debts."

Democratic Congressman Brad Sherman was among the Democrats who opposed the legislation.

"Some 400 eminent economists, including three Nobel laureates, are asking us to come back and do our job and write a good bill in the next week or so," he said.

The fate of the financial market bailout plan is now in question, with the Jewish holiday Rosh Hashana interrupting a congressional session that had already been extended beyond its planned adjournment to prepare for the November general elections.