Congress votes ‘yes’ to bailout

Published 11:49 pm Friday, October 3, 2008

A controversial $700 billion government bailout received the approval of Congress on Friday and was quickly signed by President Bush.

The final vote was 263 – 171 in the House. There were 58 more votes for the measure than an earlier version that failed on Monday.

Following Monday’s vote, Senate leaders added on $110 billion in tax and spending provisions designed to attract additional support. The revised measure won Senate approval Wednesday night, 74-25.

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According to Congressman Terry Everett, the remedy may be a bitter pill, “but doing nothing could be catastrophic to the country.”

The Republican congressman has said he was “outraged” by those whose actions have placed the U.S. economy at risk, saying their collective misconduct has placed the economy in a perilous condition, forcing the need for the Emergency Economic Stabilization Act.

The bill gives the Treasury Department money to purchase bad mortgage-related securities. There has been a tremendous slow down in the flow of credit in the country, impeding the ability of businesses to conduct routine operations or expansion. It has also adversely affected consumers seeking financing for mortgages, cars and student loans. Some state governments have also experienced difficulty borrowing money.

House Republican leader John Boehner of Ohio, who voted for the bill, said doing nothing could lead the crisis to worsen, putting the nation into an economic slump “like most of us have never seen.”

Conservative Republicans like Representative Jeb Hensarling of Texas continue to voice their criticism of the bill, an unprecedented federal intervention in private capital markets.

For those concerned over the health of Alabama’s banking institutions, John D. Harrison, state superintendent of banks, says there is no cause for alarm.

“As one of the regulators of Alabama state-chartered banks, I am proud of the conservative approach that the CEOs of our banks have taken. The conservative approach has given Alabama banks the ability to weather even those tough economic times,” Harrison said.

“Each person who has money in an Alabama state-chartered bank also has the full force and backing of the Federal Deposit Insurance Corporation. This means that at least $100,000 each depositor has in each Alabama state-chartered bank is insured against failure. The good news is we do not expect to have to use this insurance.”

Harrison said the positive economic developments in the state in recent years have allowed Alabama to better weather the economic downturns.