What a Difference a Few Days Make: House Passes Economic Rescue Package

By: Lowell
Published On: 10/3/2008 2:01:14 PM

Just a few days after rejecting the "Emergency Economic Stabilization Act of 2008," the House of Representatives a few minutes ago voted 263-171 to approve it.  The "yea"s included 172 Democrats and 91 Republicans, with 63 Democrats and 108 Republicans voting "nay."  

As far as the Virginia delegation is concerned, it went 6-5 against the legislation.  The 5 "ayes" were as follows:

Rick Boucher, Eric Cantor, Tom Davis, Jim Moran, Frank Wolf

The 6 "nay"s were:

Thelma Drake, Randy Forbes, Virgil Goode, Bob Goodlatte, Bobby Scott, Rob Wittman

The Senate, of course, approved the bill on Wednesday, with both Jim Webb and John Warner voting "yea."

The Dow is up 94.54 points right now.  We'll see what happens in equities and, more importantly, in the credit markets, over the next few days and weeks.  My feeling is that this bill was flawed, not even close to all that's needed to fix the underlying problems in our economy, but ultimately needed to prevent a complete meltdown.  What a fiasco, brought to you in (large) part by years of Republican economic, tax and (de)regulatory policies.

UPDATE: Bush signs the bill. Was that like the fastest time between Congress passing something and the president signing it into law EVER?!?


Comments



The difference (Eric - 10/3/2008 2:08:01 PM)
wasn't a few days, it was $110 billion in pork and/or tax breaks to buy off a handful of Republicans.  Pure garbage.

And in Presidential news, I saw that McCain was implying yesterday Bush should veto any bad bill laden with pork - no matter how important.  Even though McCain just voted for this pork laden bill.  Good thing (for the GOP) that the debate came along to distract everyone for McCain nonsense.



It's the proverbial "making of sausage" (Lowell - 10/3/2008 2:15:03 PM)
That's how legislation gets passed in Washington (or in state capitals, or in counties, or in...).  Before you totally condemn the "pork" in this bill, look at what some of it is!

The final version of the bailout included the extensions for renewable tax credits that Congress has been struggling with all year (the House and Senate disputed how to offset the credits with new revenues).

The $17 billion in tax credits includes an eight-year extension of the investment tax credit for solar energy, a one-year extension of the production tax credit for wind, and a two-year extension of the PTC for solar, biomass, and hydropower. The residential energy-efficient property credit would also be extended through 2016, and the definition of the systems that qualify for that credit would be expanded to include small wind investment and geothermal heat pumps. There are also incentives for bicycle commuting and plug-in electric vehicles.

The bill also includes provisions for carbon capture and sequestration, oil shale, tar sands, and coal-to-liquid fuels, which enviros are less happy about. But the final passage of the various tax credits is a welcome win for renewable industries, which have been begging all summer for Congress to come to agreement on the package.

OK, very very bad on the coal-to-liquids, oil shale and tar sands.  But very, very good on the energy efficiency and renewables.  A mixed bag of "sausage," in other words...



Yeah (Eric - 10/3/2008 2:32:24 PM)
the additions are a real mixed bag of gold and shit, aren't they?  

I am very happy that the renewable tax credits got through.  Very disappointed in some of the other energy credits.  But overall it should not have happened this way.

The making of sausage may be the norm (I'm not a big fan but can generally live with it), but the fact that Congress can't skip the sausage bit for this supposedly uber-critical bill is just pathetic.  Seriously, they're willing to let the economy crash-and-burn if they don't get a few more tax credits?  That isn't leadership.  That isn't responsible.  That isn't looking out for the country's best interests.  That is pure bullshit.  Nothing more.   There should be no "just the way it works" excuses allowed here.  



Ha, Eric's getting feisty! :) (Lowell - 10/3/2008 2:45:03 PM)
But as the saying goes, Democracy is the worst system ever invented...except for all the other ones.  LOL.


It needed to be a bipartisan affair (tx2vadem - 10/3/2008 7:08:57 PM)
And we got that.  

Democrats in the Senate wanted to add these on since they were tied up in budget bills that weren't going to see the light of day until next year.  Did this move a lot of votes one way or the other, I doubt it was a primary driver.  If you wanted these solar and wind tax credits not to expire this year, this was the easiest and fastest way to do it.  Otherwise, they probably would have expired because we're going to be under continuing resolutions until March of next year.  

The tax credits aren't pork.  If there was pork in the bill, I don't know what it was.  I'd be curious to know what was truly wasteful spending (and before Ron1 says anything, besides the $700 billion asset purchase).



The point is (Eric - 10/4/2008 8:33:33 AM)
that these cooks in Washington were busy making sausage while their restaurant was buring down.  Or at least they were screaming it was burning down.

The tax credits might not technically be pork, but what do you want to call tax credits for NASCAR track losses, wooden arrows, oil shale efforts, and even renewable energy?  Although I fully support the last one I still call these unnecessary additions to a bill that is designed to stabalize our economy.  And if they were "necessary" to buy the votes to pass this bill, then that gets back to what I said above - those leaders aren't doing their job.



Curious Minds Want to Know (jackiehva - 10/3/2008 2:29:51 PM)
WHO WROTE IN THE PORK???  I heard someone on MSNBC this morning say they are trying to find the sources of these "earmarks" and will reveal the names of responsible legislators.  McCain may not ask for pork but he sure as h**l has signed off on a lot.  What a hypocrite!!!


Right, now McCain is being a total (Lowell - 10/3/2008 2:46:17 PM)
hypocrite, railing against "pork" and "earmarks" yet voting for this pork-laden bill  How does the McCain campaign put lipstick on THAT pig? :)


Virginia (Ron1 - 10/3/2008 2:13:58 PM)
may end up being the only multi-district state in which not one vote changed from the initial to the final vote.

This bill is substantively the same as the last vote; I find it disconcerting that 'Government by DJIA' decided to pass it the second time because of a few bad days in the equity markets when the credit market is the problem.

I am still against this bill, mostly because Hank Paulson will be running the show. But now that it's passed, I hope it works and it prevents more economic misery for the lower and middle classes. I suspect it won't.  



Government by DJIA = bad (tx2vadem - 10/3/2008 7:19:43 PM)
DJIA is a really poor measure to begin with.  It's not as good as the S&P 500 or even better the Wilshire 5000.  DJIA is made up of only 30 stocks, and it is price-weighted which makes it even more useless.  Agreed, Government by DJIA = bad.


Wall Street Threw a Party (loboforestal - 10/3/2008 3:48:47 PM)
And you get to pay for it.

I knew Jim Webb owed one to Chuck Schumer; but now those two are even.

The government can not hold up bubble prices on bad assets.  Real estate prices will return to historic levels in line with fundamentals like percentage of personal income and ability to handle debt.

We're making the same mistake Japan made: pretending that we'll eventually recoup the losses.

Yeah, the boys in the BMWs drove 110 mph, ran you off the road, rolled into a ditch, and now you get to clean it up.

great.



Munis! (tx2vadem - 10/3/2008 7:34:56 PM)
Well as a bonus of this wacky credit market, triple A rated Muncipal Bonds are yielding more than treasuries (which is very atypical since interest on Munis is tax-exempt).

We'll see if this package brings us back to normal spreads.  I have a positive outlook.  Once the Treasury starts buying these assets, I expect LIBOR to drop and triple AAA rated bonds to drop as well.  And we'll be back into sane mode.