Bailout Collapse

Looks like the bailout bill failed in the House. I’m not entirely sure what happens from here. Do they bring it back up for a vote? According to Marc Ambinder, more than 131 Republicans and 94 Democrats voted against. The Dow is dropping like a rock. That’s a pretty large block – I’m not sure that they can really bring this back from that.

Paul Kruman has said that the bill is sufficiently not terrible to be worth passing. It’s not exactly the second coming of the New Deal, but it’s what’s needed right now. If nothing else, it was a pretty remarkable step back from the original Paulson plan. Dodd and Frank were under some pretty tight constraints in what was politically doable, with the president and the Treasury secretary where they are.

The bill really had to have bipartisan support – Krugman talks about this above – because without it, the dissatisfied party can always go and hang a sign reading “$700 Billion Handout” around the other party’s neck. It seems that the Republican backbenchers didn’t feel like they can go home with this plan behind them. I guess we’ll see if they end up ruing that decision here in a month or so.