Economy & Budget

House Minority Leader John Boehner (R-Ohio) welcomed the calls by the presidential candidates for an increase in federal insurance for bank accounts, but he said that House Republicans had proposed the measure during earlier bailout talks.

Both John McCain and Barack Obama, seeking more support for the failed bailout package, called on Monday for the Federal Deposit Insurance Corporation (FDIC) to guarantee up to $250,000 in a bank account. Currently, only $100,000 is insured.

Here's Boehner's full statement:

"The presidential candidates' support for increasing the FDIC cap is welcome news. Increasing the FDIC cap is a proposal put on the table by Roy Blunt and House Republicans but ruled out by Democrats during the negotiations that led to yesterday

The House Republicans who voted against the $700 billion bailout package are proposing their own changes to the bailout bill.

Rep. Marsha Blackburn (R-Tenn.) said she supported the proposal backed by Barack Obama and John McCain to increase the amount in bank accounts that is federally insured. The government insures accounts up to $100,000, while Obama and McCain have called for increasing that limit to $250,000.

Blackburn also called for a suspension of mark-to-market accounting rules that have been blamed for the undervaluing of assets and for a decrease in capital gains taxes.

"There are so many free market-oriented portions of this proposal, of the discussion, that are still there," Blackburn said on CNN Tuesday. "And I think what we saw yesterday was people responded to constituents who were saying let's make certain we put some more free market components. They want to see Wall Street have some skin in the game. They want it to be a workout plan and not a bailout plan. And we're all committed to finding a resolution to this."

Rep. Tom Price (R-Ga.) echoed Blackburn's suggestions and suggested that Congress revisit a House Republican proposal for an insurance system for the bad mortgage assets. Conservatives have preferred an insurance system that relies on private money instead of a bailout in which the government would purchase those assets.

"Those kinds of things are positive principles that could come to the table and, I think, that kind of bill would have a majority of support on the House of Representatives right this second," Price said on MSNBC.

John McCain called dozens of House Republicans over the past few days, trying to get them on board with the Wall Street bailout plan that failed by 23 votes in the House of Representatives today, a McCain economic adviser said this afternoon.

"He called dozens," McCain senior economic policy adviser Doug Holtz-Eakin told reporters today on a conference call.

"I won't go through all of them--they had their reasons" for opposing the bill, Holtz-Eakin said, "Certainly he checked in at every point with the Senate side as well."

House Republicans had held out support during the negotiating process over the past week. Over two thirds of House Republicans (133) voted against the bill today, while just under two thirds of Democrats (140) voted for it.. McCain's campaign has suggested that McCain's main role in the negotiating process was to convince House Republicans to engage more actively in talks with Democrats.

"He certianly made calls today," Holtz-Eakin said. "He was engaged in the process today as he was in the previous days."

Treasury Secretary Henry Paulson, speaking to reporters outside the White House, urged immediate reconsideration by the House, stressing emphatically that the stakes were dire. Paulson said he is conferring with House leaders.

"We need to get something done as soon as possible," Paulson said. "We need to put something back together that works... We believe our plan and the plan we developed with congressional leaders is a plan that works. We need it as soon as possible. We're committed to working with congressional leaders to get it done."

Paulson said he had no qualms about the effectiveness of the plan that had been forged, and that he doubted another was necessary.

"We had a plan that we worked very hard on, that did the job, gave us the tools we needed to protect the financial markets, to protect the American people," he said. "Where we go from here is something we're going to be working on with congressional leaders."

When asked if the U.S. banking system could handle continuing uncertainty, Paulson indicated he thought so.

"Our banking system has been holding up very well, considering all of the pressures," he said. "There's been a lot of work that's been done, and you've seen us now for a period of months and weeks taking strong actions and actions that are essential in order to protect the banking system and the economy. As I've said, we have significant tools in our tool kit, but they're not sufficient. So we'll continue to work with what we have until we get from Congress what we need."

-J. Taylor Rushing

Sen. Judd Gregg (N.H.), the Senate Republicans' lead negotiator on the bailout bill, again called for the passage of the economic rescue package while knocking those who voted against it Monday in the House.

Gregg said that the $700 billion package "is not just an exercise in political ideology," a thinly veiled shot at conservatives who opposed the bill because of free-market principles.

Here's the full statement:

Obviously this vote has severe ramifications as we've already seen a dramatic decline in the markets, which undoubtedly will have significant effects on Main Street and the everyday lives of Americans. This effort to stabilize the markets is not just an exercise in political ideology, but a critical and responsible measure to stave off serious fiscal trouble. It is now time for both sides of the aisle, in both chambers of Congress, to recognize the need to act. We must work together and find a way to advance this necessary legislation so we can begin to restore confidence in our markets, repair our economy, and make sure that American families can feel assured that their savings are secure, and their ability to finance their homes, cars, and children's education is possible.

UPDATE: Gregg

Speaking to reporters late Monday afternoon in the Senate, Gregg gave a spirited defense of the bipartisan plan, reports J. Taylor Rushing.

"Everybody pretty much got what they needed in order to make the package work the way they thought it should work," Gregg said. "It gave the Treasury Secretary the authorities he needed to get into the market and try to stabilize credit. It protected the taxpayer in an extraordinarily aggressive way

Barack Obama's campaign called for bipartisanship in the wake of the House's rejection of the economic bailout bill while also hitting back at John McCain's campaign for blaming the failure on Democrats.

Here's the statement from Obama spokesman Bill Burton:

"This is a moment of national crisis, and today

The U.S. Chamber of Commerce is miffed at Congress and it wants lawmakers to know about it.

The powerful and influential Big Business lobby issued a harsh statement after the House's failure to pass the $700 billion Wall Street bailout/"rescue plan" legislation Monday.

"Make no mistake: when the aftermath of congressional inaction becomes clear, Americans will not tolerate those who stood by and let the calamity happen," Chamber President Bruce Josten wrote in an open letter to Congress.

The Chamber is made up of large corporations. Large corporations live and die on the availability of capital and credit. Those things are in short supply these days, a deficiency the bill was supposed to alleviate. Instead, the markets plunged as the vote slouched toward its ineffectual conclusion.

Earlier Monday, the Chamber sent another missive to Capitol Hill advising them it would designate lawmakers' tallies as "key votes" that would affect the Chamber's ranking of their legislative record. Some House members, then, took a demerit Monday.

Sizable contingents of Democrats (95) and Republicans (133) voted against the bill -- and against the expressed wishes of their respective leaders. But the Chamber's barbs are squarely directed at the GOP lawmakers, normally their allies, who opposed the measure.

"Today's failure to approve legislation addressing the financial crisis has resulted in uncertainty and turmoil that have dramatically affected the markets, and lowered equity prices, eroding individual savings and destroying billions of dollars of household wealth," Josten wrote.

-Jeffrey Young

President Bush is "very disappointed" with the House's rejection of the $700 billion bailout bill, White House spokesman Tony Fratto said.

"There's no question that the country is facing a difficult crisis that needs to be addressed," Fratto said, according to the Associated Press. The president meet with advisers later Monday "to determine next steps," he added.

House Minority Leader John Boehner (R-Ohio) and his lieutenants are blaming Speaker Nancy Pelosi (D-Calif.) and her pre-vote speech for the failure of the $700 billion bailout package.

"I do believe that we could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House," Boehner said in a news conference of House GOP leaders after the bailout bill failed, 228-205.

"I mean, we were -- we put everything we had into getting the votes to get there today," he said. "But the speaker had to give a partisan voice that poisoned our conference, caused a number of members we thought we could get to go south."

Here's the passage in Pelosi's floor speech that Boehner and Republicans are referring to:

Democrats insisted that legislation responding to this crisis must protect the American people and Main Street from the meltdown on Wall Street.

The American people did not decide to dangerously weaken our regulatory and oversight policies. They did not make unwise and risky financial deals. They did not jeopardize the economic security of the nation. And they must not pay the cost of this emergency recovery and stabilization bill.

When Boehner was asked if would accept any responsibility for the bill's failure, he said "absolutely not."

"As a matter of fact, I would argue that if I had not stood in the way of the original Paulson plan, there would have been far less votes on both sides of the aisle," he added.

Rep. Adam Putnam (Fla.), the House GOP chairman, said that Pelosi's speech was a "very marked partisan turn at the end of the debate" that was different than the rhetoric of Boehner and other Democratic leaders.

Putnam, however, said that House Republicans "remain committed to working on a bipartisan basis to bring a bill to the floor that will garner the necessary votes to avoid a financial collapse."House GOP Whip Roy Blunt (Mo.) said that he thought there were a dozen Republicans who would have voted for the bill if it wasn't for Pelosi's speech.

Rep. Eric Cantor (R-Va.) called her speech "inappropriate."

"Clearly, this is an instance where you see Speaker Pelosi's failure to listen, failure to lead," he added. "This caps off a year that I think has been probably the most unproductive year in the U.S. Congress that I've seen in my lifetime. No production of any bailout bill. No energy bill. No appropriations process. Very little to show the American people."

Read Pelosi's entire floor speech after the jump. Read more...

Congress today voted against the largest financial assistance bill in the nation's history, drawing heated debate from liberals, conservatives, centrists, and independents both in Congress and in the public.

See the final tally of how the vote broke down, via the clerk of the House of Representatives, and find out how your representative voted here.