Bailout Bill Passes

- Creates "Troubled Asset Relief Program" (or TARP) to buy up "toxic assets"
- Includes $110 billion in unrelated tax breaksSan Luis Obispo: Congress approves historic financial system bailout (October 3, 2008)
- Increases FDIC insurance cap from $100,000 to $250,000
- Dow Jones Industrial Average plunged over 700 pts after first bill rejected
- Legislation passed by Senate started life as a mental health bill sponsored by Pete Domenici and Paul WellstoneStarTribune.com: Provision in bailout measure provides mental health coverage... (October 3, 2008)

On October 3, 2008, the House of Representatives passed a bill, already amended by the Senate, that would authorize Treasury Secretary Henry Paulson to buy up to $700 million in bad debts from U.S. banks. The legislation passed the House by a vote of 263 to 171. The vote comes a week after the House rejected a similar bill, the Emergency Economic Stabilization Act, that also provided $700 billion for a Wall Street bailout, on the grounds that it did not include a cap on executive salaries and overburdened taxpayers.Los Angeles Times: Economic bailout plan takes shape (September 20, 2008)
Quotes
- "By coming together on this legislation, we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country." -- President George W. BushAFP: Bush: I will sign bailout bill quickly (October 3, 2008)
- ""The broad authorities in this legislation, when combined with existing regulatory authorities and resources, gives us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets." -- Treasury Secretary Henry PaulsonCNN Money: $700B bailout passes (October 3, 2008)
- "The American people will appreciate the leadership of their elected representatives and senators who took bold action to help stem a severe credit crunch that threatens to cost many jobs and undermine access to credit for working Americans." -- Ben Bernanke, Federal Reserve Chairman WSJ.com: Bernanke Statement on Bailout Bill Passage (October 3, 2008)
- "I rise in strong opposition to this bill because it won't solve our problem...Instead of it being a credit crunch, I think it's a lot more serious than that. I think what's happening in the market today is signaling something much more draconian. It's probably telling us that our government is insolvent, that we're on the verge of bankruptcy and big things are starting to happen." -- Congressman Ron PaulYouTube: Ron Paul: You're Going to Guarantee a Great Depression (Time: 2:43)
- "While the focus has been on the Dow Jones and Wall Street, we are addressing the real pain felt by Mr. and Mrs. Jones on Main Street." -- House Speaker Nancy PelosiReuters: House passes $700 billion financial bailout (October 3, 2008)
Pork and "Incentives" in New Bill

According to the New York Post, a number of side measures and incentives were put into the bailout package before it was passed, including tax breaks for manufacturers of wooden arrows for children and Puerto Rican rum producers. The vote of Alaska Republican Don Young was also allegedly "purchased" by adding a provision that allows for tax benefits for those adversely affected by the Exxon Valdez Oil Spill.New York Post: Piggy Pols in Hog Heaven... (October 2, 2008)