House Defeats Financial Rescue Package

by Steve Handlesman
NBC News

WASHINGTON - The answer is "no!"

In a slap in the face to President Bush, to John McCain and Barack Obama, to the top leadership in Congress and to the captains of Wall Street, the U.S. House of Representatives today rejected the 700 billion plan to bail out the nation's struggling financial institutions.

Stock market fell sharply as America's top leaders in both parties lined up behind this bailout.

This rejection is a stunner, and where we all go now is not clear.
 
The house rejected the bailout at midday.
 
Stock prices dove down 700 points.

Just one effect backers of the bailout had warned against.

"A million more homes will likely be foreclosed on. Banks would likely be unable to lend," said Democratic Congressman Steny Hoyer of Maryland.

Supporters said the bill could have ended the mortgage meltdown by allowing government to renegotiate the bad mortgages it buys.

Giving taxpayers limited ownership of bailed out companies, and limiting multimillion dollar CEO salaries and golden parachutes.

Barack Obama, John McCain and President Bush backed it.

A final appeal from President Bush this morning, "Bold bill that will help keep the crisis in our financial system from spreading throughout our economy," President Bush, said.

But the 700 billion dollar price tag and the concept angered many voters.

"You know the rich, the rich will end up getting richer in this," said Texas taxpayer Adam Rosenfield.

"I feel like it's going to hurt the public and the main street homeowner," said Maryland taxpayer Sandi Woodbind

Republican leaders were sympathetic, but desperate.

"if I didn't think we were on the brink of an economic disaster it would be the easiest thing in the world for me to say no to this," said Ohio Republican Congressman John Boehner.

But "no" is what most Republicans did say.