The drama was palpable in the House chamber when, as "no" votes were outpacing "aye" votes, a Democratic leader began to circle the chamber repeating: "The market is falling. The market is falling." On the floor of the New York Stock Exchange, meanwhile, traders fell silent as they watched television screens showing the House vote falter.
In the end, the rescue plan failed 228-205. The Dow Jones industrial average plummeted 777.68 points to close at 10,365.45 - not only a record point drop but also the stock index's lowest level since 2005. Chastened, leaders of both sides pledged to keep working to pass the bill. Senate leaders said they hoped to vote by the end of the week.
"The bottom line is this: If we don't act promptly around here, and effectively, then a lot of people are going to lose their jobs," said Sen. Judd Gregg of New Hampshire, the top Republican on the Senate Budget Committee and a lead negotiator of the legislation.
FOR THE RECORD - An article on page 8 of the news section of Tuesday's Baltimore Sun incorrectly reported the number of Democratic members of Congress who voted against the financial rescue plan that was rejected by the House of Representatives on Monday. Voting against the legislation were 133 Republicans and 95 Democrats.
THE BALTIMORE SUN REGRETS THE ERROR
Some strategists suggested that Democratic leaders try to pass the bill solely with Democratic support. But Pelosi and other Democrats have said that the plan is not theirs but the Bush administration's and that both parties should share in the outcome's blame or credit.
Hoping to pick up enough GOP votes for the next try, Republicans floated several ideas. One would double the $100,000 ceiling on federal deposit insurance. Another would end rules that require companies to devalue assets on their books to reflect the price they could get in the market.
Paulson said the government would continue to act to try to contain the crisis using its existing powers. The Federal Reserve took one such step yesterday, announcing that it would more than double the cash available to banks with shaky assets by adding hundreds of billions of dollars to existing loan programs.
"Our tool kit is substantial but insufficient," he said.
In what has become a familiar routine, Democratic and Republican leaders blamed each other for the failure. Ultimately, 60 percent of the chamber's Democrats supported the bill, but only 33 percent of Republicans did.
Republican leaders said they lost 12 votes at the last minute.
"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," said Minority Leader Rep. John Boehner of Ohio.
