The 451-page Emergency Economic Stabilization Act grants the Treasury secretary unprecedented authority to buy as much as $700 billion of troubled assets from ailing financial institutions in an effort to stave off more bankruptcies and provide cash for new loans to ease the credit market freeze.
Lawmakers demanded numerous changes to the original three-page proposal, including limits on how much company executives can be paid if their companies sell assets to the government.
Congress also added an oversight board to supervise the program, raised the cap on government bank deposit insurance to $250,000 from $100,000, and required steps to help homeowners avoid foreclosure.
Sweeteners added an estimated $150 billion in costs, including one provision that shields 24 million taxpayers from the Alternative Minimum Tax. The new law also has tax relief provisions for disaster victims; research and development tax credits; a hybrid-car tax credit; and tax breaks for teachers who spend their own money on school supplies.
Many House members said they were reluctant to help an unpopular financial sector and to approve new federal spending but felt they had no choice.
"Nobody in East Tennessee hates the fact more than me that I'm going to vote yes," said Rep. Zack Wamp, a Republican who came to favor the bill after helping defeat it in Monday's 228-205 vote. "Things are really bad, and we don't have any choice."
"I am just as angry and frustrated as many of those who have called my office," said Rep. Jerry McNerney, a California Democrat who voted yes both times. "But I voted for it because my constituents' 401(k)s, their life savings, and the ability to take out car, home and student loans hang in the balance."
Preparing for the political fallout, Georgia Republican Rep. Jim Marshall has begun airing a TV ad in his district in which he declares: "I don't like this rescue plan any more than you do. ... But I'm not going to stand by and let this crisis undermine our economy and damage the financial future of everyone in America."
Overall, Democrats in the House favored the bill 172-63 in yesterday's vote. Republicans voted 108-91 against it.
In Monday's vote, Democrats voted 140-95 in favor; Republicans voted 133-65 against. Between the two votes, 33 Democrats switched their votes to yes, while one Democrat changed his vote from yes to no. Twenty-five Republicans switched to yes, and one other Republican voted yes yesterday after missing Monday's vote.
