The US House of Representatives set aside doubts that prevailed a few days ago and passed a landmark $700 billion Wall Street bailout bill last night that President George W. Bush promptly signed into law.
Eyeing both the November 4th elections and stock market indexes, lawmakers voted 263-171 to approve the government's biggest market intervention in decades, despite deep reservations about its mechanics, enormous cost and ideological significance.
In a stunning vote on Monday, the House had rejected the bailout proposal, sending stock markets plummeting.
Amid the ensuing financial market volatility and voters' fears, the Senate responded on Wednesday and passed the bill, attaching $150 billion in popular tax break extensions and a boost in bank and credit union deposit insurance to rally more House support.
Four days after rejecting the bill, the House approved the revised measure, with 26 Republicans switching the No votes they cast on Monday to Yes on Friday and 32 more Democrats voting yes.
House Minority Leader Roy Blunt, a Missouri Republican, credited the "active participation" of Republican presidential candidate John McCain and Democratic candidate Barack Obama in convincing some House members to support the bill.
Conservative Republican House members, aware of a wave of opposition to the bill as they prepared for November 4th elections, attacked it as a step toward "socialism," while liberal Democrats blasted it as a bailout for Wall Street "fat cats."
But a majority decided to forge ahead with the plan, first proposed on September 20th by the Bush administration and modified over two weeks of frantic negotiations on Capitol Hill.
The bailout bill will empower the Treasury Department to purchase up to $700 billion of broken mortgage-backed securities that are choking world capital markets. Treasury would dump the securities into a vast federal portfolio in hopes that will unclog the markets.
The bill leaves unanswered precisely how Treasury would price and purchase the assets and manage them - questions that economists have said will decide whether the plan works and whether taxpayers will one day get their money back.
By attaching the renewal of expiring tax credits to the bill, congressional leaders were able to coax support from some wavering lawmakers, especially Republicans.
The tax provisions include renewing a middle-class tax break, an expanded child tax credit and renewed deductions for state and local sales taxes, important in states like Texas. The bill continues the deduction for local property taxes.
Fiscal conservatives complained the tax portion of the bill was not paid for with spending cuts or other tax increases that the Senate refused to go along with.
The measure will potentially add about $850 billion to the US debt at a time when annual budget deficits are already hitting record levels.
In five years, if the bailout has cost taxpayers money, the president will have to submit legislation setting a levy on Wall Street to cover those costs.