Stock prices of many agribusiness companies took a hit Monday afternoon in a general market melee after the House defeated a $700 billion bailout bill aimed at working out what many have called the worst U.S. financial crisis. The market was under severe pressure as Wall Street traders reacted with shock to the 228-205 vote.
With the market down 574 with an hour of trading left, it was unclear where the market would close. But the market initially went down 705 points as it became clear the vote would fail. House Banking Committee Chairman Barney Frank, D-Mass., sent word that House leadership would not try for another vote until Congress could assess the market reaction. While some experts predicted the markets might right themselves other commentators predicted a financial meltdown for the U.S. and perhaps other economies. At the close the Dow Industrial was down a record 777 points.
The blame game on the vote began immediately. House Republican leaders John Boehner, Ohio, and Roy Blunt, Missouri, blamed a partisan floor speech by House Speaker Nancy Pelosi for undermining Republican support.
Republican House members voted against the bill almost 2-1, in what largely is viewed as a reflection of widespread disgust across the U.S. with a financial crisis. Although the GOP votes may have represented constituent views, the immediate plunge in stock market values could mean a backlash against Monday's votes. Commentators believe the pain in the markets may also impact the chance for Republican John McCain to win a bid for the presidency.
Democrats voted 140 yeas to 95 nays for the bailout. Republicans voted 65 yeas to 133 nays.
The House Republican vote was a slap down for the Bush Administration, which earlier Monday urged support for the bailout package noting that "much if not all, of the amounts provided for in the legislation to buy or insure troubled assets will ultimately be recouped." The statement of administration policy noted that the "true cost of this legislation should be far less than $700 billion."