All eyes this morning were on the stock market, which fell almost 7 percent Monday (Sept. 29, 2008), as local Congressmen joined a majority of their peers in the House of Representatives and rejected a proposed $700 billion government plan intended to ease the nation’s worrisome credit crisis.
Within a hour after opening today (10:13 a.m.), both the Dow Jones industrial average and the Standard & Poor’s 500-stock index were up significantly. A New York Times report claimed the markets “reflected optimism that Congress may still act this week to approve an economic rescue plan.”
Republicans Rep. Charlie Dent, whose 15th District includes Lower Pottsgrove (PA) Township and Sanatoga, and Rep. Jim Gerlach, whose 6th District includes much of the rest of the greater Pottstown PA area, both opposed the federal bailout.
Dent, in a statement issued yesterday afternoon, said he agreed Congress should “stabilize the financial markets and bolster consumer confidence.” But the bailout, which Dent characterized as one in which “Wall Street would benefit at the expense of the taxpayers,” was unacceptable, he said.
In a similar statement, Gerlach said he sees a consensus on both sides of the political aisle that the government “can and should do a better job on a financial rescue plan … Congress needs to get the job done right.”
By late Monday, the Federal Reserve had already reacted to the House’s rejection of the bailout. The Fed “and foreign central banks moved to pump billions of dollars to cash-strapped banks at home and abroad in a dramatic bid to break through” the credit clog and spur lending, the Associated Press wrote.
What happens in the aftermath of the bill’s defeat is a matter of speculation. A U.S. News And World Report article Monday suggested the bailout plan may be re-written and re-visited for a vote again later this week; that parts of the plan could be broken out and voted on individually; or that federal regulatory agencies empowered to deal with specific problems – like the Federal Deposit Insurance Corp.’s interventions with failing banks – could act on their own on some parts of the bill.
Editor’s note: This article has been updated since its initial publication.