Yes, it’s true. The $700B bailout passed along with several other perks. In order for another vote to take place, law makers taped the bailout to an old bill that the senate never got around to voting on before.

Along with the bailout passing they also passed extending tax breaks for individuals using renewable energy (good!), a research and development credit for businesses (uhh… shrug), and another year free from paying the Alternative Minimum Tax.

Right, so best quote from Senate debate:

Sen. Richard Shelby, R-Ala., said the Senate will have “failed the American people” by acting hastily. “I agree we need to do something. … [But] we haven’t spent any time figuring out whether we’ve picked the best choice.”

Sen. Obama and Sen. McCain both voted in favor of the bailout, btw.

Now the bill heads to the House where the politicians are even more spineless.

UPDATE:

More details on what other completely unrelated laws were passed with the $700B bailout bill:

• Sec. 105. Energy credit for geothermal heat pump systems.
• Sec. 111. Expansion and modification of advanced coal project investment credit.
• Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund.
• Sec. 115. Tax credit for carbon dioxide sequestration.
• Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
• Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
• Sec. 309. Extension of economic development credit for American Samoa.
• Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
• Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax credit.
• Sec. 503 Exemption from excise tax for certain wooden arrows designed for use by children.

[hattip: theagitator]

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Yeah, it’s true, we’ve had several posts about the $700 billion bailout plan on this site and I’m expecting to post several more in the future.  Why?  First because it’s THAT huge for the American economy. Second because it’s drastically effecting my exchange rate in Israel and I need my hummus.  (Let’s be honest here.  The closer to home this thing hits, the more we pay attention.)

Everyone was all excited for this damn thing to pass so that we could finally start walking on the road to financial healing.  But why didn’t Congress pass it bill?

Politicker gives an interesting theory as to why the majority voted no:

There are 41 incumbent House members on Politicker.com’s The Pindell Report of the nation’s most competitive House races. Of that group 31 voted against the bailout, possibly proof that that a yes vote might be politically toxic just a little over a month from Election Day. Of the four House members running for the Senate only Maine’s Tom Allen voted for in favor.

Ok, so it’s because the politicians don’t want to make a mistake that would jeopardize their reelection. Because who wants to vote for the guy who had a hand in the bankruptcy of the United States?

Let’s be sure that we acknowledge that there are MANY reasons besides reelection that effected the vote:

Even Congressional leaders admitted on the House floor that this was less than a perfect bill for any member. Conservatives said the bill would was basically socialism. Liberals said the bill didn’t do enough to protect the Middle Class.

The bill simply doesn’t sit well with most Congressional leaders; both Liberals and Conservatives.  Maybe it takes a crisis like this to finally create bipartisan leadership.

See also Anatomy of the Bailout Breakdown from Time.

Popularity: 3% [?]

If you’re like me then you’ve been hearing all sorts of mentions about the Bailout but not finding many explanations (even from our Presidential Candidates, because they didn’t seem to be able to answer any questions about it on Friday night either).

It’s hard to find a single coherent description of what it actually is (aside from it cost $700 billion).

Apparently Congress has come to an agreement on one of the biggest government involvements in the financial market since the Great Depression, and here’s what I have been able to fathom…

The Treasury will get the previously mentioned $700 billion in smaller portions one at a time to purchase mortgages from failing lending companies either at a predetermined price, or in a bid with the market itself. Once the Treasury buys up the debts, they will then sell them in an attempt to make the money back. I’ve heard there’s a provision in the event the gov’t doesn’t make it’s money back, but haven’t heard anything about what it might actually be. Not sure who we’re selling it to in the effort to make the money back too. Aaaannnnd… yeah, that’s about all I’ve got right now.

The only other thing I’ve seen is that pretty much no one in government seems happy about the Bailout; McCain, Obama, Pelosi, etc… and they’re only going through with it because they all somehow came to the same agreement that it had to happen, because if it doesn’t happen, the whole U.S. will suddenly collapse or something.

I guess we’ll see what happens.

UPDATE: 29 Sept 08 Afternoon

I suppose it doesn’t matter now what the details of the Bailout are, or should I perhaps say were… as the House of Representatives voted against the bill 228 to 205, with 2 non-votes.  As a result, stocks are plummeting and the gov’t going right back to the drawing board.

UPDATE:  30 Sept 08 5:13 am (from Ms. Missive)

Kevin Drum over at Mother Jones muses why the financial crisis still isn’t 100% clear to the public:

Our current financial crisis has never been explained well to the public because (a) it’s mind-bogglingly complex and (b) even the experts don’t entirely know what’s going on. And the Paulson plan was never sold well because (a) the initial draft was indefensible and (b) the theory underlying it was uncertain and complicated.

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