Bipartisan efforts put together the $700 billion financial bailout plan over the weekend. And bipartisan efforts killed it.
There were 95 Democrats — including Colorado’s 3rd District Rep. John Salazar — who joined 133 Republicans in the House Monday to reject the compromise bailout bill. The question now is: Where do we go from here?
We have a good idea of where stock markets will go. Down.
The Dow Jones industrial average suffered its worst single-day drop ever — 778 points — in the wake of the House rejection of the bailout legislation. Other markets also fell dramatically.
Then there was the news over the weekend that another banking giant, Wachovia Corp., was on the verge of bankruptcy. Citigroup Inc. agreed to buy Wachovia’s banking operations Monday, in yet another deal brokered by the federal government.
It’s not just the Armani-clad banking bigwigs who will feel the pinch if nothing is done, however. Without federal action to purchase mortgage-backed credit securities, credit for home mortgages and consumer loans will become even tighter. Then watch what happens to the already-ailing housing industry.
Congress members from both parties have received truckloads of comments in the past few days, from constituents who don’t want to see Main Street bail out Wall Street. But people on Main Street will be even more upset with their lawmakers if the failure of the federal government to take action turns this economic crisis into catastrophe.
Before Congress adjourns for the year, leaders must make another attempt to craft acceptable legislation to shore up the financial and mortgage industries. John Salazar and other members of Colorado’s congressional delegation have got to support it.