House starts debate on bailout bill

Eddie Evans
Reuters
Friday, October 3, 2008

NEW YORK (Reuters) – The House of Representatives started work on a $700 billion bailout package for U.S. banks, under pressure from all sides as the effort to head off a spreading financial crisis hung in the balance.

With a vote expected around noon, the White House, congressional leaders and even foreign leaders pressed wavering members to vote for the package, after the House defeated a similar one on Monday.

The bill would allow the Treasury to buy toxic debt from U.S. banks, which many economists said is needed to head off the worst financial crisis since the Great Depression.

In Paris, French Prime Minister Francois Fillon said the world stood on the “edge of the abyss.”

(ARTICLE CONTINUES BELOW)

House leaders were still working the phones as the bill was being considered. “I’m optimistic about today. We’re not going to take anything for granted,” said House Republican leader John Boehner. “We’re going to continue to talk to our members but it’s time to act.”

• A d v e r t i s e m e n t

Earlier, the United States reported its biggest monthly job loss in 5 1/2 years, coming on top of a pile of economic data pointing to an approaching recession. Data showed the U.S. services sector holding up.

“The data has been horrible all week long. It absolutely does put pressure on them to get this rescue act passed,” said Fred Dickson, market strategist at D.A. Davidson and Co in Lake Oswego, Oregon. “It’s a bill with risks, but it’s a plan and the market needs a plan.”

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