From the WSJ:
By MICHAEL R. CRITTENDEN
WASHINGTON — A bipartisan group of U.S. House lawmakers defeated a $700 billion rescue plan for Wall Street on Monday, rejecting pleas from the Bush administration and congressional leaders from both parties of the potential dire consequences of policymakers not acting to help financial markets.
The 205-228 vote against the plan sent stocks plummeting, with the Dow Jones Industrial Average down around 500 points as news of the vote spread through Wall Street.
The defeat came despite House leaders holding open the vote for well beyond the 15-minute time limit, supporters were unable to convince enough members of either party to switch their votes against the proposal.
The defeat is a massive setback for the Bush administration, specifically the Treasury Department, as well as lawmakers who have been working throughout the last week on the legislation in the wake of the collapse of Lehman Brothers Holdings as well as the government’s bailout of American International Group Inc. and its takeover of Fannie Mae and Freddie Mac.
The White House expressed displeasure with the defeat of financial-market bailout legislation in the U.S. House of Representatives, and said President George W. Bush will meet with his economic team later Monday to determine the way forward.
“Obviously we’re very disappointed in the outcome this afternoon,” Mr. Fratto said. “There is no question that the country is facing a difficult crisis that needs to be addressed.”
Mr. Fratto said President Bush will meet with his team Monday afternoon and be in touch with congressional leaders.
The $700 billion rescue plan for Wall Street was defeated by a bipartisan group of lawmakers in a 205-228 vote. The vote, which was expected to be tight, is a sharp repudiation of the Bush administration and congressional leaders, who warned that failure to act would have dramatic implications for financial markets and the U.S. economy.
Earlier Monday, the White House said it believed it had the votes necessary for the rescue bill to pass.
President Bush, who tried to rally support for the package with a televised statement early Monday, had a list of a “couple dozen” lawmakers to call before the vote, Mr. Fratto said before the vote.