U.S. lawmakers expected to pass $700 B bailout
CTV.ca News Staff
Published Sunday, September 28, 2008 8:13PM EDT
The White House and congressional leaders agreed Sunday to a massive US$700-billion bailout for the U.S. financial sector, after a deal was made for legislators to share spending controls with the administration.
The deal won the tentative support of both presidential candidates, Sens. John McCain and Barack Obama, and is set to go to the House of Representatives for a vote Monday.
The plan is intended to keep credit flowing, to rescue bankers from bad loans that could derail the U.S. and global economies.
Congress has insisted on controlling more of the $700 billion than the White House wanted. Legislators had to walk a tricky line between angry voters who care little about Wall Street bankers and the administration who are forecasting financial disaster without action.
The final bill was released Sunday night as lawmakers met privately to figure out how to vote.
"This isn't about a bailout of Wall Street, it's a buy-in, so that we can turn our economy around," Democratic House Speaker Nancy Pelosi said.
The bill would be the largest government intervention in the financial markets since the Great Depression.
U.S. President George Bush has also expressed confidence that the plan could be passed. But he acknowledged that Americans are angry that so much taxpayers' money could be used in the bailout for Wall Street's mistakes.
Bush will address the nation at 7:35 a.m. EDT Monday morning about the bailout plan.
Analysts, however, expressed caution whether the deal would be passed, even though leading lawmakers on Capital Hill says it has the votes to pass.
"It's not over until it's over. They've got to read the fine print," Vincent Reinhart of the American Enterprise Institute told CTV Newsnet on Sunday.
A group of House Republicans had objected to aspects of the initial bailout package. Some GOP leaders said they didn't like the idea of government intervention to prop up failing private enterprises.
"They'll be justifiably appalled. It does really raise the issue of fairness -- the idea that you would provide funding to the former masters of the universe during bad times when you don't take back the money they earn in the good times," said Reinhart.
But he noted that the bailout is necessary to prevent an economic freefall.
Negotiations to finalize details of the bailout are being watched closely by international investors and governments. Stock markets around the world have seen significant fluctuations and declines over the past two weeks.
Industry Minister Jim Prentice told CTV's Question Period that Canada has a strong banking sector. But he added that Canadians will be impacted by what happens in the U.S.
"Our officials are monitoring this very closely. No country is an island, and certainly there will be consequences for Canada with what happens in the American economy. But we've had very sound fiscal finances in the government of Canada," Prentice said.
With files from The Associated Press