In a stunning vote that shocked the capital and worldwide markets, the House on Monday defeated a $700 billion emergency rescue for the nation’s financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nose-dive without it.
The Dow Jones industrials plunged nearly 800 points, the most ever for a single day.
Democratic and Republican leaders alike pledged to try again, though the Democrats said GOP lawmakers needed to provide more votes. Bush huddled with his economic advisers about a next step. The House was to reconvene on Thursday instead of adjourning for the year as planned.
Maryland Rep. John Sarbanes, D-District 3, voted in favor of the stabilization plan but called the vote “difficult.”
“A part of me would like to see these bad actors on Wall Street suffer the full consequences of their conduct without the benefit of government (and taxpayer) intervention,” Sarbanes said in a statement. “But over the last few days, I became increasingly convinced that if we did not do something to restore confidence in the financial markets, the real victims would be America’s working families.”
Sarbanes added, “As the markets continue to exhibit volatility, it is my hope that we can move quickly to make necessary adjustments to ensure passage of a bipartisan solution.”
Sen. Ben Cardin, D-Md., in a statement called for Democrats and Republicans to “work in a bipartisan way” to solve the economic crisis.
“Inaction is not an option,” Cardin said. “I urge my colleagues to use the next few days to talk to their constituents and talk to each other to find the right solution to this crisis.”
Sen. Barbara Mikulski, D-Md., in a statement said an economic rescue plan was needed and must include “rigorous reform” that protects taxpayers from paying for Wall Street’s mistakes.
“It must make sure that taxpayers are protected, families get help to stay in their homes and CEOs who caused this crisis don’t get golden parachutes,” Mikulski said. “Congress must take steps to protect our economy, our middle class and our way of life.”
Stocks began falling even before the 228-205 vote to reject the bill was officially announced on the House floor. The 777-point decline — a nearly 7 percent drop — for the day surpassed the 684-point drop on the first trading day after the Sept. 11, 2001, terror attacks.
The Dow sunk 22.6 percent when stock markets around the world crashed on Oct. 19, 1987, known as “Black Monday.” During the crash of 1929, the stock market sunk 12.8 percent on Oct. 29, 1929, another “Black Monday,” which signaled the start of the Great Depression.
Treasury Secretary Henry Paulson looked grim after the House rejected the plan.
“We need to work as quickly as possible,” Paulson said. “We need to get something done. We need to put something back together that works.”
More than two-thirds of Republicans and 40 percent of Democrats opposed the bill. In all, 65 Republicans joined 140 Democrats in voting “yes,” while 133 Republicans and 95 Democrats voted “no.”
The House Web site was overwhelmed Monday as millions of computer users sought information about the financial bailout bill rejected by the House.
“We haven’t seen this much demand since the 9/11 Commission Report” was posted on the site in 2004, said Jeff Ventura, spokesman for the House chief administrative officer. “We’re being overwhelmed with Web traffic about the bill.”
The Standard & Poor’s 500 Index was down 106.62 points, or 8.8 percent, at 1,106.39. The Nasdaq Composite Index was down 199.61 points, or 9.1 percent, at 1,983.73.
How Maryland voted
For the rescue plan
- Wayne Gilchrest, R-1st
- Steny Hoyer, D-5th
- Dutch Ruppersberger, D-2nd
- John Sarbanes, D-3rd
- Chris Van Hollen, D-8th
Against
- Roscoe Bartlett, R-6th
- Elijah Cummings, D-7th
- Donna Edwards, D-4th
Local stocks
Here’s how some of the Baltimore area’s largest publicly traded companies’ stock prices fared Monday.
Company Open Close Change Percent
from Friday Change
T. Rowe Price $59.21 $50.00 -$10.93 -17.9
W.R. Grace $16.32 $13.75 -$2.97 -17.8
Ciena Corp. $11.44 $9.55 -$2.06 -17.8
Legg Mason $43.29 $37.14 -$7.75 -17.3
Foundation Coal $36.46 $31.90 -$6.08 -16
The Associated Press contributed to this report.
