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Bush: $700bn bail-out will stop crisis spreading
Martin Bentham, Home Affairs Editor29 Sep 2008
George Bush today claimed that the $700billion US bank bail-out would help to halt the world financial crisis as he appealed to Congress to back the rescue package.
President Bush said the huge investment by American taxpayers would address the "root cause" of the problems which have seen credit markets across the world freeze up and the banking system plunged into disarray.
Mr Bush's comments were delivered in an early morning statement from the White House. The deal was agreed in the early hours yesterday after lengthy wrangling with critics in Congress worried about safeguards in the plan.
The President appealed for a swift endorsement of the legislation - the Emergency Economic Stabilization Act - which goes before the House of Representatives today. The Senate will get a vote later in the week. Mr Bush said it was a "bold Bill that will help keep the crisis in our financial system from spreading throughout our economy".
He added: "I'm confident that this rescue plan, along with other measures taken by the Treasury Department and the Federal Reserve, will begin to restore strength and stability to America's financial system and overall economy."
The President said he understood concerns about the large amount of money involved, but added that it was necessary to have an impact.
"In fact, we expect that over time much, if not all, of the tax dollars we invest will be paid back," he said.
Stock markets in Asia gave a downbeat reaction to the news that Washington had agreed the outline of the bail-out. In Hong Kong, the Hang Seng index fell 669.13 points to 18,012.96 while Tokyo's Nikkei closed 149.55 down at 11,743.61. In Singapore shares fell 32.45 to 2,379.01. Asian investors said they were still deeply worried about the lack of detail in the rescue plan. Agreement on the 110-page Bill "to provide authority for the federal government to purchase and insure certain types of troubled assets" was reached early yesterday after days of intense negotiations. At one stage an exhausted Hank Paulson, US Treasury Secretary and architect of the scheme, suffered "a woozy spell" and had to take a break.
As the world watched, all the participants in the talks agreed to put their BlackBerry mobile devices in a bin to stop details leaking out.
The outline deal was finally struck at
12.30am yesterday. Congressional leaders said they had secured key concessions that would give more protection to taxpayers than the initial draft.
Democratic Senate leader Harry Reid said: "They wanted a blank cheque and we couldn't give them one... Now we have to get the votes."
Four agencies will monitor the deal, including an independent inspector general and a bipartisan oversight board.
Reader views (5)
U R All Messed Now!!!!!
- John Smith, VAN Canada, 30/09/2008 22:36
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If two small UK banks, Northern Rock and B & B, cost the UK taxpayers almost US$100 billion in rescue, is a mere US$700 billion going to really help repair the balance sheets of some of the largest US banks? What a stupid notion and a big con because after approving this US$700 billion, there will surely be another request for another big bailout.
- George, London, UK, 30/09/2008 02:02
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This is NOT a crisis. The democrats are screaming "Crisis" no way. Let the market solve the problem. We will hit bottom and then the market will recover. The market will be up again. Whilst waiting how about a nice cuppa?
- John (Brit Exp Pat), Phoenix USA, 30/09/2008 00:16
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Once before Mr. Bush told his Republicans vote quickly and they ended up with a War that all the Republicans are trying to distance themselves from. This time he said, hurry I need the money to save you guys - not this time George the Republicans said - we did that once and got burned and it won't happen again. Down goes Frazier.
- Rich, San Angelo USA, 29/09/2008 22:26
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No to bail out; no more big govt take over. We do not want communism in the USA. Most of those pushing this bill through in a rush is for their personal gain. Some of those who caused the problem are part of those pushing for the bail out. I do not trust 99.9% of our congress and the house. I am steamed.
- Lydia Borin, Tampa, FL, 29/09/2008 19:40
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