Anger and confusion overwhelmed the House of Representatives on Monday as Republican legislators ripped into a $700bn financial rescue package backed by almost the entire US political establishment. Congressional leaders scrambled for an alternative course of action once it was voted down.
Powerful last-minute pleas by John Boehner, the House minority leader, and Nancy Pelosi, speaker of the House, were unable to prevent the defeat of the bill by 228 votes to 205, with Republicans voting by two to one against and divided Democrats unable to make up the difference.
“Nobody wants to vote for this; nobody wants to be anywhere around it,” Mr Boehner said at the end of a debate in which critics assailed the proposal and supporters provided only half-hearted backing.
“If I didn’t think we were on the brink of an economic disaster it would be the easiest thing in the world for me to say no to this.”
The defeat came despite a series of last-minute interventions by President George W. Bush in favour of the compromise package, hammered out in a frantic weekend of negotiations, and support from both John McCain and Barack Obama, the two presidential candidates.
But in exchanges on the House floor that revealed deep misgivings about the plan, Republican legislators led the charge against a measure they accused of threatening the very future of the US free market system.
“Reward people for being irresponsible and expect responsible people to pay for the sins of the financial industry? I don’t think so,” said Ted Poe, a Texas Republican. “Putting a financial gun to the head of every American is not the answer.”
Gresham Barrett, a Republican from South Carolina, said: “My fear is that today the government will be forever changing the face of the American free market. Because I believe so strongly in the principles of the free market and the belief in freedom, I will be opposing this bill.”
As markets reeled in the aftermath of the vote, Mr Boehner accused Ms Pelosi of undermining the bipartisan approach to the package in her summing up, which attacked the Republicans’ “failed economic leadership”.
“We put everything we had into getting the votes to get there today,” he said. “But the speaker had to give a partisan voice that poisoned our conference [and] caused a number of members we thought we could get to go south.”
But Democrats were quick to point out that the most votes and the strongest speeches against the bail-out came from the Republican side.
“There are 12 Republican members who were ready to stand up for the economic interests of America but not if anybody insulted them,” said Barney Frank, chairman of the House financial services committee. “Give me those 12 people’s names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are and maybe they’ll now think about the country.”
Some Republican insiders added that, faced with deep resentment within his ranks about such large-scale intervention, Mr Boehner did not push hard for a yes vote at a closed door meeting with Republican congressmen on Sunday. He conveyed his own displeasure at the measure, which he described as a “crap sandwich”.
“He doesn’t have the authority of past leaders such as Tom DeLay,” said one Republican aide, referring to the volume of letters legislators have received against the deal. “He was facing two groups of congressmen – people who set out a genuine, principled stance against this kind of intervention and others who were simply weighing the mail.”
Indeed, regardless of party, most congressmen facing difficult re-election fights in the November election voted against the legislation, with the two parties’ drive to win support focused on members in safe seats or those about to retire.