Monday's stunning defeat in the U.S. House of a $700 billion package to stabilize financial markets and restore investors' faith may have boiled down to semantics. As Republican presidential nominee John McCain noted Tuesday, its perception as a bailout of Wall Street prompted opposition from millions of Americans who saw it only as a taxpayer-financed giveaway to high-flying executives whose colossal greed and irresponsibility led to this debacle.
That's why it's so important for our national leaders to reframe the proposal. It must reflect the reality and the appearance that this is also a rescue of the American economy that will preserve small businesses, enable workers to keep their jobs and homes and protect the savings and retirement plans of many millions of hard-working citizens. Make no mistake: the failure of Congress to act in this ongoing drama would be tantamount to walking away from the biggest economic challenge in eight decades.
It's hard to be encouraged about the prospect of success, given the finger-pointing in Washington that preceded and followed the 228-205 vote against the plan Monday. Roughly two-thirds of House Republicans voted against President Bush's plea for support, a sign of how little faith GOP members had in their own president. About three-fifths of Democrats supported it, while two-fifths ignored their own speaker's wishes.
Many no votes were political reactions, cast to reflect the widespread anger over committing $700 billion in taxpayers' money to bail out the very companies whose excesses and failure of sound judgment led to this mess. Many worried it was too vague, allowing government officials to pay too much for sour loans, making it unlikely that the U.S. treasury can recoup much of the money. Others believe it should raise the federal deposit guarantee from $100,000 to $250,000, as McCain and Barack Obama advocate.
Those are rational concerns, and the House's defeat of a measure vital to the nation's economic health was not necessarily a bad thing. It has forced the White House and congressional leaders to think harder about what shape the rescue plan should take.
But with that rethinking must come a national realization that, like it or not, rescuing the U.S. economy will require measures that will save not only the ship, but some of the most reprehensible rats aboard as well. It's time to act.