The bailout failed the first time it was brought to the
House. Undaunted, the Senate pressed on by attaching the bailout
as an amendment to another House passed bill that was pending in
the Senate. The new bailout version had new taxes, so according
to the Constitution it should not have originated in the Senate.
The rallying cry heard all over the Hill the past two
weeks was that Congress must act. Our economy is facing a
meltdown. Would this bill fix it? Nobody could really explain
how it would.
In fact, few demonstrated any real understanding of
credit markets, of derivatives, of credit default swaps or
mortgage-backed securities. If they did, they would have known
better than to vote for this bill.
All they knew was that this administration was saying
some frightening things, and asking for a lot of money.
And when has Congress ever been able to come up with a
better solution to a problem than to throw more of your money at
it? So that is what Congress did, enacting a financial
PATRIOT Act in the process.
In its embarrassment at being called a "Do-Nothing
Congress" the 110th Congress took decisive action and did
SOMETHING. No matter that it was the wrong thing.
In fact, it wasn't until the Senate had a chance to load
it up with even MORE spending, when it was finally inflationary
and horrible enough, at $850 billion instead of a mere $700
billion, that it passed and with a comfortable margin, in
spite of constituent calls still coming in overwhelmingly
against it. 57 members switched their vote!