WALL STREET JOURNAL: A bipartisan group of U.S. House lawmakers defeated a $700 billion rescue plan for Wall Street on Monday, rejecting pleas from the Bush administration and congressional leaders from both parties of the potential dire consequences of policymakers not acting to help financial markets. The 205-228 vote against the plan sent stocks plummeting, with the Dow Jones Industrial Average down around 500 points as news of the vote spread through Wall Street. The defeat came despite House leaders holding open the vote for well beyond the 15-minute time limit, supporters were unable to convince enough members of either party to switch their votes against the proposal. The defeat is a massive setback for the Bush administration, specifically the Treasury Department, as well as lawmakers who have been working throughout the last week on the legislation in the wake of the collapse of Lehman Brothers Holdings as well as the government’s bailout of American International Group Inc. and its takeover of Fannie Mae and Freddie Mac. MORE
NEW YORK TIMES: Stocks took a dramatic plunge on Monday afternoon after the government’s bailout plan — touted by its supporters as a balm for the current market stress — failed to pass the House of Representatives, setting off a fresh wave of anxious selling. In yet another day that has shaken the embattled canyons of Wall Street, the Dow Jones industrials fell to a nearly 700-point deficit in the moments after it became clear that the legislation could not muster the support it needed to pass the House. After recovering slightly, the Dow was again down by 700 points shortly before 3:30 p.m.
EDITOR’S NOTE: This is the steepest, deepest Dow Jones plunge in recorded history.
POLITICO: Sen. John McCain (R-Ariz.) and his top aides took credit for building a winning bailout coalition – hours before the vote failed and stocks tanked. The rush to claim he had engineered a victory now looks like a strategic blunder that will prolong the McCain’s campaign’s difficulty in finding a winning message on the economy. Shortly before the vote, McCain had bragged about his involvement and mocked Sen. Barack Obama for staying on the sidelines. “I’ve never been afraid of stepping in to solve problems for the American people, and I’m not going to stop now,” McCain told a rally in Columbus, Ohio. “Sen. Obama took a very different approach to the crisis our country faced. At first he didn’t want to get involved. Then he was monitoring the situation.” McCain, grinning, flashed a sarcastic thumbs up. “That’s not leadership. That’s watching from the sidelines,” he added to cheers and applause. MORE
OBAMA: “This is a moment of national crisis, and today’s inaction in Congress as well as the angry and hyper-partisan statement released by the McCain campaign are exactly why the American people are disgusted with Washington. Now is the time for Democrats and Republicans to join together and act in a way that prevents an economic catastrophe. Every American should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point, but now that we are here, the stability of our entire economy depends on us taking immediate action to ease this crisis,” said Obama-Biden campaign spokesman Bill