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Financial Rescue Measure Is Signed By President
FINANCIAL RESCUE MEASURE IS SIGNED BY PRESIDENT
CNBC staff and wire reports
| 03 Oct 2008 | 03:01 PM ET

President Bush has signed into law a far-reaching $700 billion bill to bail out the nation's tottering financial industry, shortly after it won final approval from Congress.

The president signed the measure at his desk in the Oval Office. Photographers were invited in to capture the moment.

The president signed the bill after returning from the Treasury Department where he thanked employees for their work on the rescue package.

The House approved a revised $700 billion financial rescue package, ending a weeklong battle over a controversial measure after lawmakers came under pressure to head off a growing financial crisis.

The plan, which was already approved by the Senate, would allow the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets from troubled financial institutions.

If it works, advocates say, that would allow frozen credit to begin flowing again and prevent a serious recession.
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US stocks, which had rallied earlier on hopes of approval, began paring their gains after the measure was passed.

The dollar fell against the euro while oil prices fell back.

After the House rejected the initial measure on Monday, the Senate revised the bill, adding billions of dollars ot tax breaks to sweeten the package, and approved it Wednesday night.

In efforts to appease GOP opponents, the revised measure includes raising the limit on federal insurance for bank deposits from $100,000 to $250,000.

The bill also extends several tax breaks popular with businesses, provisions that are favorites for most Republicans.

It would keep the alternative minimum tax from hitting 20 million middle-income Americans, which appeals to lawmakers in both parties.

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And it would provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.

A Republican member of the House Financial Services Committee told CNBC shortly before the vote that he believed there were enough votes in the House to pass the bill.

"We feel like we do" have enough 'yes' votes," Rep. Adam Putnam of Florida said. "(House) Speaker (Nancy) Pelosi has said she will not bring the bill to the floor if it doesn't appear they have the votes to pass it."

He said both Democratic and Republican leaders had been talking to their members to line up the votes.

He said public comments had indicated a number of lawmakers who had voted against the bill on Monday had been persuaded to vote for it by new data or changes that had been made to the bill.

"I'm optimistic about today," House Minority Leader John Boehner told reporters earlier. "We're not going to take anything for granted. We're going to continue to talk to our members. But it's time to act on behalf of the American people. It's about their savings. It's about their jobs."

Earlier, the US reported its biggest monthly job loss in 5 1/2 years, coming on top of a pile of economic data pointing to an approaching recession. Data showed the U.S. services sector holding up.

"The data has been horrible all week long. It absolutely does put pressure on them to get this rescue act passed," said Fred Dickson, market strategist at D.A. Davidson in Lake Oswego, Oregon. "It's a bill with risks, but it's a plan and the market needs a plan."

—AP and Reuters contributed to this report.
© 2008 CNBC

URL: http://www.cnbc.com/id/27010467/