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Bailout Bill Fails on House Floor
Aired September 29, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Ed Henry, let's go back to you there in the D.C. bureau.
A lot at stake here for President Bush. This is, you know, he's the main guy here that wants this signed off on, both by Congress and the Senate. So let me ask you, is it possible -- first of all, can you have cell phones down there on the floor? Is it possible that those within the White House are calling their counterparts there?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: It is possible. Let me tell you, that Medicare vote that Kate is rightly pointing out, I remember that one well. I was covering the hill at the time, and basically this was happening in the middle of the night and the president was still calling members of Congress. But they were doing it in the cloakroom because technically you're not supposed to have cell phones on the floor. You see members all of the time take one they're out, they're told to go into a lobby with them.
But the president of the United States was still calling members in the cloakroom of the House, just off the floor, sort of a private area for members of Congress. That was very dramatic. I can tell you as well, there were cabinet secretaries for that Medicare vote. We can't see here how many people are off camera in other nukes and crannies on the House floor. But there were cabinet secretaries from the Bush cabinet for that Medicare vote, years ago, twisting arms on the floor, trying to change it.
So far, we've only seen essentially from when I last spoke to you one Republican switch their vote. When last we spoke, there were 133 nays in the Republican column. Which is significant. That shows you where the majority of the no votes are coming. They're coming from House Republicans. We've known all along they were skeptical. Now it's down to 132. Only one Republican member, we don't have the name yet, has switched to the yea side. And I think --
PHILLIPS: So what is the sticking point, Ed? What do you think the sticking point is? Why do you think this wasn't -- well, nothing was going to be easy in this process, but why has it reached this point and why is there a lot of negotiation going on and why has only one person changed their mind? What do you think the sticking point is or do we know yet?
HENRY: A number of things. As Jessica Yellin was pointing out before, there are, some of the House Republicans saying, look, we've heard from the White House before that the sky is going to fall. We heard about WMD, that didn't turn out right with Iraq. We've heard all kinds of warnings and it didn't pan out. And so while they see that the markets are going through a lot of strain, they're not sure that it's going to be quite as bad a scenario as the administration is laying out so they're skeptical.
Number two, Republicans by nature are in favor of free markets. They don't -- they're very suspicious of the fact that the government is taking such a large role, not just with this bailout but the previous bailouts. We have to remember and put this in context, there's been a series of government interventions that have really alarmed a lot of conservatives, not just on Capitol Hill but around the country.
Third, you have to point to the fact that every single member of the House, all 435, are up for reelection every two years. While the Senate, only one third of them are up. Every single House member is up in November. Democrat, Republican, Independent, you're up for reelection. And their constituents, many of them are calling and saying, why is Wall Street being bailed out while people on Main Street are not being helped? That's their view. They may be wrong, maybe this plan could help people on Main Street, but the view right now is very much against this on Main Street.
Susan Lisovicz was pointing that out. The way this was sold to the American people, it was not done very well in terms of getting away from a focus on a bailout of Wall Street, focusing instead on helping people on Main Street. You have to look at the stakes for President Bush. This will be a devastating loss for this president if in fact the votes do not change. Look at what he did in the last week. He used all of the bully pulpit that he could, including a primetime address to the nation just on Wednesday night, and it did not win over enough Republicans -- Kyra.
PHILLIPS: Well, and you bring up a really good point. This is massive legislation. Hoping to bail out the stress, overly stressed financial industry. It's hanging near defeat right here on the floor of Congress.
Ali Velshi, put it into perspective. We saw, I think it went as high -- the Dow industrials went down as low as 705.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, yes.
PHILLIPS: A high number. Low number with regard -- but it's stabilized now at 459. Why is it stabilizing?
VELSHI: First of all, we haven't seen a number with a seven in front of it since September 17, 2001. That would have been bigger than the loss we saw on that day in point terms. In percentage terms, just to put this in perspective, we are not even in the top 10 percentage losses for the day. Before anybody gets panicked about this, this isn't the day to panic.
By the way, when you look at that Dow down 479, it should be an indicator that the market is not panicked right now. That it goes down to 705 points lost and pulls back up means there's some people in there who are saying, I see what's going on there. If you're split by a few votes, there's a way to work this out. Traders are like the rest of us, not entirely sure of how the rules work on the floor of the House.
As you saw less than a minute left to go on the clock, I don't think the rest of us understood, as one of my colleagues told us, it's like a soccer match. It doesn't mean it's over. You saw that market plummet. You saw it go well past the 300s where it was to 400 to 500 to 600 to 700 points lower. But as soon as the reporting came out that hold on, this thing is not a done deal, you started to pull back. The Dow has been down more than 250 to 300 points all day. So that is 480 points now, Kyra, suggests to you that people are quite concerned about this not passing, but it is not the -- the tragedy that it may look like when you're watching numbers that you've never seen on your screen before about the Dow.
So I should tell you and Susan can tell you, right now while these numbers are dramatic, they're not percentage losses. When we look at markets, when you look at your 401(k), your IRA, you look at percentage losses. These are not any where near the top 10 that we're seeing. They do not symbolize a crash or a freefall or a meltdown or anything like this. This is a reaction in the market to what we all don't understand is going on inside that room that we've got the camera on. I just want to give you that perspective.
PHILLIPS: What is your take, Ali, when we look at what is happening here. Just to remind all our viewers right now, welcome our international viewers as well, as we look at these numbers. You know, obviously the gavel has not come down -- oh, wait a minute. Was that the gavel? Let's take a listen.
UNIDENTIFIED FEMALE: Without objection, a motion to reconsider --
I have an inquiry.
UNIDENTIFIED FEMALE: The gentleman from Texas rise.
UNIDENTIFIED MALE: I have a parliamentary inquiry.
UNIDENTIFIED FEMALE: The gentleman will state his parliamentary inquiry.
UNIDENTIFIED MALE: As the vote currently stands, the nos have it, and I am on the prevailing side. If I were to move to reconsider, when would the chair bring the bill back up?
UNIDENTIFIED FEMALE: The motion to reconsider would be entered and disposed of at this time.
UNIDENTIFIED MALE: It would be immediately? Is that not at the -- at the discretion of the chair?
UNIDENTIFIED FEMALE: If the motion is offered, the chair will put the question.
UNIDENTIFIED MALE: I'm sorry, i didn't hear you.
UNIDENTIFIED FEMALE: If the motion is offered, the chair will put the question.
UNIDENTIFIED MALE: Put the question?
UNIDENTIFIED MALE: I withdraw, madam speaker.
UNIDENTIFIED FEMALE: Without objection, the motion to reconsider is laid upon the table. The unfinished business is the question on suspending the rules in passing HR 7175 which the clerk will report by title.
UNIDENTIFIED FEMALE: HR-7175 the bill to amend the small business act to improve the section 7A lending program and for other purposes --
PHILLIPS: OK. So Ed Henry, I want to bring you in from the D.C. bureau because I saw her hit down on the gavel and then it went straight to one of the lawmakers discussing about, OK, if I change my mind on this, where would it go or when would it come back into play. So kind of explain to me what's going on. We were taking possibly the gavel as, OK that's it, votes are in, we're moving forward, but that's not what's going on.
HENRY: Well, it looked like they were moving on to small business improvements and other businesses, which would suggest they're moving on. They could come back. They would have to go to the House Rules Committee and try to bring this up again if they feel like they have the votes in a couple of hours or tomorrow. They could also, as you were talking with Kathleen Koch, try to come up with a second bill. I think what would have to happen now, frankly, is there's a lot of confusion. You could see that wide shot now. People on the House floor, both parties trying to figure out --
PHILLIPS: And we're confused. We're trying to figure out what's going on.
HENRY: What's next? I think one very strong possibility that I've seen many times is when there's a vote like this where something goes down, you'll end up -- start seeing -- you'll see both parties huddled into various conference meetings behind closed doors and figure out, OK, what went wrong? And the Republican leadership will go to those 133 because now by the way it switched.
We were talking about 132 members who had -- Republican members who were against. It switched back to 133. So somebody decided another no vote. They'll go to those 133 and say, look, what is the biggest sticking point? What can we do? How can we change this? And try anything and everything that they can. I think that this is such a critical vote that I would be very surprised if Speaker Pelosi just decided to pull the plug altogether and say, look, we're going home for the election. I think she has a lot invested just as much maybe as President Bush does.
PHILLIPS: Well I'm looking at the wires, Ed, and the wires are actually saying that the bill was defeated. Here we go. The House of Representatives rejecting a $700 billion plan to bailout the financial system, putting a road block in front of the largest government intervention in the market since the Great Depression. OK, so it's crossing the wires now that it's been defeated. So where do we go from here?
HENRY: They have to start over.
PHILLIPS: Completely start over?
HENRY: Well, this bill is not passing in its current form. It's very clear. All of this attention focused from the presidential lobbying I talked about for the last week to the fact that we were all here all weekend watching the maneuvering, we've got a deal, we've got an agreement, all of this stuff among the leadership, the bottom line remains what we've known for days, that rank and file lawmakers in the House, especially Republicans, are just not onboard with what they're being served. They're saying we're just not going to eat this.
And so I think that very clearly that Speaker Pelosi and John Boehner, the Republican leader, are going to have to sit down now. They probably already are and are going to be very quickly, saying, where do we go from here? You can bet they will be burning up the phone lines to the other end of Pennsylvania Avenue from the president to the vice president, what is next, what do we do? Because I think the White House very clearly will be pleading with the Democratic leadership not to adjourn this Congress to go home for the election, which is what everyone has been wanting to do in recent days.
You see what's going on with the Dow. It's now almost down 600 points as you've rightly been pointing out.
PHILLIPS: It was stabilizing. Now it's going back up.
HENRY: Because basically down 578 because the markets are watching this closely and they realize that now the chances are decreasing of some sort of a federal bailout. So Boehner and Pelosi are going to have to get together and say where do we go from here? It's clear that the bill they have right now is not going to work despite all of their best efforts.
They have to sit down and essentially start from scratch, pull something out, put something else in. This is where you really see sort of the horse trading that goes on in the back rooms still in the capitol to say how do we get those votes? And I'm telling you, they have to go to those 133 Republicans and figure who voted no and say, what will it take?
PHILLIPS: Why didn't you do it? And then go back to the drawing board, rework the whole bailout plan to try to accommodate those who said, no way.
HENRY: Yes.
PHILLIPS: Let me ask you a question, Ed. Do you think, what -- bottom line, what does this come down to? We are weeks away from voting for a brand new president of the United States. The Bush administration strongly -- there has been so much controversy from the economy to the war in Iraq. What is this telling us? Is this telling us that no matter what President Bush pushes for, what his administration pushes for, that it's just -- it's not going to fly because there is no faith in this president and what he's pushing for? Or is there -- are there really some strong sticking points in this plan that people are discussing and thinking, this is a lot to bear and we just don't want to make the wrong decision?
HENRY: I think it's both, frankly. I think you start with the latter that you're pointing out. That what's in this bill is just not palatable to a majority of the House of Representatives. They always talk about both parties, the Congress has to work its will. They've just worked their will, and they do not have the votes. It's a simple bit of mathematics. Now why don't they have the votes? That gets back to the president. That's connected here.
I remember very clearly covering the hill in the early part of the Bush administration. This president had a Republican Congress for most of the time. They didn't agree on everything he wanted, but at the end of the day he most of the time got Speaker Hastert, Senator Lott, the other leaders to go along with what he wanted. Now he has a totally different ball game. He's got Democratic leaders who are opposed to him a lot. In this case, they're actually onboard, Pelosi, Hoyer and the others, Harry Reid.
But he has Republicans who are saying, look, we're just not there for you anymore. You've had the president personally intervening over and over again and it doesn't really look like he has the juice to get this done, Kyra.
PHILLIPS: Wow. No juice to get it done. That's pretty frightening right now when you see what everybody is going through in these tough economic times. Losing jobs, can't even fill up the gas tank. Now if you're just watching, Ed Henry, thank you so much, stay with us.
If you're just tuning in, we want to welcome our international viewers as well. The House of Representatives here in the United States rejecting the $700 billion bailout plan to try and save the financial systems here in the United States, putting a tremendous road block right in front of the largest government intervention in the market since the Great Depression.
Putting it into perspective from a financial view, Ali Velshi once again, the Dow industrials down 510. It went as low as 705. It started to stabilize, but here we go again. Now that it's been rejected, we're seeing the numbers drop.
VELSHI: We're in a range here, definitely, 506 where we are right now. I'd make it about the fourth largest drop on a point level ever. But at 700 points where it was a while ago, that would be the biggest drop we've seen in a day. Now, to give it a perspective, the percentage drop right now is substantially less than -- than even enough to make the top 10 in history. So the market is trying to figure this out. I guarantee you that there are people on the floor of the New York Stock Exchange probably Susan has spoken to them, who were not clear on the fact that when that vote came to an end, you know, when it first looked like it came to an end and the market sold off that it wasn't done. So that's why we saw that sell off. Then we realized that had been extended and then we found out that, you know, we don't know where we are. I think we don't know whether this -- in this fashion is done or whether it comes back.
So this is what's happening. You're seeing traders getting instructions from their houses to say, where do we go with this? What exactly does this mean? Are we still in that holding pattern that says it's going to come back? I should tell you, in the world that we are in right now, Kyra, a 500-point drop, there are times when that would be very alarming. I think right now this is a sign that Wall Street is very uncertain about what this means.
Again, I want to reiterate to folks that the market would see a substantial sell-off if it thought this deal in no fashion was getting done. Most of the things that held this deal up for the last week do not have a substantial effect on Wall Street or your investments. In other words, the thing that mattered was that a deal was going to get done and money was going to start flowing into the credit market. The specificities weren't that important. So what Wall Street wants is a deal done so that companies can start being able to borrow money and that can trickle its way down to Main Street. But Susan said, this didn't sell as a Main Street plan, it sold as a Wall Street plan and that's what the problem is.
PHILLIPS: And the deal isn't done, Ali, stay with me.
Hopefully Richard Roth can answer this for us, he's there on Wall Street actually with a broker. Tell us what this means please Richard. Have the broker put in perspective what it means for all of us right now. No deal is done. The deal has been defeated there on the House. The $700 billion plan to bail out the financial system.
What do investors, your average Americans, someone who is dealing with a foreclosure, trying to get a mortgage, what does this mean?
RICHARD ROTH, CNN CORRESPONDENT: Well, all day we've been talking to people down here. Many floor traders and brokers didn't want to go on camera and talk but they were looking for Congress to approve this plan. With me now is a floor trader on the stock exchange, Craig Garon. What do you think? What's happened? Now with the reaction to the congressional turn-down in the House of this bailout bill, what does it mean?
CRAIG GARON, QUATTRO SECURITIES: Well, I really think that the Congress should sit down instead of blaming each other for what -- whatever the reason is, who's to blame, they should sit down and get this bill done and stop blaming Wall Street for all the dos and don'ts and get the bill done because it's not Wall Street's fault, this is a nationwide problem. It's a distress problem, and they should just get the bill done and then blame people afterwards and we can go on with our lives. ROTH: Where is the market going? Earlier you gave me a little bit of a dire prediction. You said if this bailout bill really goes down, what are you predicting?
GARON: Well, I think if the bill isn't passed for the second time, I think we could be down maybe 10 to 20 percent in the market.
ROTH: Meaning more than 1,200, 1,300 points.
GARON: Probably between 1,000 and 1,500 points in the marketplace today given that they don't pass it for the second time. I truly believe Pelosi and Congress and all of the senators, they have to stop blaming each other, get to the point, get the bill done, and go on and get the public secure so we can go on and everybody can go on with their lives.
ROTH: You don't think Wall Street was unfairly singled out, right? Wasn't there a lot of bad practices done?
GARON: There were bad practices done nationwide, it wasn't just Wall Street. Hedge funds, broker dealers, they're all over the country. They shouldn't be pointing at Wall Street outright. That's not right. They're doing the wrong thing.
ROTH: A lot of people have been told for years the buy and hold investment strategy. Should people still be holding on or should they be selling or is that panicking?
GARON: I think it's a bit of panicking, but depending on your age bracket, that's a choice of your own.
ROTH: What is the atmosphere where you're trading all day today?
GARON: Very dismal. We're a little upbeat. We thought Congress might pass it because of the language over the weekend. But I think the language has to get a lot deeper for the bill to be passed.
ROTH: What does that mean? What do you want to see that you're not seeing so far?
GARON: Well, they have to guarantee that the people will be protected after the fed takes out the $700 billion.
PHILLIPS: Richard --
GARON: They want the people protected on the tax side within the next couple of years so there's no more damage.
ROTH: Our anchor, Kyra Phillips --
PHILLIPS: Do me a favor Richard, ask Craig a question for me because you've got him right there. He's saying don't blame Wall Street, yet we've got an FBI investigation into the corruption of all the high-rollers on Wall Street and these institutions. What does he say to the FBI investigation and does he believe that there should be more monitoring and more oversight when it comes to the corruption that has taken place, that has led us to where we are? It's been a big part of it.
ROTH: Well, should there be more regulation? What do you think of the FBI probes, the idea that as the daily news headlines said, Congress to Wall Street, the party is over. What do you think about more regulation?
GARON: More regulation is a given. You know, I think that should be put into effect yesterday. But I think that the bill should get done before we start putting people in jail.
ROTH: Isn't Wall Street still very worried? Let's say this bill passes. People are worried that the next morning, some other bank is going to go out.
GARON: Well, that's you know to be seen, right now luckily there's mergers and there are not bankruptcies. So I think that's better said than not.
ROTH: Thank you, Craig.
GARON: Thank you very much.
ROTH: Kyra, you know, many traders obviously are inside. No one is leaving their desks right now. Very tense atmosphere down here, except for the tourists. There seem to be thousands of them. A lot of them sense they're watching an historic day but we've been saying that for two weeks now. Back to you.
PHILLIPS: Historic indeed, great job, Richard Roth there on Wall Street. Appreciate it so much.
Ali Velshi, Susan Lisovicz, you're there on Wall Street. It's interesting. Even from the very beginning we have definitely seen the blame game. Those that want to blame consumer spending, those that want to blame financial institutions, those that want to blame Wall Street, high-powered CEOs, the president of the United States. Everybody is pointing the finger at everybody. Bottom line is we don't have a bailout plan. And really no one knows what's going to happen next.
SUSAN LISOVICZ, CNN CORRESPONDENT: Right. And, of course, you know, that's what's really gnawing on Wall Street in terms of this nasty sell-off which looked like it could become a historic sell off for a few moments there. Kyra, when you have a -- when you have a problem this big, there is a lot of blame to go around. Greed and risk are an essential part of the marketplace. It just happens.
When it reaches these levels, yes, it wasn't only these financial institutions. You know, there's a reason why Fannie Mae and Freddie Mac got as big as they did. And there were a lot of people who enjoyed cheap money for a long time. And not only bought houses, that in some cases they couldn't afford, but also took vacations, got a second car and so on. What we're seeing is to use an expression I heard a lot last week, the legislative process isn't pretty.
Well, the unwinding of all of this excess is not pretty either. And this is really excessive. And now Congress is trying to tackle this. Congress, which does not act quickly, which typically wants to take its time, understandably for such a complex problem, is now being pushed to do something very quickly. Well, unfortunately in the marketplace, things happen in the real time. Things happen very quickly. And on this day when Congress is trying to tackle this with the vote, we had one of the nation's largest banks sold for cheap to Citigroup, which had its own problems.
We had three big financial institutions in Europe that were propped up by governments there. That is the world we live in. And by the way, oil is down $7.50. That's no coincidence either. The global economy is slowing down. No one expects that this package is going to be when and if it is passed, that it suddenly is going to solve the economic woes in this country. But if credit starts to flow, it will not exacerbate it greatly. That is the hope, and that's why investors are so really unhinged.
PHILLIPS: Sure. And Ali Velshi, Susan Lisovicz just talking about the money there on Wall Street. You know, from golden parachutes, to the high-paid CEOs that stay in the job. I mean, really -- when you watch Congress right now, having to vote, I should probably bring in Ed Henry on this as well. I mean, these are the same members of Congress that get a lot of donations and get a lot of financial support from these high-paid companies and institutions.
VELSHI: And didn't do anything about it.
PHILLIPS: They did nothing and now they're being told to do something about it.
VELSHI: And this is a really bad week. And like that trader said, this is a really bad week to be putting all of your principles in front of you right now because the market doesn't work on principles. The problem here, Kyra, is that I fully understand why some people don't like this. I have been sort of saying to people, you have to close your nose and swallow it. Like we keep talking about Wall Street, 50 percent of Americans have their retirement investments in mutual funds, which are stocks. Which is Wall Street, which is your IRA, which is your 401(k), which is your bank, your CD and your money markets.
If we really want to kick Wall Street hard right now, just think very carefully about this because you are kicking yourself. There's -- the division between Wall Street and you doesn't exist anymore. It existed 15 years ago. Today, that is your retirement. That is your nest egg. You can change it, you can change the way it operates. There are rules that are broken. That trader told you, there are regulations that need to be fixed. Everybody agrees on this right now. I think that should be the very next thing Congress gets to. But if they are trying to send a message, if Congress is trying to send a message to their constituents that I stood up for you by kicking Wall Street, that kick comes right back and hits you in the eye.
PHILLIPS: Well, I think we're all getting kicked right now and somebody needs to be kicked. Because it's not a win-win situation.
VELSHI: No, it's not.
PHILLIPS: Jessica Yellin, you were there on the floor. We were a little bit confused about if, indeed, the voting was over. All votes were in. If the negotiation process had stopped. I think we have weeded through that. What exactly happened? It sort of came to an abrupt ending there and now we're hearing, OK, we've got to start over and figure out what is next. New plan to be put on the table.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, after the vote went to zero, the time zeroed out, you saw an unusual sight. Nancy Pelosi, Rahm Emanuel, leaders on the Democratic side, walking over to talk to John Boehner, the leader on the Republican side and to combat and figure out where to go from here. Now we know that Republicans have gone and there is a leadership meeting happening on the Republican side. Roy Blunt, the whip there, who is negotiating this for the Republicans, when asked if he was surprised this went down, he actually said not totally.
John Boehner, the House Minority Leader for the Republicans, says that he is disappointed for what this means for the country. They are trying to work on this. The Democrats, I can tell you what I understand is next. They are trying to bring this to another vote ideally. They're not letting Jewish members go home. You know it's on the eve of the Jewish holiday, Asking everybody to stay put and see if they could have another vote.
But it's very important to the Democrats that they get more Republicans to say yes before they arm-twist Democrats to change their votes. There's a strong feeling among the Democrats that they delivered their votes. Obviously they had many more yeas. And it's now the Republicans turn to deliver.
So they're working on seeing what the Republicans can bring in and the last resort in all of this would be to let everything break for the holiday and renegotiate while everybody waits and sees what happens to the markets. So there's enormous uncertainty right now, but an emphasis on their belief that this is not over. There could be another revote. Arm-twisting on all sides. But the Democrats really saying it's the Republicans time to deliver -- Kyra.
PHILLIPS: And now, trying to put together the numbers and I'm getting a number of e-mails, too, across here as you are talking. So let me back track just a minute here, Jessica. Stay with me. If you're just tuning in, we are getting word now coming that President Bush saying that he's very disappointed that the House of Representatives defeated a plan to bail out the banking industry. This is coming from his spokesperson, Tony Fratto. He came forward. Apparently Bush will be meeting with his advisers and also will be calling congressional leaders this afternoon.
So, Jessica Yellin, that adds to what you and both Ed Henry were saying. I asked Ed, are cell phones allowed there on the floor? And does the president actually, you know, try and call and add his influence in something like this? But I guess there's a room off to the side where they will go off and the president will make those calls. You were saying you've never seen anything this big or this type of negotiation going on since the vote with regard to the war in Iraq.
YELLIN: Well, what we hear from members is they feel like this is what one person called a legacy vote. That there were several momentous votes in their entire career and this is one of them. So much money on the line is one reason. The other reason, because there's just so much uncertainty around exactly whether this will be the rescue that's needed and because it's so much against what their constituents want. They feel like they're doing what's right for the country voting yea, but their constituents in many district want a nay vote. So it's gut-check time, they say.
PHILLIPS: It's definitely gut-check time. All right. Jessica Yellin there, reporting to us. She came right off the floor just to bring you all up to date. If you're just tuning in, the latest news is that that massive legislation to bail out the U.S. economy, the stressed financial industry that we have been talking about for weeks and weeks, right now that had been hanging near defeat there on the floor has not passed. But as you heard Jessica Yellin, you never know what can happen from this point on. That there will be a lot of back and forth going on, some more negotiating. Possibly see a new bailout plan presented.
The voting will start again. But not good news coming to the president as he has come forward now saying he is very disappointed that the House of Representatives defeated this plan to bail out the banking industry. His spokesperson speaking for him just minutes ago. Apparently he is going to call a meeting with his advisers and be calling on congressional leaders this afternoon. Who knows if he was doing that while they were voting right now. But that is taking place at this moment. Trying to figure out what is next for the U.S. economy. What does it mean for you and me as investors, as individuals trying to get housing loans right now?
I mean, the plan was that this bailout would be disbursed in various stages and it would put curbs on compensation for executives. They would have an oversight board that would be created to monitor the financial system. It allowed the treasury the option of getting ownership stakes. Then it talked about how it would benefit banks, credit unions, pensions, taxpayers, homeowners. Now the vote coming through that this just may not be enough.
We want to get straight to our congressional producer there Deirdre Walsh that was on the floor. I think Deidre you were on the floor. Is that correct?
DEIRDRE WALSH, CNN CONGRESSIONAL PRODUCER: Kyra, I was inside the chamber when the vote was taking place along with scores of other Capitol Hill reporters. Reporters were poised, craning over the ledge, looking at members on the floor, seeing members of the leadership shuttling back and forth.
You could see the Democratic leaders at the end of the vote going over to talk to minority Leader Boehner. Pelosi was seen shaking her head. Members just stood silent as the gavel came down. It was an unbelievably extraordinary moment on Capitol Hill. Something I've never seen since I've worked up here, Kyra. After the vote went down, the House Republicans went into Boehner's offense, into the Republican leader's office. The deputy whip, the vote counter on the Republican side Eric Cantor told reporters, I'm just trying to be constructive.
The Democrats went into Speaker Pelosi's office. Barney Frank, who has been leading the negotiations for the Democrats, told reporters it's up to the Republicans. Democrats voted overwhelmingly for this bill. He told reporters, Republicans voted overwhelming against it. He just said in the meeting -- they're going into a meeting and they're trying to figure out what happens next.
PHILLIPS: Do you have any idea, Deirdre, what the sticking points were? Because if you look at parts of the plan, for example, what is in it for homeowners about expanding help against foreclosures, facilitating changes to home loans, all of those type of things sound good and sound positive for what we're all struggling with right now here in the U.S. But obviously, this was not enough.
Do you know what some of the sticking points were?
WALSH: Well, I think we have to focus on the Republican side because that's where the -- the overwhelming vote against this package was. And we heard for days, Kyra, since this package was introduced, that Republicans just could not swallow a $700 billion government bailout. A lot of members felt like the package was improved greatly by their leadership, but there were still a lot that were holding out, saying it just wasn't enough.
And a lot of these members were telling us that they were hearing a lot from their constituents that just don't like this. And these members are going home very shortly to face the voters. And a lot of them are worried about how this is going to shake out in the voter's mind.
PHILLIPS: Deirdre Walsh, our congressional producer there on the Hill.
Deirdre, thank you so much.
Ed Henry in our D.C. bureau right now.
Have we gotten any reaction from the McCain camp or the Obama camp?
HENRY: We have gotten it from the McCain camp. I just also got off the phone with an Obama aide. And they're going to try to get us a statement shortly.
I think you've got --
PHILLIPS: Yes, we got the Republicans.
(CROSSTALK)
HENRY: Let's listen.
PHILLIPS: All right. Watch it for us, Ed.
(JOINED IN PROGRESS)
REP. ADAM PUTNAM (R), CONFERENCE CHAIRMAN: ... This bill was unable to muster the necessary votes to pass. We remain committed to working on a bipartisan basis to bring a bill to the floor that will garner the necessary votes to avoid a financial collapse. I was disappointed that a process that over the last several days has yielded a bipartisan product, involved negotiators from both sides of the building and both sides of the aisle, took a very marked partisan turn at the end of the debate, which was very different than the rhetoric that we heard out of Chairman Frank or Leader Hoyer, or our leader, John Boehner.
And with that, I'd like to introduce our leader, who has been at the -- from the earliest stages of this -- committed to working with both sides of the aisle to produce a product that is good for America, John Boehner.
REP. JOHN BOEHNER (R), MINORITY LEADER: Americans are angry, and so are my colleagues. They don't want to have to vote for a bill like this. And I understand that. But I have concerns about what this means for the American people, what it means for our economy and what it means for peoples' jobs. I think that we need to renew our efforts to find a solution that Congress can support.
I do believe that we could have gotten there today, had it not been for this partisan speech that the speaker gave on the floor of the House. I mean, we were -- we were -- we put everything we had into getting the votes to get there today. But the speaker had to give a partisan voice that poisoned our conference, caused a number of members that we thought we could get to go south.
And again today this was not about Democrats or Republicans. It's about our economy and what's best for the American people. And regardless of what happened today, we've got -- we have no choice, in my view, but to work together to try to find a solution to make sure that we save our economy and we save our constituents.
Roy Blunt --
REP. ROY BLUNT (R), MINORITY WHIP: Well thank you, John.
We did think we had a dozen more votes going to the floor than we had. No more than that, but we thought we had a dozen more. I think unfortunately, too many of our members were already on the floor when they heard that late speech by the speaker.
During this whole process, the tone in the room was so much better than the tone outside the room. We worked together well to try to come up with a compromise that could pass today, that the president could sign, that did what needs to be done in the economy. But every time you'd turn on television or read an article about the press reports of what the other side was saying, it was all about how Republicans either were unpatriotic or were there too late or whatever. Well, we're going to reach back out to them. We're certainly going to reach back out to our members. We're going to try to do our best to find a solution here that works for the American people. No matter how many times I said, Mr. Boehner said or Mr. Hoyer said or Mr. Frank said, we've got to put partisanship aside, there was way too much of that still going on, and a clock that nobody could control. You know, clearly needing to respect the holidays of this week, the Jewish holidays of this week, meant that we had to rush things in a way that made that job very hard and we made it harder today by so much partisan discussion in what should have been a bipartisan effort to solve this problem for the American people.
But we're going to reach back out to them. We're going to be talking to our members and see how we can come together in the next few days to reverse whatever negative impact there may be in the economy over the next few days because Congress has failed to act. And, remember, we're not in the majority in the Congress that failed to act today. And we need to reach back out to that majority and hopefully they'll allow us to be part of a solution rather than continuing to pursue a partisan discussion -- Eric.
REP. ERIC CANTOR (R), DEPUTY MINORITY WHIP: Right here is the reason I believe why this vote failed. And this is Speaker Pelosi's speech that frankly struck the tone of partisanship that, frankly, was inappropriate in this discussion. There is -- there is -- and there were several meetings day in and day out of members on both sides of the aisle trying to get up to speed on this issue of the economy and of the capital markets. And frankly, a lot of agreement. And I think that this is a case of the failure of Speaker Pelosi to listen not only to her members, but certainly to our members, and the common bonds that brought our members together on this very, very important issue facing the American people.
This is not a partisan crisis. This is an economic crisis facing everyone in this country. And to look at the votes today, 94 Democrats voted no -- 94. Now, when we were in the majority, I think we would make a decision that we would be able to come to the floor and bring a solution to the American people and pass it. They made a decision to leave 94 of their votes off the table. And, frankly, as you can see, a majority of our votes that wouldn't go along.
Clearly this is an instance where you see Speaker Pelosi's failure to listen, failure to lead. This caps off a year that I think has been probably the most unproductive year in the U.S. Congress that I've seen in my lifetime. No production of any bailout bill. No energy bill. No appropriations process. Very little to show the American people.
So we're going to go and as our leaders have said, go back to the drawing table and look to see where we can come together, listen to our members, and produce a solution for the American people.
QUESTION: (INAUDIBLE) ... the proposal that sort of disrupted the talks for a couple of --
BOEHNER: Absolutely not. As a matter of fact, I would argue that I had not stood in the way of the original Paulson plan. There have been far less votes on both sides of the aisle. And the fact is is that while we were able to move the bill drastically to the right, it wasn't -- it wasn't good enough for a lot of our members. And so we have got to find a true middle ground that will bring enough votes in order to avert any crisis.
QUESTION: Mr. Cantor, you describes what the speaker said was very partisan here and then you said here a minute ago she had a failure to listen and failure to lead. Isn't that partisanship on your behalf?
CANTOR: No, I think it's just pretty apparent now when she lost 93 of her colleagues on their side of the aisle, as well as all the people's votes who went no on our side of the aisle. Clearly there was something lacking in the leadership here that would bring a bill to the floor that couldn't meet the approval of that many number of members.
So we're saying, look, forget the partisan stuff. Let's look at the solutions. Let's look and see where members can come together and begin to provide a solution to this very, very tough economic challenge here.
(CROSSTALK)
QUESTION: (INAUDIBLE)
QUESTION: Does Mr. Paulson need to come back and restart negotiations again?
BOEHNER: I don't know that we know the path forward at this point. But it's clear that it's going to take members on both sides of the aisle to work together in order to resolve this. And so we need to -- we need everybody to calm down and relax and get back to work.
(CROSSTALK)
QUESTION: (INAUDIBLE) ... Republican votes?
BLUNT: Well we had more Republican votes going to the floor. I think some of them were reluctantly there anyway. It didn't take much to turn them off. And Republicans all -- almost all the Republicans here remember the responsibility that the majority had when we were in the majority and there was a lot of -- look, it's really their majority. They've got to bring a bill, a process to the floor in a timely way that works.
We had a very short time frame here after we finally were able to go to our members with the -- with the bill. But we'd like to find a way to deliver enough Republican votes to make this happen.
Now, most people in this process, over the last four days, have really reached out and tried to find a bipartisan solution. But a bipartisan solution is only as good as the last person that throws a bomb into the room. And so we've got to back away from that. I think the reality of the impact this can have on the markets will have a big impact in getting people back to wanting to work together and get this problem solved.
We're going to reach out to them. I hope they reach back out to us and find a solution that the Congress can come together on and get something done.
Thank you very much.
PHILLIPS: You've heard from the Republicans. You will soon hear from the Democrats. As you heard John Boehner come straight out, along with Roy Blunt, also Eric Cantor, blaming Nancy Pelosi, Speaker Nancy Pelosi -- quote, unquote -- "poisoning the decision that was made today."
If you're just tuning in, the House of Representatives rejecting that $700 billion plan to bailout the financial system here in the United States. Putting a massive road block now in front of the largest government intervention in the market since the Great Depression. Harsh words against House Speaker Nancy Pelosi, saying it was her speech that poisoned the decision here. There was a failure to listen they said, a failure to lead. And now, as John Boehner was pointing out, he sees this as a path they just don't know where it's going to lead to, where to go forward from this point.
He's asking everyone to calm down and relax and go back to work. Not an easy time to calm down at this point, as Americans are wondering what's going to happen to their homes, to their money, to their jobs as the House cannot come to a decision with regard to this bailout plan.
At this time we want to get to Kathleen Koch now. She's at the White House.
We did see come across the wires the president of the United States, his spokesperson, Tony Fratto, saying Bush was very disappointed that nothing passed in the House today. She's there now with Tony live on the White House Lawn -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Yes, precisely. Obviously, Kyra, this is something that the -- the Bush administration handed to Congress over a week ago. And they knew that Congress was going to, as the president described, improve on it. But let's talk right now to Deputy Press Secretary, Tony Fratto, about just what happened.
What is your reaction to losing this very important vote?
TONY FRATTO, WHITE HOUSE DEPUTY PRESS SECRETARY: Obviously it's a disappointment. We thought there would be enough support for this legislation on the Hill. We're very concerned about the markets. Remember that the crisis that we were facing, that we were trying to fix, still remains. So the president will be meeting with his team and we're going to try to determine the next steps in this.
KOCH: And what might those next steps be? FRATTO: We'll have to see. He'll get advice from Secretary Paulson. We'll want to hear the views of Chairman Bernanke and other economic officials. We'll also want to be in touch with congressional leaders and get their views as well.
KOCH: Tony, do you believe that you can salvage this plan? Is there any way to go back, take another crack at it? Add something to it, subtract something from it?
FRATTO: We think that the mechanisms in this plan were the best to deal with the crisis that we're facing. So the core of this plan that was outlined, we think, will solve the problem. It was big enough, substantial enough, and it hit the target for what we were trying to do in terms of the credit markets and our economy. So the core of this plan, we believe, really needs to get done to give the Treasury secretary the tools that he needs to prevent our economy from slipping.
KOCH: A lot of people are talking right now about who dropped the ball. House Republicans just pointed to Nancy Pelosi. They blamed her for poisoning the environment. They said she had exhibited a failure to lead.
What mistakes did the White House make?
FRATTO: Look, I think there's -- what we're dealing with here was a very difficult situation. We tried to convince enough members that the meeting was critical, needed to get done. We talked to a lot of members, the president, the vice president, and others did. But it's a complicated bill. We want to make sure that people understand the crisis because it does need to be fixed.
KOCH: You said in a briefing today that part of the problem was we in the media described this as a Wall Street bailout. You say it's not that.
FRATTO: Well I don't think there's any question that the labelling this of a -- as a bailout for Wall Street executives makes it difficult for people to support it. There's no question about that. I think that's apparent to everyone.
But that's not what this is. This is to deal with a systemic problem that cuts across our financial system and affects every American. So to leave Americans with the impression that their tax dollars were going to pay off or -- Wall Street executives probably wasn't fair, didn't -- made the challenge that much steeper for, certainly, members to vote for it and the challenges that we had in communicating it.
We're going to continue to communicate on what the facts are here. And the facts are is that America's credit system, its method of delivering money to individuals, consumers, businesses who need it, is broken and it will be broken until we take the steps to fix it.
KOCH: Tony, soon after this vote failed, the stock market plunged some 700 points. At last check I believe it was down some 535. Do you think that is going to help you in persuading members of Congress that something needs to be done?
FRATTO: We never, you know, wished to see a decline in the markets. It's not something that we would want to see now. I don't know if people should use it as a scorecard.
There is a -- the problem that we've been talking about is in our credit markets. And Americans are feeling it already. We talked to small businesses across the country. They're having trouble getting credit. There have been some companies that have had trouble getting overnight loans to be able to make their payrolls and ship to their goods. That's a problem.
If we don't have that kind of efficient credit delivery system in this country, our economy grinds to a halt. That's something that nobody wants to see.
KOCH: What do you say to members of Congress, and just in conclusion, who said, you know, part of the problem was this administration has cried wolf once too often. They pointed to the president saying there were definitely WMD in Iraq, we're in a crisis after 9/11, you have to pass the Patriot Act. And a lot of lawmakers really regret the votes that they cast.
FRATTO: Kathleen, we have a problem here. I know lots of people want to talk about the past. We're talking about an actual crisis here. It's not just the administration saying it, you're seeing it in the markets.
KOCH: Tony Fratto, thank you so much.
Deputy Press Secretary, Tony Fratto, obviously making it clear there's a lot of work that lies ahead and everyone is going to be putting their heads together to try to come up with the way forward, Kyra.
PHILLIPS: We're all trying to put our heads around it.
Kathleen Koch there, live from the White House. Appreciate it so much.
KOCH: You bet.
PHILLIPS: Tony Fratto, thank you so much.
Let's get to Ed Henry, back to you in the D.C. bureau.
Just real quickly, Ed, are you getting any response from McCain camp or Obama camp?
HENRY: Yes.
PHILLIPS: And also, too -- just listening to what Tony Fratto had to say, and hearing the Republicans come before the cameras there, the GOP is saying this is not a partisan issue, yet they're blaming Nancy Pelosi for the failure that happened today.
I mean, are they trying to have it -- or is it trying to have it both ways?
HENRY: Well I think there are going to be some very tough questions for the Republican leadership. You're absolutely right. I mean, No. 1, when you look at it when they're pointing the finger at Nancy Pelosi for not delivering enough votes, she delivered, as I look at the sheet here, 140 Democratic votes. Clearly her aides are pointing out about 66 percent of her caucus, whereas John Boehner only produced 65 Republican votes, around 30 percent of his caucus, and he had 133 no Republican votes.
As you and I have been talking for the last hour or so, those 133 House Republicans voting against it, that's what killed the bill, not Democrats voting against it.
And secondly, they're mentioning this Pelosi speech. I'm still, myself, as you were talking and had Tony Fratto on, I'm looking at -- on this laptop what Nancy Pelosi said. And I'm not finding the partisan thing that they say sort of inflamed Republican members. At one point she said -- quote -- "We have worked in a bipartisan way. I acknowledge Mr. Blunt and Mr. Boehner on trying to find common ground. But we insisted the taxpayer be covered."
She was talking about how the Democrats pushed for one specific provision, but was clearly there also saying that the Republicans were finding common ground. So I'm not sure -- we've got to fact-check exactly what the Republicans are saying about whether Pelosi's speech was really that partisan.
Finally, I will point out, we are about to hear from Barack Obama. So he's going to get some equal times in terms of -- he's going to speak out in Denver. Suzanne Malveaux is there. We're going to hear what he -- his reaction to this vote is.
But let me tell you what Senator McCain's aides are saying. I just spoke to one of his campaign aides who is charging that this was -- quote -- failed leadership by Barack Obama that did not get the job done. The McCain camp is obviously trying to say that last week the Republican caucus -- it was reported widely that there were only four House Republicans onboard with this bill. And then they are pointing out that John McCain suspended his campaign, he came back to Washington, he was working on it. And they're claiming that he was able to get up to 65 House Republicans instead of just four. And that he had a lot of movement, but Democrats didn't provide enough movement.
And the operative quote from the McCain aide is -- quote -- "it failed because Barack Obama phoned it in." Now, that's a repeat of what we heard from John McCain a little earlier this morning in Columbus, Ohio, before this vote. John McCain said just that, essentially that Democrats had phoned it in, but I showed leadership. So this is very important to point out, that the McCain camp moving forward is going to try to run away from the fact that this lost with so many Republican no votes and say, look, we tried all we could. Barack Obama didn't work hard enough.
I spoke briefly to an Obama aide who said that's nonsense. This wasn't about John McCain and Barack Obama. The Republicans couldn't deliver the votes. We'll hear from Barack Obama himself in a few moments. But the bottom line is, this is having reverberations on Wall Street, at the White House, Capitol Hill, and also obviously on the campaign trail -- Kyra.
PHILLIPS: That is true.
Ed Henry, thank you so much.
Stocks plummeted on Wall Street even before that vote was announced on that bill off the House floor. Susan Lisovicz joining us live once again. The Dow Industrials down 559 points. It keeps bumping up and down.
What do you think, Susan?
LISOVICZ: Well you know, Kyra, we were speaking an hour and a half ago, and a 225-point decline seemed unfortunately all too normal in these turbulent times. But then the next time I looked at the board, it was down 500 points. And I knew something was happening. I saw a lot of traders gathered around television monitors. They were watching the vote. Something they thought was going to pass, didn't pass on the last go-around.
I'll let Teddy Weisberg, a broker who has been on the floor here for 40 years, explain why there was so much concern about this bill not passing. I apologize, I have a small mic. We just simply forgot when we ran up to the 12th floor.
TED WEISBERG, PRES. SEA PORT SECURITIES: Well, it's a small mike and a big topic.
LISOVICZ: Yes.
WEISBERG: You know, I think the Perception -- Wall Street, first of all, no matter what, has trouble dealing with the unknown. And it was the perception that this bill was going to pass.
I mean, we kind of got that message all weekend. They were going into the vote. I think the fact that it didn't pass clearly came as a disappointment. Now, you know, we sold off really hard. We're still down over 500. You know, it's -- I'm sure it's going to pass. Obviously they've got to go back to the drawing board. I don't know what didn't work or what did work. But clearly they're going to have to do it again. And they got kind of close, so maybe they'll get it the next try. But, meanwhile, we need that bill.
LISOVICZ: Will you explain -- you talked quite passionately about why this is something that is of importance to everyone.
WEISBERG: Well, yes. I think it's in -- you know, I think it's in everybody's best interest that this bill passes. We have the largest financial markets in the world. They need to be liquid. People need to have confidence in them. What the Treasury has proposed will go a long way to bringing clarity and confidence back to our markets. The problem is, if we don't do this, it's like dropping a stone in a -- in the pool. And you get the ripples that go out. These ripples that go out. And in terms of the U.S. economy, these ripples will reach everywhere absent this bill being passed. We need --
LISOVICZ: Can you give us examples of what could happen? What is happening?
WEISBERG: Well, I think the simplest -- the simplest example is that we need to free up the financial system. We have to get the banks lending again. We have to get some momentum back in our financial system.
So if you live in middle America and you run a small business and you need to go to the bank to borrow some money, if the bank doesn't have the money to lend you or is nervous about lending you the money because everybody's kind of developing this bunker mentality, everything sort of freezes up. You know, it affects you. You cannot borrow the money.
You can't get the money to make your payroll. If you want to buy a car, get a car loan from your local bank, you know, it's possible they're not going to have the money to do that. It affects everybody. What happens in our financial system, like it or not, affects all of us in one way or another.
Whether it's in your homes, it's in your automobiles, it's in the businesses that you run. So, this bill as it's been proposed, and there are a lot of details in there that a lot of us don't understand, probably is certainly not perfect at best. But it is a major step in the right direction.
PHILLIPS: And Susan --
WEISBERG: And it is very disappointing and unfortunate that for whatever reasons it didn't pass. Hopefully it will pass on the next try.
LISOVICZ: Teddy Weisberg -- Kyra.
PHILLIPS: I love it. He's always got plenty to say. That's for sure, Susan. He's one of our favorite traders there on the floor. Thank you so much.
But we've got to get to Jessica Yellin real quickly, there on Cap Hill. She was in the chamber watching the vote go down.
Jessica, you're getting word on what will happen next.
YELLIN: Well, I spoke to Minority Leader John Boehner, after he left that press conference. And he said that his members have already started leaving town.
We've got, I guess, just about a few hours now until sundown. So they've started leaving town for the Jewish holiday and there will not be another vote today. What I'm hearing is that they are going to go -- the Republican leaders -- and let everyone cool down, think about how they can reconsider all of this, what comes next. I'm hearing from different aides on both sides of the aisle that the thought is, they'd like to see if it's possible to work on votes over the next few days and have a revote on the House side possibly on Thursday, when the House is back in session. And see if it's possible to have a revote on the exact same bill.
But they're going to have to work that out over the next few days. Perhaps they'll need to make some adjustments to the bill to allow people to change their votes. Kyra, that's the substantive part of what's going on. And on the other end, on the politics side, there is an enormous amount of fury on the Hill right now.
Republicans, you heard it in that press conference, pointing fingers at Nancy Pelosi. Democrats actually shocked and saying that -- let me read you one of the e-mails I just got from a leadership aide saying, "This type -- from a Democrat -- of putting party first attitude is exactly why the Republicans lost control of the Congress."
Another top Democrat saying that he's quote, "Angry as hell at the nonsense from the Republicans and that this is really all about an internal leadership fight on the Republican side." The two sides really are not seeing eye-to-eye at the moment -- Kyra.
PHILLIPS: Well, and we've heard from Republicans up at the mics. And apparently Jessica, we're getting ready to hear from Democrats. We are going to take that live as soon as it happens. We've actually got a live picture up right now, monitoring the room where Nancy Pelosi, more than likely will step up to the mics with her Democratic counterparts.
So Jessica, I mean, so much at stake here. I got to say when we were talking our meeting in this morning, only a couple of people said, it's possible that this won't pass today. And everybody thought, oh, no, it's going to pass. We've got to this point. It has to pass. Something has to happen. The election's only a couple of weeks away.
So, did this surprise you? Did this surprise other members of the media? Did this even surprise leaders there on the floor, as you were observing in the chamber? Or did you sort of expect that this was going to happen?
YELLIN: As the vote approached, it seemed increasingly uncertain whether it would pass. So there was -- that's why you saw everybody staring at the board, even the members themselves, the leadership, wondering.
What's unusual about that, is they usually do something called whipping the vote, in advance. They go around and make sure they know who's voting yes and who's voting no. And you heard representative Blunt on the Republican side say, his side came up 12 votes shorter than even they expected. So, it was a letdown from what they expected. And the Democrats were expecting even a higher number from the Republicans. So I'd say that there was enormous surprise that it failed by the amount it did. And also surprise that that it -- they actually thought that in the end, when people -- when push came to shove, even those who didn't want to vote yes, would. So, yes. There's a lot of surprise up here right now.
PHILLIPS: Jessica Yellin, there just coming out of the chambers there. Watching the vote go down. Following all the drama for us.
Thank you so much, Jessica.
If you're just tuning in, the House of Representatives rejecting that $700 billion plan to bail out the financial system here in the United States. Being compared to a road block the size of something that we haven't seen since the Great Depression.
Live picture of the Capitol right now.
Rick Sanchez, you're getting ready to talk about this for the next hour. Of course, that will lead to "THE SITUATION ROOM" with Wolf Blitzer. The Dow Industrials down 568 points. We saw it rock Wall Street, rock the White House. Now it's rocking all of us and our money and our news coverage.
RICK SANCHEZ, CNN ANCHOR: Is this our government that we're arguing about? Is this the economy of the United States or a happy meal argument? It seems remarkable to me, and I think it does to most Americans who are watching this play out, that past the 11th hour they're now arguing about who caused it and whether you hurt my feelings because of what you said or, no, it was you who was being partisan. No, it was you who was being partisan.
Am I crazy or is this the United States of America and these are the people we elected to run this government?
PHILLIPS: Bottom line, it's affecting you, me, every other taxpayer and someone has to make a decision and move forward. It's going to be interesting to see if they even come to a decision. This may be in the hands of the next president of the United States. And that means either John McCain or Barack Obama.
Meanwhile, we have to try to sift through this and figure out we'll make it in the next couple of days with regard to a decision. Right now it's going back to the drawing board, Rick.
SANCHEZ: Well, and it does appear there will some kind of conversation. Now, what's important is, it's now turned into a political conversation that involves a whole lot of Machiavellian play.
In other words, a lot of bickering and finger-pointing. We understand that Nancy Pelosi will be coming out any minute now to talk to us. And I guess, now we have to sit through her take on what the Republicans' take was about her being the reason that they really voted against this.
When you really look at that, you do have to ask yourself the following question in terms of the Republicans' assertion, right? Is it really Nancy Pelosi who caused you to vote against this? And if that's the case, then how committed were you to it?
PHILLIPS: Why don't we go back to the beginning. Where was the SEC with regard to monitoring the financial institutions? Now the FBI is involved in investigating corruption. These are members of Congress that received money in donations in support for their campaigns from the same people that are being blamed for being corrupt on the financial streets.
SANCHEZ: To the tune of $600 million, by the way.
PHILLIPS: And he we are, talking about $700 billion to bail everybody out.
SANCHEZ: It's amazing to watch how -- no. And, listen, I do this social networking thing and I'm on MySpace and Facebook and twitter.
And the consensus in the response that I'm getting is, throw the bums out. We are now more convinced than ever before that there's a true disconnect, not just between obviously the Bush administration and the American people right now, and we've gone through that.
Given the things that have happened in the past. But now, more than just the Bush administration, a disconnect between the American people and their representatives. It's what the polls show. And I think it's what we're seeing, perhaps, as much today as ever. These guys and these women were asked to step up and make a prudent decision and it doesn't appear that they've been able to do so.
PHILLIPS: All Americans want to do is be able to fill up their car with gas. Go to work, to a job that they can keep. Be able to save a little money so they can send their kids to go to college, and just be able to move along in a society where we pay taxes.
