Bush signs $700 billion bailout bill
WASHINGTON (AP) — 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.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) — President Bush said Friday he would quickly sign into law a far-reaching $700 billion bill to bailout the nation's tottering financial industry and thanked Congress for acting in a bipartisan and decisive fashion.
"There were moments this week when some thought that the federal government could not rise to the challenge. But thanks to the hard work of members of both parties, in both houses, and the spirit of cooperation between Capitol Hill and my administration, we completed this bill in a timely manner," Bush said in remarks in the Rose Garden.
He spoke shortly after the far-reaching measure was passed by the House 263 to 171. That represented the final stage of the legislative process.
"I know some Americans have concerns about this legislation, especially about the government's role and the bill's cost," Bush said. "As a strong supporter of free enterprise, I believe government intervention should occur only when necessary. In this situation, action is clearly necessary."
"By coming together on this legislation, we have acted boldly to help prevent the crisis on Wall Street from becoming ... a crisis in communities across our country," Bush said. "We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy."
The measure, which passed the Senate on Wednesday, authorizes the Treasury Department to buy bad mortgages and other troubled securities associated with them from banks and other financial institutions.
That should allow credit, which has slowed to a trickle, to flow more freely.
"Ultimately, the cost to taxpayers will be far less than the initial outlay," Bush said.
After his remarks, Bush walked the short distance to the Treasury Department next door where he was greeted by Treasury Secretary Henry Paulson, who helped steer the complicated legislation through Congress and who will oversee the program for the remainder of the Bush administration.
They shook hands and walked together into the building. Paulson, asked by a reporter how he was feeling, responded, "Better."
An earlier version of the rescue plan was rejected in the House on Monday, sending stock markets plunging around the world and raising fears that the U.S. was headed for the worst economic crisis since the 1930s.
But the bill was sweetened with tax cuts and an increase in the government insurance on deposits and savings accounts, to $250,000 as leaders of both parties stepped up their efforts to corral support.
"A major problem in our financial system is that banks have restricted the flow of credit to businesses and consumers. Many of the assets these banks are holding have lost value," Bush said.
He said the legislation now headed for his signature "addresses this problem head-on by providing a variety of new tools to the government, such as allowing us to purchase some of the troubled assets and creating a new government insurance program that will guarantee the value of others."
"Taken together, these steps represent decisive action to ease the credit crunch that is now threatening our economy," he added.
He said that if the plan works as intended, once housing prices stabilize, the government will be able to resell the troubled assets it had purchased — possibly at a profit. "And over time, Americans should expect that much, if not all, of the tax dollars we invest will be paid back," he said.
He cautioned that "it will take some time for this legislation to have its full impact on our economy."
In the last major government intervention in financial markets, the government in the late 1980s took over assets of more than a thousand savings and loan associations that had gone broke. That cleanup took six years.