By Joyce Kryszak
http://stream.publicbroadcasting.net/production/mp3/wbfo/local-wbfo-767083.mp3
Buffalo, NY – Congress on Monday rejected the largest financial rescue plan in United States history. Supporters say they will continue to work toward a deal to head off the worst financial meltdown since the Great Depression. But not everyone thinks a bail out is a good idea.
The controversial $700 Billion bail out of Wall Street was defeated by a mere 23 votes. Congressional leaders said they are not sure why the deal fell apart. Some lawmakers, particularly Republicans, were never comfortable with the details of the package. But the bail out was increasingly unpopular with the public too. Democratic Congressman Brian Higgins voted for the bill. But Higgins said he understands why the public is not supportive.
"They see this, correctly, as greedy, reckless, irresponsible Wall Street and they are right, without question" said Higgins. "But the problem is that this situation is finding its way into the broader markets that effects everybody."
Republican Congressman Tom Reynolds agrees. He voted for the bill saying it was too risky not to. So did Congress woman Louise Slaughter. Both vowed to work toward a new deal. But Congressman Randy Kuhl voted no, calling the plan a band aid that would cause more harm than good. UB finance professor emeritus Lawrence Southwick agrees. He said a bail out poses a moral hazard where no risk would be seen as too great by investors, because taxpayers would always absorb the losses.
Even without a bail out, he said people who have earned good credit should still be able to get it. But in recent months a dozen banks already have failed. And Monday the stock market plunged nearly 800 points, hitting its lowest closing point drop in history.
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