Bush approves US economic bailout
President Bush has approved the economic bailout bill
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Saturday, 04, Oct 2008 09:27
President Bush has signed the economic bailout bill just hours after it was passed by the US congress but warned the country's economy continues to face "serious challenges".
The controversial package has been created to buy up the Wall Street's bad debts in an effort to ease the credit crunch which is crippling the US economy.
But the president warned last night it would take "time and determined effort to get through this difficult period".
The US House of Representatives passed the bill by 263 votes to 171 on Friday.
It was the second vote in a week, following a surprise rejection of the bill on Monday.
However the House adopted the new version of the Emergency Economic Stabilization Act after the Senate added around $100 billion (£57 billion) in new tax breaks to win Republican votes.
A complex process of auctions to buy up what are seen as toxic assets will now be overseen by the US Treasury and is not expected to take place for at least a month.
Despite the adoption of the bill, share prices in New York ended down on Friday, as government figures showed US job losses at a five-year high.
Mr Bush welcomed the approval of the bill, which he said was "essential to helping America's economy weather the financial crisis".
The president acknowledged that there were concerns about the government's role in the deal and its cost.
But he said government intervention in the situation was “clearly necessary".
"Ultimately the cost to taxpayers will be far less than the initial outlay," he said.
Politician had been severlay divided over the bill fearing a backlash from furious voters in November's congressional elections.
Some who had voted "No" on Monday said they were switching because of improvements to the bill, but many of them still expressed serious reservations.
Others maintained their opposition, saying the bill was still a bail-out benefiting mainly Wall Street.
Both candidates for the US presidential election in November welcomed the deal but neither were enthusiastic about the details.
Democratic candidate Barack Obama said it was important that the Bush administration used the new powers granted by the deal wisely.
"We still have a health care system that's broken, we're still overly reliant on oil from the Middle East and so we've still got these structural problems," he said.
"The fundamentals of the economy aren't sound and we're going to have to do a lot of work moving forward."
Meanwhile Republican candidate John McCain said the deal "isn't perfect and it's an outrage that it is even necessary".
But he said the US had to stop damage to its economy caused by "corrupt and incompetent practices on Wall Street and in Washington".