Senate passes stimulus plan, Geithner plan bombs
The U.S. Senate passed President Barack Obama's $838 billion economic stimulus 61 to 37. Every Democrat voted for the bill, and they were joined by three Republicans. An ailing Sen. Ted Kennedy flew in from Florida, where he is convalescing, to cast his vote, according to MSNBC.
Business groups were enthusiastic about the Senate bill. "We are glad that it passed," said Laura Narvaiz, a spokeswoman for the National Association of Manufacturers, in an interview. She added that the Senate bill "was more balanced" than the House one.
Bruce Josten, executive vice president for Government Affairs at the U.S. Chamber of Commerce, said in a statement that the bill is "not perfect and should be improved in conference. . . . It offers a much-needed shot in the arm for employers trying to stay afloat, workers concerned about keeping their jobs, and those who have lost work because of the crumbling economy."
But there is a wide gap between the House and Senate plans, including tens of billions of dollars for aid to state and local governments, school construction money, and health and renewable energy programs. Though Democrats control both legislative bodies, Obama has said he wants the support of Republicans. He also needs the support of Wall Street, which may prove to be difficult given the frosty reception given to Geithner's bank bailout plan today.
The Treasury secretary's proposal may cost $2 trillion. Its aim is to unfreeze the credit markets through a public-private partnership to buy distressed securities. Investors lambasted the plan for lacking details, particularly how the public-private partnerships are supposed to work. Private equity investors have complained that existing rules make investing in distressed assets such as banks unattractive.
Markets plunged triple digits as investors wait for Obama to address their concerns.