US House of Representatives Rejects Bailout Bill

The US House of Representatives has rejected a 700 billion dollar emergency rescue package, ignoring urgent pleas from President George W. Bush and bipartisan Congressional leaders to quickly bail out the US financial industry.

More than two-thirds of Republicans and 40 percent of Democrats opposed the bill.

US president George W. Bush, who had called on the lawmakers to back the bill, says he is "very disappointed" by the House's rejection.He vows to "address this economic situation head on."

"I was disappointed in the vote with the United States Congress on the economic rescue plan. We put forth a plan that was big because we've got a big problem.Our strategy is to continue to address this economic situation head on and we'll be working to develop a strategy that will enable us to continue to move forward."

Congressmen Jeb Hensarling, a Texas Republican, and Brad Sherman, a California Democrat, explained why they would not vote for the bill.

"This is clearly a better bill, Madam Speaker, than it was a week ago. But that's not the relevant test; the relevant test is when you look at the good in the bill, when you look at the bad in the bill, does it take America in a direction that you believe America should go? By that test, Madam Speaker, I will vote no on this legislation."

"Just because this bill is unpopular doesn't mean we have to pass it immediately. Some 400 eminent economists, including three Nobel laureates are asking us to come back and do our job and write a good bill in the next week or so."

On Wall Street, fear swept across the trading floors after the government's financial bailout package failed to survive the House vote, sending the Dow Jones industrials down as much as 705 points.

Meanwhile, in the latest byproduct of the widening global financial crisis, Citigroup is to acquire the banking operations of Wachovia Corporation, the owner of the fourth largest banking chain in the US.

The Federal Deposit Insurance Corporation asserted that Wachovia had not failed and that all depositors were protected and that there would be no cost to the Deposit Insurance Fund.