In an unexpected move, the House has killed the bailout bill. Lawmakers on both sides are pointing fingers, and the narrow failure of 228 to 205 came as a shock to the stock market. As of this writing, the Dow is down more than 700 points, and the House is staying in session to desperately attempt to hammer out a new proposal.
So what's next? The Democrats have the majorities needed to pass a bill, but they won't. They do not want to pass a bill without Republican support, in case the bill fails to rescue the system. This is because when the political backfire comes, they do not want to shoulder the blame all by themselves.
What is going to happen, is for the first time since the Republicans lost control of congress, they have the opportunity to set the agenda. The Republicans have an alternate proposal-the only alternate proposal-to rescue the economy. Their proposal, is to insure the companies, and provide them loans, not a bailout.
Their theory is this will be able to protect the taxpayers, and will achieve the same result as the bailout. If the Democrats want a bi-partisan bill, then they have to go with the Republican alternative.
Republicans will deliver this alternative, and will most likely get the votes to pass it. Republicans will be able to get all the credit for the bill, and distance themselves from president Bush and his proposal all at the same time.
The financial crisis could be an opportunity for the Republicans to get back on the good side of the American voter. All they need to do is present their plan, and explain to the taxpayer why they as Republicans, have their best interest in mind.