The $700 billion bailout bill President George W. Bush signed Friday was pushed through the House and Senate with help from Pennsylvania congressmen, including Rep. John Peterson, whose district includes State College.
President Bush signed the bill shortly after it passed the U.S. House of Representatives Friday afternoon, 263-171.
Peterson, R-Pa., who supported the bill through both votes, wrote in a press release that though the legislation is imperfect and will not "solve the financial crisis overnight," it will put capital into the economy and grant consumers the chance for renewed confidence in the market.
"The option of doing nothing would cause citizens of the Fifth Congressional District to pay the heaviest price," Peterson wrote. "College students suffer, homeowners suffer, and hard working American's savings and retirement are in jeopardy."
Patrick Creighton, communications director for Peterson, said Peterson voted for the legislation, but the circumstances under which it was passed were unusual.
He said the issue should have been debated and vetted by the public, later adding, "It's not how legislation is supposed to be drafted."
An earlier version of the bill was voted down in the House 228-205 last Monday.
The initial bill Treasury Secretary Henry Paulson proposed was "inadequate and unacceptable," Creighton said.
Sens. Bob Casey, D-Pa., and Arlen Specter, R-Pa., also voted in favor of the legislation when the Senate passed the bill Wednesday, 74-25.
Paulson, in a meeting last month, moved leaders in Congress to act when he warned them the economy might collapse if the federal government did not intervene, according to The Associated Press.
After Friday's vote, he said aides were working on details and getting advisers from outside the government with the goal of unfreezing credit markets, the AP reported.
Jean Helwege, an associate professor in the finance department, said the legislation ideally would generate more lending.
Wall Street fell 157 points Friday in response to the legislation, the AP reported.
The market became nervous because Paulson and Federal Reserve Board Chairman Ben Bernanke said the $700 billion bill is needed, she said.
The legislation will help financial firms and "there is no downside for them," Helwege said.
Large notable firms could, however, come through on top at the expense of small banks, she said.
Lawmakers might have saved Americans from another Great Depression but at a cost to the financial system and capital market economy, Helwege said.
"That's not capitalism," she said.
