By a vote of 263-171 the U.S. House passed the bailout package sent over by the Senate today, reversing course on their earlier rejection. Treasury Secretary Paulson issued a statement of support:
“The broad authorities in this legislation, when combined with existing regulatory authorities and resources, gives us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets,” Paulson said in a statement, in which he promised to “move rapidly to implement the new authorities.”
Speaker Pelosi had vowed not to bring this bill to the floor without sufficient votes. She won the vote but must now take some ownership of the results. Will post the delrgation votes shortly.
Bill Manzi.com 
Your Honor,
I enjoyed your comment,”She won the vote but must now take some ownership of the results. Will post the delrgation votes shortly”.
I would say after her hateful speech before the failed vote earlier, she should take more than “some” ownership. She will be cursed with the outcome of this very bad idea.
Jules
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Mr. Mayor,
How will this bill affect the City of Methuen? My understanding was that the State Treasury was going to be unable to make payments to cities and towns in Massachusetts because of the freeze in the credit markets. With the passage of this bill, will these payments now be possible? Further, will it eliminate the need for City departments to make further budget cuts? I apologize if this is a simplistic view of economics, but I was curious. Thank you.
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Matt,
The Treasurer did in fact make the last local aid payment on time. (Made last week) He did indeed have problems on the credit market, as he was seeking to borrow $400 million to make that payment. He was unable to borrow all of that and consequently used about $200 million of state cash. The City, as of today, has not implemented any budget cuts. We are carefully watching the situation and have concerns that a further deterioration of the state’s fiscal position may lead to local aid cuts in the middle of this fiscal cycle. That would lead to some pretty steep cuts across every department in Methuen. We hope that does not occur, but we must plan for the worst.
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5-10% cuts…that’s a lot of people with out jobs isnt it?
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Because of the fact that the cut would come mid-year it has the potential to be worse than 5 or 10 percent. If the cut is made against the original appropriation at 5 percent you must keep in mind that we are spending per our budgeted amount at the higher original rate already. That means that a 5% cut now would force us to make a cut substantially higher than that this year. A mid year cut is truly draconian, and I hope it does not happen.
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Thanks for your input. I appreciate the time you spend to answer these questions. Im no where near as educated on these issues as you, but seeing that this bill has just passed, I know it wont solve the problems in our economy, but how will it help or hurt Methuen?
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The major benefit (we hope) will be the unfreezing of the credit markets. That will mean two things immediately.
1) The State will be able to borrow in the short term credit markets to finance ongoing operations, including local aid.
2) Methuen’s ability to access short term finance, if necessary, will be there.
The larger picture for us is the same as everyone else. We do not want our major employers in the Merrimack Valley and the Commonwealth of Massachusetts to fail because of the constricted credit market. This truly does have the potential to be a row of dominos, and despite the fact that the bailout bill appears to reward bad behavior I think it was in Methuen’s interest that it was passed.
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So how many public safety employees are going to lose their jobs?
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I think that at the local level we are hoping that no departments, including public safety, will lose jobs. But that is contingent on no mid-year local aid cuts. At the state level the Governor will announce cuts on Wednesday, and layoffs will occur. We just do not know in what departments.
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