OPINION: Bailout's Political Blame Game

The stock market, which opened Monday with hefty losses, reacted sharply to the failure of the Treasury's bailout bill in the House of Representatives. The Dow Jones Industrial Average, which was down some 300 points ahead of the vote, was sent reeling as news of the tally emerged. The Dow ended Monday down 777 points, its steepest one-day point loss in the history of the index.

With the bailout representing the only rescue plan on the table, its defeat could mean more bank failures, lost jobs and recession for the next president and Congress to face. The stakes couldn't be higher.

Amazingly, the bill lost by a razor-thin margin -- 228 against the bailout vs. 205 votes in favor of it. Its passage would have required just another 12 votes. Both the Democratic and Republican caucuses heaped blame on each other for the bill's defeat. But who really choked in terms of rallying support from their own party? It would appear the biggest losers were the leaders of the Democrats in the House: Speaker Nancy Pelosi (D., Calif.) and Steny Hoyer (D., Md.).

Pelosi and other Democrats, such as Rep. Barney Frank (D., Mass) and Sen. Chris Dodd (D., Conn.), played an important role in negotiating an agreement with the White House on the bailout bill. Democratic leadership owned this version of the bill.

Speaker Pelosi spoke on the floor of the House in favor of the bill in the hope of offering cover to her caucus:

"It is a number that is staggering, but tells us only the costs of the Bush administration's failed economic policies -- policies built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision and no discipline in the system."

Her efforts fell short. The Democrats managed to muster only 60% of their members behind the bill and needed a mere 5% more to ensure passage -- 140 supported the bill and 95 opposed it. She held the vote open for 40 minutes trying to turn nays into yeas.