The Emergency Economic Stabilization Act of 2008 (EESA) is an Act of Congress that was formally signed into law by President George W. Bush on October 3, 2008. Sponsored by United States House Representative Patrick Kennedy of Rhode Island, this highly contentious bill was the product of a series of legislative battles wound tightly around the aggressive interventionist policies of U. S. Treasury Secretary Henry Paulson.
Marked as a bailout of the U. S. financial industry, the EESA derived from the quick collapse of billions of dollars of distressed assets held by firms across the nation; notably, mortgage-backed assets that had lost value in an early-year housing market downturn. The bailout was an infusion of up to $700 billion into the U. S. economy in an attempt to reduce the risk of credit market freezes that could lead to a deep economic depression.
The crisis underpinning the eventual passage of this legislation helped to highlight the strengths and weaknesses inherent within the U. S. political system, but more interestingly showed interwoven politics, media, and economics having a drastic effect on the legislators during the drafting process. During the debates in Congress over the bill’s passage there were effects on legislators of both parties by the media, economic news from Wall Street, and the reactions by the American public to the actions of Congress.
These effects were documented in real-time in the national media as the legislation bounced between the House, Senate, and the White House; legislators and the President commented on it’s progress and everyone kept their eyes on the Dow Jones Industrial Average (DJIA) daily to keep tabs on the market reaction and the reaction from the American public. Ultimately, these factors played heavily in the outcome of the bill’s passage on Capitol Hill as well as the implementation of the policies emplaced.