Lawmakers quickly point fingers after bailout fails

WASHINGTON (CNN) -- Democrats and Republicans on Capitol Hill immediately blamed each other for the failure of a $700 billion bailout package in the House on Monday.

House Minority Leader John Boehner, R-Ohio, said there would be no revote Monday on the bill aimed at buying up bad mortgages and stabilizing the faltering economy because House members had left the Capitol.

It was unclear in what form the congressional leadership would bring the bill back to the House floor.

The stock market immediately dipped hundreds of points after it became apparent that the bill would fail. The Dow closed down 777 points at the end of trading Monday, a record plunge. Watch blocked bailout win or loss? »

The package, which was backed by both the Democratic and Republican congressional leadership as well as President Bush, failed in the House by a vote of 228-205. See roll call of how House members voted (PDF)

"My sense is that this exact same bill couldn't pass," said Missouri Rep. Roy Blunt, the No. 2 Republican in the House. "But this bill could be the basis for final congressional action. They'd have to expect some changes."

Nearly 60 percent of Democrats voted for the bill, and about a third of Republicans supported it.

House Republican leaders blamed Nancy Pelosi, the Democratic Speaker of the House, for the bill's failure, saying she had scuttled a bipartisan compromise with a "partisan speech" shortly before the vote. Pelosi started her speech by citing "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."

"I do believe that the vote could have succeeded," Boehner said in a news conference. "But the speaker had to give a partisan speech ... that poisoned our caucus."

Rep. Steny Hoyer, the No. 2 Democrat in the House, rejected the Republicans' accusation as "absurd."

Rep. Barney Frank, the House Democrats' main negotiator on the package, called the Republicans' finger pointing an excuse.

"Because somebody hurt their feelings, they decided to punish the country?" Frank said. "I don't believe they had the votes. They are covering up the fact that they don't have the votes."

Rep. Michele Bachmann, a Minnesota Republican, denied that the bill's opponents had voted against it because of hurt feelings. "I want to assure you that is not the case. We are not babies, sucking our thumbs," she said.

"Clearly it is important to get it done quickly, but it is more important to get it done correctly," said Republican Rep. Jeb Hensarling of Texas.

After the vote, President Bush was "disappointed" that the House failed to pass the bailout, saying, "We put forward a plan that was big because we got a big problem. Watch a White House spokesman describe the president's reaction »

"Our strategy is to continue to address this economic situation head on. We'll be working to develop a strategy," Bush said.

Bush is scheduled to speak on the bailout plan Tuesday at 8:45 a.m. at the White House.

The Senate had planned to take up the bill after the House had passed it, but now it is unclear how the senators will proceed.

"Democrats are doing our part to improve the administration's flawed plan, but we will need the support of more Republicans to get this done," Senate Majority Leader Harry Reid, D-Nevada, said in a statement.

"With the stock market recording its largest point drop ever in the aftermath of this vote, it has never been more clear how important it is to put politics aside and come together to stabilize our economy for all Americans," Reid said. "I hope House Republicans will reconsider their vote and decide to put country first."

After the House vote, Sen. Mitch McConnell, the Republican leader in the Senate, said lawmakers were "going to stay here until we get this job done," but he admitted he could not say how to push a package through.

"No action is not an answer," McConnell said.

The House will not be in session Tuesday and Wednesday, but behind-the-scenes work will continue until it reconvenes Thursday.

Sen. Judd Gregg, the lead Republican Senate negotiator on the deal, said there would be real consequences if Congress did not approve legislation. iReport.com: Share your thoughts on the bailout

"If we don't act ... a lot of people are going to lose their jobs," he said.

When the gavel came down, the members on the House floor were nearly silent. Democratic members immediately met in Pelosi's office after the vote. Republican members went into the office of Boehner, the top Republican in the House.

While thanking Treasury Secretary Henry Paulson for negotiating on the bill, Pelosi said on the House floor that the Democrats had insisted that the bill "protect the American people and Main Street from the meltdown on Wall Street."

After the vote, Boehner said, "Americans are angry, and so are my colleagues. They don't want to have to vote for a bill like this, and I understand that." Watch Boehner blame Pelosi »

"I think that we need to renew our efforts to find a solution that Congress can support. I do believe that we could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House," he said.

But Democrats dismissed the Republican complaints, saying the Republican leadership failed to persuade their members to support the bill.

"They lost 2-1 on their own side, voting against their president, their presidential candidate and against every leader in their own party," one Democratic source said.

Pelosi said the Democrats lived up their side of the bargain.

"We've entered into those conversations in a spirit of bipartisanship, with the understanding that each side would have half of our votes to pass the bill," she said. Watch a Wall Street trader say they need the bill »

"When the legislation came to the floor, the Democratic side more than lived up to its side of the bargain," she added. "While the legislation may have failed, the crisis is still with us." Watch Pelosi say the Democrats delivered »

Rep. Barney Frank, a Massachusetts Democrat who was a key negotiator of the bill, said Republican leaders were blaming Pelosi because they were embarrassed that they failed to get a majority of the Republicans to vote for the bill. Watch Frank say the GOP 'punished' the country »

"There's a terrible crisis affecting the American economy. We have come together on a bill to alleviate the crisis," Frank said. "And because somebody hurt their feelings, they decide to punish the country? I mean, I would not have imputed that degree of pettiness and hypersensitivity."

Before the vote, many House Republicans expressed opposition to the bill, saying it departed from free-market principles. Republican congressional aides also said calls from constituents were running 10 to 1 against the legislation.

"The relevant test is, when you look at the good in the bill, when you look at the bad in the bill -- does it take America in a direction that you believe America should go?" said Rep. Jeb Hensarling, a conservative Texas Republican, before the vote. "By that test, Madam Speaker, I will vote no on this legislation.

"I fear that ultimately it may not work. I fear that it is too much bailout and not enough work out. I fear that taxpayers may end up inheriting the mother of all debts," he added.

Another Republican called on members to vote their conscience.

"Ask yourselves why you came here and vote with courage and integrity to those principles. If, like me, you came here because you believe in limited government and the freedom of the American marketplace, I urge you vote in accordance with your convictions," Rep. Mike Pence, R-Indiana, said.

"Stand up for limited government and economic freedom. Stand up for the American taxpayer. Reject this bailout and vote no on the emergency economic stabilization act," he said.

CNN's Jessica Yellin, Deirdre Walsh and Scott J. Anderson contributed to this report.