George W. Bush Signs the Revised Emergency Economic Stabilization Act into Law
Under the Bush Administration, real GDP grew at an average annual rate of 2.5%, considerably below the average for business cycles from 1949 to 2000.
Bush entered office with the Dow Jones Industrial Average at 10,587, and the average peaked in October 2007 at over 14,000. When Bush left office, the average was at 7,949, one of the lowest levels of his presidency. Unemployment originally rose from 4.2% in January 2001 to 6.3% in June 2003, but subsequently dropped to 4.5% as of July 2007. Adjusted for inflation, median household income dropped by $1,175 between 2000 and 2007, while Professor Ken Homa of Georgetown University has noted that "after-tax median household income increased by 2%" The poverty rate increased from 11.3% in 2000 to 12.3% in 2006 after peaking at 12.7% in 2004. By October 2008, due to increases in domestic and foreign spending, the national debt had risen to $11.3 trillion, an increase of over 100% from the start of the year 2000 when the debt was $5.6 trillion. By the end of Bush's presidency, unemployment climbed to 7.2%. The perception of President Bush's effect on the economy is significantly affected by partisanship.
The Emergency Economic Stabilization Act of 2008 (Division A of Pub.L. 110-343, enacted October 3, 2008), commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the subprime mortgage crisis authorizing the United States Secretary of the Treasury to spend up to US$700 billion to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks. Both foreign and domestic banks are included in the program. The Federal Reserve also extended help to American Express, whose bank-holding application it recently approved. The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008.
The original proposal was submitted to the United States House of Representatives, with the purpose to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The bill was then expanded and put forward as an amendment to H.R. 3997. The amendment was rejected via a vote of the House of Representatives on September 29, 2008, voting 205-228.