House of Representatives Rejects Bailout Plan
LARRY KING, HOST: Tonight, the House has rejected that mega billion dollar financial rescue plan. And the Dow suffers its biggest one day point loss in history. Now what?</s>REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: What happened today cannot stand. We must move forward.</s>KING: The blame game gets brutal.</s>UNIDENTIFIED MALE: We could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House.</s>KING: And the political fallout while the presidential candidates maneuver for election advantage.</s>SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: It's an outrage that we're in this mess.</s>SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: That's not leadership. That's watching from the sidelines.</s>KING: And Suze Orman joins us to take your questions. What does this money meltdown mean to you, your family, your future? She's got the bottom line answers, next on LARRY KING LIVE. What a day. Now, let's start with Ali Velshi in New York, CNN's senior business correspondent, the host of "YOUR MONEY". What's it all mean -- Ali?</s>ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: All right, Larry, the biggest point -- you said it -- the biggest point drop ever for the Dow. Until then -- until today, it was September 17th, 2001. It's a big percentage drop, too. And if you're invested in something that looks like the S&P; 500 -- 500 stocks -- your drop was even bigger -- almost 9 percent. But, Larry, I can't believe I'm saying that the stock market is sideshow here. It's not even the one that matters. What matters is your connection to these frozen debt markets, the fact that companies can't borrow money, in some cases, for operations. And that could affect your job and your salary -- the fact you can't get a loan if you needed one right now, a mortgage, and the fact whoever is going to buy your house, if you're trying to sell it, can't get financing for that. So that the issue here is there's a major disconnect, Larry, between Wall Street and Main Street. And most people are thinking that this has nothing to do with them. They might be thinking they're socking it to Wall Street by not having this deal go through. The bottom line is that socks it right back to you.</s>KING: Ali, I get the feeling we'll be calling on you every night. Thanks.</s>VELSHI: I'm here for you.</s>KING: He's always right on the money, no pun intended. Ali Velshi. Now we go to Suze Orman, our personal finance expert. She hosts her own program and is a "New York Times" best-selling author. Is he right? How serious is this?</s>SUZE ORMAN, PERSONAL FINANCE EXPERT: Well, as we've been saying, it's serious. And here's the problem -- it's getting even more serious because, why? The people who are in charge seem to be fighting with one another. Nobody can come to an agreement. And who's being affected by it? You are. You are, people. Look at the values of your 401(k)s, your retirement plans. I know, so many of you are walking around saying I don't want them to give all these institutions $700 billion. Well, we just lost $1 trillion today alone. Today -- $1 trillion of the stock market was lost today. I don't know -- $700 billion, a trillion. We lost it today all because we cannot and we do not have leaders that can make a decision here.</s>KING: What can an ordinary -- what can the guy on the street do?</s>ORMAN: The guy on the street has got to understand, first, he or she has got to secure the funds that are safe. We've said it before on this show and I'll say it again -- if you have money in a savings account, you have money in a money market account, you have got to know that that money is insured, everybody. You need to make a call. Ask. You need to go on to myFDICinsurance.gov. Find out. Is the money that you have in institutions insured by FDIC? If you're in a credit union, is it insured, you know, there? Are you insured? You have to find out that you have the right limits there. That's the first thing they should do. Next, you have to look at your investments. You have to look at your credit. You have to look at what you've got going on in your life, Larry. And it just depends on your situation.</s>KING: Does there have to be a rescue package?</s>ORMAN: Seems to me there's going to be have to be a rescue package, not so much to rescue these institutions that are failing. But you just heard Ali say so. We have a credit crisis going on here. And what the normal person does not understand, how it's going to affect them. So, if I can, maybe I can just tell you this. So who cares if you can't get a loan to buy a home or a car? All right, maybe you can't afford to buy one anyway. But whether you know it or not, when there is a credit crisis, the banks that issue you a credit card, they are going to start to take down your credit limit. So let's say you have a $5,000 credit limit. You've charged $3,000 on that credit limit. They now are going to take away that $2,000 of unused credit. You're going to go -- not having read any of your mail -- you're going to go and try to charge something and you're going to be denied. Why? Because you don't have any available credit limits anymore, because they're all going to disappear. Then how is America going to live? Because why? All of you charge money on your credit cards every day just to get by. You're all going to be in serious trouble because of this.</s>KING: So the people that are OK are those who pay the credit bill every month, right -- who pay the credit card bill and don't accumulate interest?</s>ORMAN: That's right. But who does -- how many people do that today? Today, people are using their credit cards to charge their gas, to buy food, to go out to eat, to do everything. And when the bill comes, all they do is pay the minimum payment every single month, thinking it's OK. It's just life. Well, guess what? It's not OK anymore. And people are going to find out very shortly here, when all their credit lines start to disappear, that if they don't have the money to buy something, they're not going to be able to get by anymore. So this is going to affect every single one of you, whether you know it or not.</s>KING: More foreclosures coming?</s>ORMAN: I think more foreclosures are coming. However, if this had passed, it's possible that at least the people who owned homes -- that are -- they were about to lose them, they'd be dealing now with the government. And the government would have an incentive to possibly reduce your mortgage, give you more time before they foreclosed on you. Banks aren't dealing with you. Banks don't care what anybody says. If you're behind on your payments, banks are foreclosing on you. You're in trouble. But now, without this, all that goes away. So, yes, without this, more foreclosures are coming.</s>KING: Do you think, then, from your standpoint, more people in Congress will come to their senses and pass it on Thursday?</s>ORMAN: I don't know. You know, I wish I had a magic wand or I could knock some sense into some people here. But I do think that somebody has got to come up with some plan, because nothing is working here. And it's really far more serious than I think any of us really have any idea.</s>KING: Suze will be back with us later in the show and she'll be taking your questions. We have a new feature, Larry King Interactive. It's your chance to be part of the show. What do you think about what's being said right now? Whether you agree or disagree, sound off. Interact now at CNN.com/larryking. We all know that bailout bill was rejected. And we'll talk to two members of Congress -- one voted for it, one voted against it. Suze sticks around and comes back later. We'll be right back.</s>KING: OK, in New York, Congressman, Charlie Rangel, Democrat of New York, chairman of the House Ways and Means. He voted in favor of that emergency bill today, the rescue package. In Washington is Congresswoman Marilyn Musgrave, Republican of Colorado, who voted against it. So we'll start with you, Marilyn. Why?</s>REP. MARILYN MUSGRAVE, COLORADO, VOTED AGAINST BAILOUT: Well, I believe that bill was really fatally flawed from the beginning. And here we are in the waning hours of Congress, we didn't get into this mess in 72 hours and we're sure not going to get out of it in 72 hours. The amount of the bill, $700 billion, is absolutely staggering. And, you know, we needed assurances that the taxpayers weren't going to be stuck with this -- this incredible debt. And so we needed those assurances today. Both Republicans and Democrats voted against the bill. And we need fundamental restructuring of Fannie and Freddie. And there are a lot of things that we need to do...</s>KING: OK...</s>MUSGRAVE: And I am willing to stay and work until we find a solution.</s>KING: Charlie, why is she wrong?</s>REP. CHARLES RANGEL (D), NEW YORK, VOTED FOR BAILOUT: Well, I didn't think we had a choice. The people that have been responsible for the reckless lack of regulation of the industry have come to us at the eleventh hour with a gun to our heads saying that if we didn't support the $700 billion bailout, that the sky will fall and we'll never see a fiscal crisis like this since 1929. Credit is not just for the big time investors. It's for every American, no matter poor, middle class. It affects our country. It affects the world. And whether you're trying to send your kids to school, pay your mortgage, buy gasoline, it's credit there. When they freeze it for the rich, it's just an inconvenience. But when people start losing their jobs and their ability to take care of their family, I was just not prepared to take the risk.</s>KING: Congresswoman...</s>RANGEL: It wasn't an easy vote.</s>MUSGRAVE: Well, actually...</s>KING: Congresswoman Musgrave, why go against your own president?</s>MUSGRAVE: Well, actually, in 2005, we tried to reign in Fannie and Freddie. We tried to reign them in with a voice amendment that would really bring some needed reform. In 2007, we had an amendment by Congressman Scott Garrett from New Jersey that would have limited their portfolios. Many of us saw this coming. And now here we are. And unless we have restructuring of Fannie and Freddie, we'll be right back in this mess again.</s>KING: Is it hard, though, Congresswoman, to go against your own president?</s>MUSGRAVE: Well, it's a very serious day. And, actually, the ones I'm thinking about are the American taxpayers. And I don't think that we should put the taxpayers on the hook for Wall Street. Wall Street really needs to work out of this mess. And we need to help them do that.</s>KING: Congressman Rangel, supposing it doesn't go through? Supposing Thursday nothing happens. What's the alternative?</s>RANGEL: It's going to go through. A lot of the Republicans, even though the majority had voted against the president, they're going to realize that the market has really dropped. They're going to hear back home that people can't get credit for anything. And they're going to change their vote. I'm just as angry as they are. But it's really surprising, I didn't know the Republicans had all of these solutions, because President Bush and Secretary Paulson said the market was fluid, the economy was growing. And then all of a sudden comes the crash and they put this pistol to our head and tell us that if we don't vote this way, there's going to be a crash. I don't really think that we in the Congress can take that type of gamble. It's one thing just to say who's to blame, but it's another thing to take the gamble that people are going to suffer. And it's going to be the middle class and...</s>KING: Congresswoman...</s>MUSGRAVE: We're going to have to work hard.</s>RANGEL: ...and not the barons.</s>MUSGRAVE: We're going to have to work hard -- no partisan bickering, no finger-pointing. We're going to have to get in there and work for the American taxpayer and help Wall Street work out of this mess. We can come up with a solution. And inaction is not -- it will be acceptable. So we've got to stay here and work until the work gets done.</s>RANGEL: Well, that's why...</s>KING: Do you have an idea what they could...</s>RANGEL: That's why I voted aye.</s>KING: Congresswoman, do you have an idea what they could do to suit you?</s>MUSGRAVE: Well, first of all, they have to restructure Fannie and Freddie. We need guarantees that the taxpayer is not going to be on the hook. And, again, we didn't get this mess overnight. Decisions made in haste are never good. So I'm going to be there working hard. You know, a number of Democrats and Republicans, we are committed to finding a solution to this problem.</s>KING: Do you concur with that, Congressman?</s>RANGEL: There's no question our constituents, in looking at the market and seeing how credit is being frozen, seeing how difficult it is -- things that were taken for granted, the Republicans really have screwed up the situation. But again, we're just going to have to wait until the end of this year to get regulations back, to give some guidance and not to expose the taxpayer to type of ruthless behavior by the investment bankers.</s>KING: We'll be...</s>MUSGRAVE: Charlie, we have to...</s>KING: We'll be calling on both of you...</s>MUSGRAVE: ...you have to remember, in '05 and '07, we tried to reign in Fannie and Freddie, and we couldn't get that...</s>RANGEL: I don't think we should talk about that. We've had eight years...</s>MUSGRAVE: ...amendment passed.</s>RANGEL: We've had eight years of Bush, eight years of deregulation, eight years of Republicans saying keep government out of business, let the free marketplace work its will.</s>KING: All right, I've to get a break. We're going to call on both of you again. Thanks.</s>MUSGRAVE: Let's work together.</s>KING: Congressman Charlie Rangel.</s>MUSGRAVE: Thank you.</s>KING: Congresswoman Marilyn Musgrave. Hey, don't forget about our new interactive blog, CNN.com/larryking. We've got a great discussion going on right now. Get your questions ready. We'll be back in 60 seconds with Suze.</s>KING: We're back. Did the House do the right thing by rejecting the bailout? That's our quick vote tonight. Go to CNN.com/larryking right now and vote. We have a question from our new blog. It's from Terry. And the question is: "Over a trillion dollars was lost in the stock market today. Suze Orman, where did the money go?"</s>ORMAN: The money went vaporized, because as the stocks go down, people take losses, the money is gone. Now here's the thing, we just heard the Congresswoman say we've got to settle this, we've got to do this. Oh, give me a break, everybody. You saw $1 trillion go away today. If something isn't done quickly here, you're going to see these markets lose far more than $1 trillion. Do not be surprised if you don't see these markets go down to like 8,000 -- it's very easily you will if they don't come up with something quickly. So when the market -- when stocks go down, money is lost. We lost $1 trillion today.</s>KING: All right. Suze is our favorite guest -- one of our favorites. And she'll be back. More with Suze coming up. But first, two brilliant economists -- two of our favorite people debate today's fiasco, when we return.</s>KING: Two terrific guests join us now. They've been with us before. Always great have them in. In Washington is Ben Stein, the economist, commentator, "New York Times" columnist, former presidential speechwriter, best-selling author. His latest book is "How To Ruin the United States of America." And he supports Senator McCain. In Princeton, New Jersey, Paul Krugman, the "New York Times" columnist, professor of economics and international affairs at Princeton. He's a best-selling author, as well. His most recent book is "The Conscience of a Liberal." All right, Ben, I know you've had your reservations about the bailout. What do you make of what happened today?</s>BEN STEIN, ECONOMIST, SUPPORTS MCCAIN: Not that surprising. I mean we have a president who has exhausted his credibility, a Treasury secretary who is severely disliked and whose highly contemptuous attitude not won him any friends on Capitol Hill. We have a plan that is a stinking plan, although it probably should have been passed anyway. We have a Wall Street which has taken some of the biggest salaries of all time for doing some of the worst jobs in the history of management of any enterprise. Small wonder that Americans are furious. But that being said, it should have been passed. Mrs. Pelosi should have counted the votes and made sure it was passable and would have passed if it were going to a vote.</s>KING: All right. We go to Paul Krugman. Your thoughts?</s>PAUL KRUGMAN, ECONOMIST & "NEW YORK TIMES" COLUMNIST: I'm shocked to say I think I dis -- I think I agree. See, I'm so used to disagreeing. I agree with Ben about just about all of that. This was not a good plan. This was a plan -- it was a horrible plan a week ago and it was made sort of not totally horrible by the changes. But it was still not a good plan. But we did need to do something. And this was the most astonishing scene. I mean this was -- you know, Republicans say they voted against it because Nancy Pelosi made a partisan speech. You know, it's like, ma, she's saying nasty things about me. And they voted down a rescue for -- you know, this is -- this was a terrible thing. You know, I don't know how this plays out now, but this was -- you know, we are -- we're playing with fire here. We really are at some risk of really, well, look, what my wife said was we're now a banana republic with nukes. That's her description of where we are right now.</s>KING: Ben, what do we do?</s>STEIN: Well, I think, first of all, you call Congress back into session immediately. This idea that we can't have a session Tuesday or Wednesday because of the Jewish holidays is nonsense. We don't have a state with an established religion and if we did, it certainly wouldn't be Judaism. So let's get everybody back to work immediately. I mean people work on Christmas, people work on Easter, people work on Sunday. Get back to work. Pass the bill. Let's have the Republicans say OK, we made our statement, but, look, this has nothing do with Fannie and Freddie. It has nothing to do with anything except that we've got to get credit flowing again. We'll keep a close eye on Mr. Paulson, we promise you, but let's get this darned thing running.</s>KING: OK...</s>STEIN: Let's get some confidence back in the system.</s>KING: By the way, he mentioned the Jewish New Year. Happy New Year to all our Jewish friends.</s>STEIN: Happy New Year to you, too, sir.</s>KRUGMAN: Happy New Year.</s>KING: And it is year 5769. We're an old people.</s>STEIN: Yes, very old.</s>KING: OK, Paul, what do we do?</s>KRUGMAN: Well, you know, there's two possibilities -- actually, I'm not so upset about this waiting until Thursday because I think that the carnage in the markets will help concentrate Congress' mind. So I think we have a much better chance of actually doing the right thing. You know, again, we've got to say this is -- as Ben says, it's a stinking bill, but it's better than nothing at all. Two more days won't kill the world economy. I guess we need something to focus. If it fails on Thursday, which is, I have to say, still a very real possibility, then I think back to the drawing board. Scrap the whole plan, write a plan which, given the way things are, is a plan that will -- that Democrats will sign onto and pass it with Democrats only and just say, look, we're being the grownups here.</s>STEIN: Maybe have a plan in which the money goes to the homeowners and therefore -- thereby they can pay their mortgages. That stabilizes the mortgage bundles in the debt markets. Debt stabilizes the banks and investment banks and insurers that hold them. And the process goes from the bottom up instead of from the top down. Maybe that</s>KRUGMAN: And one in which the federal government takes over the firms -- the financial institution that just have to be kept running, as they did with AIG just not that long ago, because we have to -- you know, what this plan was, in some ways, the hardest thing to sell, because it was saying Uncle Sam -- which is you and me, because we're the taxpayers -- is going to go and buy up all this toxic waste from the banking sector. And everybody, rightly, is asking well, you know, aren't we -- you know, isn't that something for nothing? I think it was designed so it would actually be not too bad. But it was the wrong place to start. So we can do this better. And we can do this -- you know, there are precedents. Sweden cleaned up a bad mess, and they did it pretty well, 15 years ago. We could do, you know, we could learn something from the Swedish model.</s>STEIN: Well, we could try stopping these nutty experiments. I mean Paulson had this nutty experiment of letting Lehman Brothers fail. Now he's got this nutty experiment of saying make me the czar of the whole economy and don't have give me -- don't have any oversight over me except a tiny little bit. Let's have something under the Constitution, not under the whim of Henry Paulson. And let's have it come from the little people up instead of from the very rich people down.</s>KING: Why, Paul, does President Bush appear not to have clout here?</s>KRUGMAN: Oh, you know, who believes him anymore? I mean the -- you know, when Henry Paulson speaks, people see the ghost of Colin Powell behind him saying there are weapons of mass destruction. When the president appeals for national unity, people think of all the times that he exploited 9/11 for partisan gain. And there have just been too many lies from this White House. Nobody -- nobody believes what it says. And the Republicans in Congress are, you know, they would like to pretend that the last eight years didn't happen. So they -- they're not going to be swayed by an appeal from that guy in the White House. They can't remember his name.</s>KING: We'll have...</s>KRUGMAN: What was his name?</s>KING: We'll have Ben respond. We'll be right back with Ben Stein and Paul Krugman. Whose fault is it that the bailout didn't work -- McCain, Obama, who? We'll continue this debate next.</s>UNIDENTIFIED MALE: Breaking news. Look at this -- a 777 point drop. 777 -- that's the biggest number we've ever seen on that board with a negative sign in front of it.</s>KING: We're back with Ben Stein. He's in Washington. Paul Krugman, who's in Princeton, New Jersey. He teaches at that distinguished university. Who's helped presidentially by all of this, Ben?</s>STEIN: I'm not sure either one is helped. But I think that what happened today was a scream -- a howl of anger from America that these guys on Wall Street have sucked the blood out of this country like giant ticks and we are sick of it and we're not going to give them anymore money. That being said, the bill still needed to pass. I think Mr. McCain should have put his prestige on the line and said this thing has to pass. But as to Mr. Obama, I didn't see him really going all out for it. I did see him saying it should pass. I'd like to see the two of them get together on Capitol Hill Thursday and say please, guys, pass this thing. We'll fix the problems with it later. Please, guys, for the good of America -- it's a stinking bill, again, but please pass it for the good of America.</s>KING: Paul, would you bet on that happening?</s>KRUGMAN: I would be really surprised, because, you know, basically, McCain's only chance of winning this election is to make Obama seem unacceptable, because the issues are all going Obama's way. And to do a joint appearance with Obama, I think, would be a bad thing. You know, and the McCain campaign came out, you know, just after the bill failed, blaming Obama for it. And then two hours later McCain himself came out and said we shouldn't point fingers of blame here. So I think they're a little bit confused about what they want to do. And, look, it does -- in fact, the financial crisis is focusing peoples' minds back on real issues -- on the economy. We're not talking about who can dress a moose better. And that has been working to Obama's advantage. You can see that the political current has been running his way. I mean, what -- you know, Democrats are incredibly lucky. They're getting to run against Herbert Hoover all over again.</s>STEIN: I'm afraid that is cruelly true. We are seeing a treasury secretary who has made this president, who is basically a fine, kind man, seem like Herbert Hoover. This man should be out of Treasury yesterday, and they should get somebody in there, career civil servant, who will make this happen without the monstrous ego.</s>KING: Shouldn't Paulson have been way above par, based on his background?</s>STEIN: He should have been. He should have seen the whole problem with credit coming. He should have seen the credit default swaps catastrophe coming. Look, once we have solved the problem with the bad mortgage loans, we still have not cleaned up all of the problems with credit defaults swaps, which is probably ten times the problem of the mortgage default situation. So, we have still got a lot to lean clean up. There is an enormous mess out there that has happened because of deregulation. I think only McCain has the guts to take on Wall Street to make it happen, but he is, by nature, a deregulator. So he is, by nature, not the guy to do it. He's got to have somebody strong like Krugman with him there to help him.</s>KRUGMAN: Oh boy.</s>KING: Paul, he wants you to be involved.</s>KRUGMAN: Instead, he's got Phil Gramm talking to him. But look, I'm not that negative on Paulson, but he clearly -- Paulson botched it multiply in the last couple of weeks. He failed to rescue Lehman when it had to be done. Then he said, in reward for my failure, give me all the power.</s>STEIN: Exactly, exactly.</s>KRUGMAN: This was -- it was politically a complete tin ear. It's as if he's been asleep for the past eight years. There's no sense of how people feel about this administration, in particular.</s>STEIN: It is a stunning thing that he became head of Goldman Sachs. I don't know how that happened.</s>KRUGMAN: Yes, well.</s>KING: Paul, are you optimistic or pessimistic?</s>KRUGMAN: You know, I think it's -- look, even if this thing passes or something passes, this is a long, hard stretch. The bill was nowhere close to fixing up the mess. Ben is right on that. There's a whole bunch of stuff. I think we are looking at a weak economy, possibly a lot worse than weak for sometime to come. We will survive. In the long run, we'll be all right. But my favorite economist, the great John Maynard Keynes, said, in the long run we are all dead.</s>KING: Ben, how do you see it?</s>STEIN: I think it is a terrifying situation for people who have -- who have a limited time horizon, who are retiring or preparing to retire, who are retired. It is a terrifying situation. They have been done in, double crossed, had their savings stolen from them by incompetence in government and on Wall Street. And they have every right to be furious. I think for periods longer than ten years, it will be fine.</s>KING: Paul, is anybody in this crisis making money?</s>STEIN: Oh, yes.</s>KRUGMAN: Actually, right now, with a lot of short selling -- Ben, I'm not sure.</s>STEIN: The people who bought the credit default swaps are making trillions. The people who bought the credit default swaps are going to be the richest people in the world.</s>KRUGMAN: I did see that only one stock went up today.</s>STEIN: But the --</s>KRUGMAN: That was Campbell's Soup. I guess people figuring on soup lines coming pretty soon.</s>STEIN: The people that bought the credit default swaps are making literally trillions, literally trillions.</s>KRUGMAN: I don't think that's right. We can have that discussion another time.</s>STEIN: The insurers couldn't be losing trillions if the people who bought the insurance weren't making trillions.</s>KRUGMAN: That's not really true. But, OK. But no, look, it is pretty grim. This is an across the board economy in big trouble and the stock market is reflecting that.</s>KING: Paul, would you buy stocks tomorrow?</s>KRUGMAN: No. I'm sorry. I don't usually give such direct advice but no.</s>STEIN: If I had a ten year horizon to worry about them, certainly, yes. It ten years, it will be fine. But for the next few years, I would be cautious.</s>KING: All right. Where would you just put it in the bank?</s>STEIN: I would put it in the bank. I will probably buy stocks tomorrow. So I would buy them for my son, who's only 21. But for my own lifetime I would not buy them. I would buy bonds.</s>KING: Thank you both very much. Paul, what would you do, quickly?</s>KRUGMAN: Buying bonds, actually. We did some recently and actually have done quite well, because interest rates are falling, as they tend to do when the economy is in big trouble.</s>KING: Ben Stein, Paul Krugman, two great guests, we'll have them back often. Sadly, they usually come back when there's problems. But there's problems. A great discussion continues on our new blog. Join in at CNN.com/LarryKing. Suze Orman returns to answer some blog questions, next.</s>KING: Suze Orman's back. She is on a shuttle tonight. Suze, we have our new blog going. And Jean blogs in, "today, our 401-k was wiped out due to the market tanking. How can I make sure my credit rating doesn't slip during this rough ride?"</s>ORMAN: Yes. Your 401-k and your stock investments, mutual funds going up and down have absolutely nothing to do with your Fico score, which is actually the credit rating you're referring to. What does have something to do with your Fico score is when your credit limits start to go down. So when these credit card companies start to decrease your credit limit, then 30 percent of your Fico score, which is made up of your debt what you owe to your credit limit ratio, when the credit card companies start to contract your limit, your Fico scores will go down. And when your Fico scores go down, you'll see your car insurance premiums go up, interest rates go up. Is there anything you can do about it? There's not a lot you can do about it when the credit card companies won't extend credit to you, are closing down credit limits. And that is one of the really disasters of this not passing today.</s>KING: All right. Michelle writes: "if no bill passes, what's the worst possible scenario?"</s>ORMAN: The worst possible scenario is that you will continue to see the stock market go down and down and down. You will see your own personal retirement accounts do down and down and down. Any portfolios you have will go down. Real estate will continue to go down. And while everybody's talking about what they should and should not do -- should they save Fannie Mae, Freddie Mac, you're going to see your own money start to decrease, the money you have invested. And it will take years for it to recover. So they better get something done and you better hope they get something done, in my opinion.</s>KING: Let's take a call. Phoenix, hello.</s>CALLER: Hello, Larry. This question is for Suze.</s>KING: Go ahead.</s>CALLER: Hi, Suze. You are my hero.</s>KING: What is the question?</s>ORMAN: Thank you.</s>CALLER: OK. My husband and I are in escrow to buy a home. Is this failure of a government bail out -- is that going to affect our ability to secure the loan?</s>ORMAN: No. If you're already in escrow, meaning they have already approved your loan, correct?</s>CALLER: Yes. Correct.</s>ORMAN: You should be able to go through. The question is, do you want to go through? Did you get the house at a good price? Can you afford the mortgage? Did you put more than five or ten percent down? Do you have an eight month emergency fund in case one of you loses your job or you need money for something else? Are you positive this is the time that you should be buying a home?</s>KING: We have an e-mail question from Mary Ellen in Wakesia (ph), Wisconsin: "Suze, is it true that if your bank fails, the FDIC will cover the face value of your CDs, but not the earned interest on them?"</s>ORMAN: I don't know where you got that, my dear. That is just ridiculous. Listen, again, MyFDICInsurance.gov is where you go to figure out exactly are you insured or are you not? They will insure you up to 100,000 dollars for a single account in one institution, 200,000 dollars if you have a joint account with somebody else, 250,000 dollars. So, of course, if you are under the insured limits, it doesn't matter.</s>KING: So if you had 80,000 and your interest was 9,000, you're covered for 89,000?</s>ORMAN: Bingo. You are good with numbers, Mr. King.</s>KING: I'm terrible. But I got that figured out. E-mail question quickly from Vince in Brooklyn: "maybe it's crazy to ask this, but is now a good time to get in the stock market if your goal is to stay in for the long haul? If so, what's a good sector or stock to start with?"</s>ORMAN: Hmm, as you ask that --</s>KING: Campbell's Soup.</s>ORMAN: Eat that soup. Here's the thing. If you have a lump sum of money -- and I said this about a week or two ago when you asked this; is now a good time to invest? Are you nuts? No. I think that was a quote from last time. However, if you want to put little tiny amounts of money in starting now, OK, but I have news for you. I would just sit on the sideline here and just watch. If I hadn't committed money yet, outside of a retirement account, I wouldn't be doing it quite yet, until we see what they're about to do.</s>KING: Suze, in our remaining moments -- we know you'll be back probably tomorrow. Are you pessimistic?</s>ORMAN: Yes. I'm sorry. You know, you asked me that before, was I pessimistic. I started to get -- months ago, I started to get optimistic. Things were doing a little bit better. And then all of this, when they let Lehman go -- honey, that's what started this whole thing, started to roll again. So, yes, at this point, I am not optimistic at all. And that is very not like me, I have to tell you the truth.</s>KING: I know. Thank you, Suze.</s>ORMAN: Any time.</s>KING: See you soon. Suze Orman. The politics of finances comes up next. Stay there.</s>KING: By the way, President Bush will address the nation tomorrow morning, 8:45 Eastern, 8:45 a.m., Eastern time. That will be aired, of course, on CNN. Welcome our panel, in Washington, Susan Molinari, former member of the House, in Fargo, North Dakota, Ed Schultz, the talk radio host, in Washington, Kevin Madden, Republican strategist, former adviser to Mitt Romney, and in Washington, Kiki Mclean, was a senior adviser to Hillary Clinton, now backing Barack Obama. All right, Susan, what is your read on today?</s>SUSAN MOLINARI, FMR. REPUBLICAN CONGRESSWOMAN: I think it was a very sad day. A lot of people talked about it today, but this is -- the markets were discouraging. We watched the markets drop while the vote was taking place. I hope that the leadership of both political parties -- I know they are listening and that these members of Congress come back as quickly as possible. I know some of the leaders of both political parties stayed throughout the Jewish holiday so they could try to develop and deal with some of the objections of the people who voted against this, and get this going again. But I think this is a bad day for both political parties, for the House of the Representatives, and for incumbents in general, and certainly for Americans.</s>KING: Ed Schultz, what is your read?</s>ED SCHULTZ, RADIO TALK SHOW HOST: Tough day for small businesses, Larry. This is a credit crisis. I know everybody wants to take it out on Wall Street. But the fact that we're tightening credit means that small businesses in this country are going to have a hard time meeting payroll. The Congress needs to act. There's no question about it that there are going to be job losses if they don't act. In America, we have to realize we lost 1.2 trillion dollars in the market today. What would you rather have, a 300 or 400 billion dollar bailout or more losses like this in the market? This is about jobs at this point. It's not just about saving Wall Street.</s>KING: Kevin, why do you think a good deal of Congress turned their back on this?</s>KEVIN MADDEN, REPUBLICAN STRATEGIST: Well, look, I think that having worked up on Capitol Hill, there's a tremendous amount of pressure when you have calls coming in from constituents. Probably, in this case, for every hundred calls that came in, there were probably 90 constituents saying, you have to vote against this. People are very frustrated with the size and scope of this bailout. I think they see this as Washington losing its way and instead of worrying about Main Street is worry about Wall Street. Mr. Schultz makes a good point though. Even though there are people out there who are saying that they don't like this particular plan, they know something needs to happen. You know, voters are not looking at this through the ideological lens that some members of Congress are. Instead, they're looking at this from a standpoint of something pragmatic, something real has to be done in order to help put the economy back -- going back in the right direction.</s>KING: Kiki Mclean, how do you see it?</s>KIKI MCLEAN, FMR. CLINTON CAMPAIGN ADVISER: I think one of the most unhelpful moments was all the finger pointing after the vote, when we saw some leadership, Republican leadership come out and say we had a dozen more votes but they were offended by a speech that Nancy Pelosi. I refer to those people now as the Boehner 12. I want to call through the 133 Republicans who voted against this plan and say, were you one of the 12 who wouldn't? That just did no good. If there's something you have a problem with on this plan, step up to the plate and come up with the alternative. That kind of finger-pointing did no good today. So I think what we've got to have is what Susan talked about before, leaders from both the parties stepping up, bringing solution. This is not something to be done three months down the road. There was progress made over the weekend. I know that Senator Obama had some principles he laid out last week. Several of those were met in the deal that was on the table today that was voted on. The question is, how do we keep the good parts of this and move this forward quickly. You know what, Larry? Yesterday at church, another parent that I'm at Sunday school with is a guy who works in mortgage banking, and trying to help people get mortgages. He told me there are people I can't help now because of what's going on.</s>MOLINARI: Kiki, I think you have to agree and I agree, the Republicans should not change their vote on the basis of what the speaker said in the well of the House. But that was not a helpful or appropriate speech to start this very complicated debate.</s>MCLEAN: But to suggest that 12 members of the United States Congress bailed because --</s>MOLINARI: I'm saying, I don't think that was the right speech. I didn't think it was right that they should change their vote on the basis of it.</s>KING: Let me get a break and we'll be right back. In addition to commenting on our new blog, you can check out our CNNMoney.com for their round the clock coverage of this crisis, CNNMoney.com. We'll be right back.</s>KING: A couple of political notes, gang. Ed Schultz, what are you looking forward to in the Thursday night vice-presidential debate?</s>SCHULTZ: Gosh, Larry, Sarah Palin's answer might fit right now, because I think that's where most Americans are; nobody can figure this mess out. I look for her to probably do a little bit better than what most people expect. I do think the pressure is going to be on Senator Biden. He can't give her a pass. This is about winning the White House. If she makes a mistake, he's going to have to find a way to politely and professionally call her on it. There's a lot of Democrats out there that are ready to play hardball to make this thing right and they're counting on Biden's experience on Thursday night to win this debate.</s>KING: Kevin, the format doesn't help him, right? There's no cross talk?</s>MADDEN: That could actually play to his advantage. A lot of Democrats would worry that Joe Biden would look too strident in any criticism of Sarah Palin. Since he's known as a rather loquacious senator, could seem very condescending in some of his criticism of her. You know, I think one of the interesting things you will see is Sarah Palin challenged Joe Biden on his strong suit, which is foreign policy. I think Joe Biden has a very outside the mainstream view when it comes to a lot of the big foreign policy debates of the past, notably defense cuts of the '80s that even Walter Mondale voted against, as well as his vote against the surge. If Sarah Palin is looking to establish herself, get back on track again, show that she's up for the job, that would be an area I would look to see if she would challenge Joe Biden on.</s>SCHULTZ: I'd stay away from that.</s>KING: Kiki, do you think the expectation for her is low?</s>MCLEAN: Of course it's low. You know what? It's sort of silly that it's low because she is going to be just fine. She had a great interview with Charlie Gibson. She had a couple of rough moments with Katie Couric. She's been in multiple debates. She took out an incumbent governor of Alaska. You know what? Joe Biden has had plenty of experience in debates with women. We women can take it. He was in a lot of debates with Hillary Clinton. I think what he knows is that he's debating somebody's intellect and not their gender. He's talking what they see in the future. In this debate, here's the interesting thing, we had a lot of talk about personalities of Biden and Palin. But this really is a debate about McCain and McCain's record. And we'll see if Palin is going to really defend it.</s>KING: Susan, what are you expecting?</s>MOLINARI: I think you're absolutely right, Kiki. This will be Sarah Palin, who I think will do a phenomenal job in promoting Senator McCain and attacking Senator Obama. She has shown she's capable of that. She has shown she knows how to set the right tone. I think her expectations are low and she is going to challenge those expectations. And I think she's going to do very well.</s>SCHULTZ: Congresswoman, defending John McCain is going to be hard on the economy, because he was for this package today and he could not deliver his Republicans in the House. This was a loss for John McCain today.</s>MOLINARI: It was not. It shows John McCain is willing to step into a messy situation to show leadership. Where was Barack Obama? Sitting on the sidelines, not getting involved.</s>SCHULTZ: Barack Obama delivered two-thirds of the Democrats today.</s>MOLINARI: Please, Barack Obama wasn't even in town. Barack Obama wasn't even in town. John McCain was involved. He took a leadership position and he got in the middle of a mess and said, you know, consequences be damned, because this is the right thing to do. This is what leadership is about.</s>SCHULTZ: Really? I thought he went to dinner Saturday night with Joe Lieberman. He wasn't involved with any of these negotiations. I don't know where you get your information.</s>MOLINARI: Of course he was.</s>SCHULTZ: He was not. He was nowhere near these negotiations.</s>MOLINARI: I get it from House Republican leadership. But I don't know, maybe your sources are better than that.</s>SCHULTZ: My sources are very good. I talked to Steny Hoyer today. And John McCain was a no show. I can guarantee you going to dinner Saturday night with Lieberman is going to get him nowhere.</s>KING: Kevin, we have 20 seconds. Kevin?</s>MADDEN: Look, I think that Senator McCain -- I think Congresswoman Molinari is right, that Senator McCain has showed that he's ready to go out there and show leadership in a time of crisis. Barack Obama seems to want to sit on the sidelines.</s>KING: Thanks group. We'll have you all back, as always. Paul Newman, the Oscar winning actor and philanthropist, died of cancer this weekend at the age of 83. He was an A-list movie star who turned his homemade salad dressing into a food company that generated, get this, more than 250 million dollars for charity. His company slogan, "shameless exploitation in pursuit of the common good." Those words are vintage Paul Newman, full of humor, humanity and heart. Our thoughts go out to his family and friends. Donations can be made in Paul Newman's memory at HoleInTheWallCamps.org. We have a new feature, LarryKingInteractive. It's already gotten thousands of comments tonight and we just started it. It's your chance to be part of the show. Interact right now. CNN.com/LarryKing. Did the House do the right thing by rejecting the bailout? That's tonight's question. Vote now, CNN.com/LarryKing. Right now, we slash to New York. Here's Anderson Cooper with "AC 360." Maybe he has the to answer what happened today. Anderson?