WASHINGTON – In a nail-biter, the House Friday approved the Bush administration's historic $700 billion financial markets rescue package, a measure promoted as a means to prevent a U.S. economic collapse.
Lawmakers voted 263-171 to pass the bill, a comfortable margin that was 58 more votes than the measure garnered in Monday's stunning defeat.
Of the 263 supporters, 172 were Democrats and 91 were Republicans. On Monday, 133 House Republicans joined 95 Democrats in rejecting the measure.
"We have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country," President Bush said before quickly signing the bill into law.
Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.
"We all know that we are in the midst of a financial crisis," House Republican Leader John Boehner of Ohio, said shortly before casting his vote for government intervention in private capital markets that was unthinkable only a month ago.
"And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen."
Speaker Nancy Pelosi, D-Calif., said the bill was needed to "begin to shape the financial stability of our country and the economic security of our people."
Before the vote, member after member went to the well of the chamber to voice discomfort and displeasure with many aspects of the bailout legislation. But they also said they would vote for it anyway. And nearly 30 members who voted against it on Monday said beforehand that they had changed their minds.
Stocks were up on Wall Street, where there was a lot of anticipation of the vote but where investors also were buffeted by a bad report on the job market. The Labor Department said employers slashed 159,000 jobs in September, the largest cut in five years and further evidence of a sinking economy.
Federal Reserve Chairman Ben Bernanke, who had joined the administration in urging quick action, said, "The legislation is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses." He said the Fed would work closely with the Treasury Department to put the bill's provisions into effect.
The House vote marked a sharp change from Monday, when an earlier measure was sent down to defeat, largely at the hands of angry conservative Republicans.
Some of them blamed Pelosi for delivering what they viewed as partisan speech before Monday's vote.
Senate leaders quickly took custody of the measure, adding on $110 billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry.
The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the major party presidential candidates and outside groups joined forces behind the measure.
On Friday, Pelosi gave a decidedly less partisan speech before the vote, stressing the importance of passing the measure. She called it a vote for "Mr. and Mrs. Jones on Main Street."
House passage of the bill was driven by public opinion, which suddenly shifted after the stock market took its largest-ever one-day dive on Monday.
"I think most Americans understand that we're facing a serious economic crisis" House Minority Leader John Boehner said. "And I think over the past few days, it's been clear the House Republicans have stood on principle. We made this bill better. It's not perfect but it's clearly better than it was a week ago."
Most lawmakers who switched to a 'yes' vote this time said it's a bitter pill, but changes by the Senate to the rescue plan made it easier to swallow. Among the incentives cited were the federal deposit insurance limit being raised from $100,000 to $250,000, the addition of alternative minimum tax relief for middle-income Americans and several tax breaks for businesses. The Senate passed the bill 74-25.
"I voted against a bad bailout bill on Monday, and will now vote for a better rescue plan, not because I like it or want to, but because we fought as hard as we could for more reforms," said Tennessee Rep. Zach Wamp.
"Now it's time to vote for the financial security of all Americans and small business people on Main Street," Wamp said.
Newfound supporters say they started receiving more calls from constituents in favor of the bailout package, which many described as a lesser evil than doing nothing.
"I have decided that the cost of doing nothing is greater than the cost of doing something," said Rep. John Lewis, D-Ga.
Rep. Emanuel Cleaver, D-Mo., said he voted for the rescue plan because conditions have changed since Monday.
"After days of talking to constituents, bankers, experts and community leaders in the district, I believe this package has a much better chance of rescuing the economy and restoring confidence," he said, explaining that he learned that Kansas City is struggling to borrow money to fund public projects.
"America feels differently today than it did on Monday about this bill, and I believe the House vote today will reflect that shift."
Some House members, like North Carolina Rep. Sue Myrick, said they reluctantly switched their vote to "yes."
"I don't want to have to vote for this bill, and I'm not defending it," Myrick said in a written statement released to FOXNews.com. "It's full of things that I don't believe in.
"But we're on the cusp of a complete catastrophic credit meltdown. There is no liquidity in the market. We are out of time. Either you believe that fact, or you don't. I do."
It was little more than two weeks ago that Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.
The core of the plan remains little changed from its inception -- the Treasury Department would have $700 billion at its disposal to purchase bad mortage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand.
At the same time, lawmakers have dramatically changed the measure, insisting on greater congressional supervision over the $700 billion, taking measures to protect taxpayers, and insisting on steps to crack down on so-called "golden parachutes" that go to corporate executives whose companies fail.
FOX News' Chad Pergram and The Associated Press contributed to this report.
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