Members of the House voted 205-228 today against the proposed Emergency Economic Stabilization Act of 2008.

Shortly before the final tally was announced, the Democrats had voted 141-94 for the measure, which was requested by the Bush administration.

Republicans had voted 66-132 against the measure.

One Republican had not voted.

During debate, supporters argued that Republicans and Democrats would have to unite to pass an financial institution asset repurchase plan to reassure the financial markets.

Opponents argued that the EESA proposal was too expensive, designed behind closed doors, and likely to fail.

House Speaker Nancy Pelosi, D-Calif., blamed “failed Bush economic policies” for creating the current economic turmoil, and some Republicans said her speech may have alienated Republicans who might have voted for the bill.

After the vote, supporters talked briefly about immediately calling for another vote, but Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said the House should go with the regular order.

It was not clear at press time what steps, if any, the White House and congressional leaders were taking to pass the current asset repurchase measure, which was attached as an amendment to H.R. 3997, or to come up with a replacement proposal.

The Treasury Department says Treasury Secretary Henry Paulson “will be consulting with the president, the chairman of the Federal Reserve, and congressional leaders on next steps.”

Investors reacted to the failure of the EESA measure by selling stock.

The Dow Jones Industrial Average fell about 400 points when it became clear that the bill was losing, then jumped up about 300 points, then began to slide downward.

At the close of trading, the Dow Jones Industrial Average was down 6.98%, Nasdaq was down 9.14%, and the S&P 500 was down 8.72%.

The New York Stock Exchange Composite Index was down 8.66%.

The original version of H.R. 3997, the bill used as the vehicle for bringing the EESA proposal to the floor for a vote, would have created a tax break for members of the uniformed services, volunteer firefighters, and Peace Corps volunteers.

The EESA proposal that came up for a vote included a reference to non-qualified deferred compensation plans.

The authors of the original, 3-page Treasury Department EESA draft, posted Monday on the Web site of the National Association of Federal Credit Unions, Washington, did not mention retirement plans.

The authors of a revision posted Monday on the Web site of the House Financial Services Committee states that one purpose of the asset repurchase program would be to protect individual investors, including retirement plan investors.

stated that “nothing in this act prevents the Secretary from protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible retirement plan other than a plan described in section 409A of the Internal Revenue Code of 1986.”