The House has rejected the measure 228 (95 Dems, 133 Reps)-205 (140 Dems, 65 Reps).  The market is responding very dramatically.

P.S.  The vote is still open, so the result might change later today.

Update: Rasmussen released poll results today showing that support for the bill had edged up from 24% to 33%, and opposition dropped considerably from 51% to 32%.  That suggests that non-stop fearmongering can drive public opinion pretty easily, which means that the pro-bailout forces might have been able to turn more people around if they had taken more time.  Ironically, had there not been such urgency on the part of pro-bailout folks the bill might very well have passed at a later time.  The fearmongering was working to weaken opposition, even though just as many people were moving into the undecided column as were coming around to support the bailout.  What these numbers fail to reflect is the sheer intensity on the anti-bailout side, which makes the higher levels of support for the bailout less significant.  In this, what has happened today is very much like the immigration revolt: supporters of the “comprehensive” bill were convinced that they had to pass something, the establishment was fully behind it but had no stomach for a real fight, and the opponents–backed by a grassroots revolt–were extremely motivated.  All of the emotional and rhetorical power was on the side of the opponents, while supporters appealed to necessity.  In both cases, the opponents were also right in rejecting the legislation.  Whenever genuine populism appears on the scene–not the phony, blow-dried kind on display at the Republican convention–it often ends up having a better track record than the consensus of the serious people in Washington. 

Viewed simply as a tactical matter, the administration could not have handled this more poorly had they set out to sabotage their own plan.  First, Paulson’s proposal overreached so much that there was no chance Congress would have accepted it as it was, and then Congress was told that it had no choice.  Never tell people that they don’t have a choice, because they will remind you that they do have one even if it means doing things that you think are crazy.  Instead of making any attempt to persuade members of the merits of the plan, supporters gave up on that out of early recognition that it didn’t have any and resorted to bludgeoning opponents with the blunt instrument of fear.  People also respond poorly to this kind of bullying.  Add in some of the Democratic leadership’s holier-than-thou attitude, the GOP leadership’s half-hearted endorsement and McCain’s absurd theatrics, and you have one of the most impressive displays of establishment ineptitude that I can recall.