In a preliminary vote held Monday afternoon, the House of Representative voted down the $700 billion Wall Street bailout plan by a vote of 208-225, despite President George Bush's pledge that the plan would "prevent economic damage."

More than two-thirds of House Democrats voted for the bailout, while half of House Republicans voted against the plan. Many legislators say they were influenced by their constituents' reluctance to endorse the use of taxpayers' money to aid Wall Street businesses.

House party leaders froze the vote with one absenting vote remaining, in order to convince representatives to sway their votes. But only two "nay" voters switched sides.

Congress will not resume deliberations until Thursday because of the Rosh Hashanah holiday.

Shortly before 5 p.m., Treasury Secretary Henry Paulson announced that despite his disappointment in the Congressional vote, there was no need for financial panic.

"Our bank system us holding up well, considering the pressures," said Paulson.

Bush, who reportedly called a list of lawmakers before the vote to try to earn their support, also expressed his disappointment and met late Monday afternoon with his White House staff to discuss the next plan.

Ohio Representative John Boehner and Minority Whip Roy Blunt led a GOP press conference within an hour of the first vote and said Congress needs another bipartisan effort to pass the bill.

"Americans are angry and so are my colleagues," said Boehner. "We've put everything we've had into getting the votes to get there today. But [House] Speaker [Nancy Pelosi] had to give a partisan voice that poisoned our conference, caused a number of members that we thought we could get, to go south."

Blunt also blamed the media for stressing the dissenting Republican vote, when a sizable portion of Democrats had also voted against the plan.

House Democrats responded in their own press conference that they had also been hoping for a timely bipartisan solution.

"Give me those 12 names [of objecting Republicans] and I will talk uncharacteristically nice to them," said Massachusetts Representative Barney Frank, who noted that the number of Republicans against the bill is the same portion as the votes needed to pass the votes.

"We have come together on a bill to alleviate the crisis and because somebody hurt their feelings, they decided to punish the country," continued Frank.

Meanwhile, panic selling in the stock market caused the Dow Jones to plunge up to 700 points during the House's first vote.

After 10 days of negotiations, congressional leaders hammered out a compromise bill that supporters say is greatly strengthened with protections for taxpayers.

Originally designed to allow the Treasury Department to buy up bad mortgage debts, the legislation now allows the government to buy up any kind of asset officials think will promote market stability.

About $250 billion will be immediately available for buying assets and another $100 billion would be available at the president’s discretion. Congress would have to approve the spending of the remaining $350 billion.

As part of the deal, the Bush administration agreed to accept limits on so-called “golden parachutes” for executives as well as strict oversight.

Taxpayers will also get a stake in some of the companies that are bailed out so they can get a share of potential profits.

If the government is taking losses after five years, the treasury will begin taxing firms that took the bailout to help recoup losses.

Speaking at The White House this morning, Bush said the bill is needed to keep the economy from falling apart.

He acknowledged the expense to taxpayers but said the cost is necessary to prevent further losses, and that legislators must pass the plan in order to help the economy regain its footing.

"I fully understand that this will be a difficult vote. But with the improvements made to this bill, I'm confident that members of both parties will support it,” said Bush. “Congress can send a strong signal to markets at home and abroad by passing this bill promptly. Every member of Congress and every American should keep in mind: a vote for this bill is a vote to prevent economic damage to you and your community.”

The Senate is expected to vote on the plan on Wednesday.