U.S. House rejects $700-bln Wall St bailout bill

WASHINGTON, Sept 29 (Reuters) - The U.S. House of Representatives on Monday rejected by a vote of 228-205 a Wall Street bailout bill that would have authorized the Treasury Department to spend up to $700 billion to purchase broken mortgage-backed bonds from banks with the goal of jump-starting stalled capital markets.

Defeated by skeptics from both parties who questioned the need for it and whether it would work, the bailout plan was proposed by the Bush administration on Sept. 20. Congress modified it in just days amid warnings from the White House that urgent action was needed to prevent economic disaster. (Reporting by Kevin Drawbaugh and Patrick Rucker; Editing by Phil Berlowitz)