Senate to vote on bailout bill Wednesday night
WASHINGTON - In a surprise move to resurrect President Bush’s $700 billion Wall Street rescue plan, Senate leaders slated a vote on the measure for Wednesday — but added a tax cut plan already rejected by the House.
Majority Leader Harry Reid, D-Nev., and GOP Leader Mitch McConnell of Kentucky unveiled the plan Tuesday. The Senate plan would also raise federal deposit insurance limits to $250,000 from $100,000, as called for by the two presidential nominees only hours earlier.
The move to add a tax legislation — including a set of popular business tax breaks — risked a backlash from House Democrats insisting they be paid for with tax increases elsewhere.
But by also adding legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax, the step could build momentum for the Wall Street bailout from House Republicans. The presidential candidates Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., intend to fly to Washington for the votes, as does Sen. Joe Biden of Delaware, the Democratic vice presidential candidate.
The surprise move capped a day in which supporters of the imperiled multibillion-dollar economic rescue fought to bring it back to life, courting reluctant lawmakers with a variety of other sweeteners including the plan to reassure Americans their bank deposits are safe.
Wall Street, at least, regained hope. The Dow Jones industrials rose 485 points, one day after a record 778-point plunge following rejection in the U.S. House of the plan worked out by congressional leaders and the Bush administration.
Before Reid and McConnell’s move, lawmakers, President Bush and the two rivals to succeed him all rummaged through ideas new and old, desperately seeking to change a dozen House members’ votes and pass the $700 billion plan.
The tax plan passed the Senate last week, on a 93-2 vote. It included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewable energy incentives and extensions of expiring tax breaks. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.
That wasn’t enough for the House, which insisted that there be complete offsets for the energy and extension part of the package.
The Senate move seems aimed at jamming the House into accepting the deficit-financed tax cuts. Conservative Democrats won’t like the idea, but some Congress-watchers suspect most Democrats might be willing to go along.
Still, the House is where the problems are, and leaders there were scrounging for ideas that might appeal to a few of the 133 Republicans and 95 Democrats who rejected the proposal on Monday.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters, “I’m told a number of people who voted ’no’ yesterday are having serious second thoughts about it.” He added, however, “There’s no game plan that’s been decided.”
The idea drawing the biggest support was to raise the federal deposit insurance limit, now $100,000 per account, to $250,000. Several officials, along with both presidential nominees, endorsed the change.
So did the agency that runs the program.
Within hours of the candidates’ separate statements, Federal Deposit Insurance Corp. chairman Sheila Bair asked Congress for temporary authority to raise the limit by an unspecified amount. That could help ease a crisis of confidence in the banking system, Bair said.
She said the overwhelming majority of banks remain sound but an increase in the cap would help ease a crisis of confidence in the banking system as well as encourage banks to begin more lending.
or better yet......
It hasnt changed much, Congress will still reject it. Well they might, i think they will, if they said No before there is nothing in the amended Bill to change their minds.
Have a plan and stick to it