Because of more insurance for people’s bank deposits
Tax breaks for businesses and the middle class
White House warns of the consequences of failure
WASHINGTON: Congressional leaders from both parties said they were hopeful that a $700-billion U.S. financial industry bailout that derailed in the House of Representatives is back on track for quick passage, thanks partly to a provision increasing insurance for people’s bank deposits. President George W. Bush planned to call lawmakers asking for their support ahead of a crucial Senate vote on Wednesday night.
“I think the Senate thinks it has the votes and I think it probably will pass,” said House Majority Leader Steny Hoyer, a Democrat. House Republican Whip Roy Blunt agreed that prospects for passage have improved, and he said he was particularly heartened by indications the legislation had become more appealing to constituents back home.
The plan for Wednesday night’s vote was set after leaders there agreed to add tax breaks for businesses and the middle class and increase deposit insurance to revive the legislation rejected by the House.
“No one is glad we have reached this critical point. ... Now is our time to work not as Democrats, not as Republicans, but as guardians of the public trust,” said Senator Harry Reid, Democratic majority leader. He said he was hopeful the measure could clear Congress within days “so that by this weekend rolling around, we will have done what we need to do for the American people.”
Republican Senator Mitch McConnell, minority leader, said, “We believe that we have crafted a way to go forward and to get us back on track.” The White House tried to build support by warning of the consequences of failure.
“This morning we’re seeing increased evidence of the credit squeeze on small businesses and municipalities all across the country, so it’s critically important that we approve legislation this week and limit further damage to our economy,” said a White House spokesman.
Central bankers and political leaders in Europe and Asia are anxiously waiting for the U.S. to come up with a solution that has evolved into a global financial crisis threatening their economies. Democratic presidential nominee Barack Obama and his Republican rival John McCain planned to fly to Washington for the Senate vote, as did Democratic vice-presidential nominee Joe Biden.
Scrambling to revive a package that met with bitter derision among constituents who viewed it as a giveaway to Wall Street, the Senate added a number of sweeteners designed to please rural lawmakers, including disaster aid for hurricane-battered states and money for rural schools.
There are concerns that moderate House Democrats known as “Blue Dogs” will be repulsed by the tax breaks, and could vote no because they have been saying they do not want to see the deficit run up even further.— AP