By ANDREW TAYLOR
WASHINGTON
President Bush's plan to rescue U.S. financial markets is headed for a Senate vote tonight after leaders there agreed to add tax breaks for businesses and the middle class and increase deposit insurance in an attempt to revive the legislation rejected by the House.
The surprise move by Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., appeared likely to win a big vote in the Senate that would put pressure on the House to go along and send the measure to the White House.
Democratic presidential nominee Barack Obama and his GOP rival, John McCain, planned to fly to Washington for the Senate vote, as did Democratic vice presidential nominee Joe Biden.
Adding a set of popular business tax breaks and legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax promised to win House GOP votes for the plan even as it angered moderate "Blue Dog" Democrats concerned about the tax cuts adding to the deficit.
House Speaker Nancy Pelosi, D-Calif., issued a statement that suggested she does not like the move but did not reveal her plans. Another House vote on the rescue plan could come by week's end.
"The Senate will vote tomorrow night and the Congress will work its will," Pelosi said Tuesday. The expected support of both Obama and McCain, however, makes it difficult for Pelosi to ship the measure back to the Senate with a different set of vote-getting add-ons.
The Senate legislation also will contain an increase in the government's $100,000 cap on insured bank deposits, part of a move by lawmakers, Bush and the two presidential candidates to try to reassure markets that the plan will pass this week.
The measure failed in the House on Monday in a stunning vote that shook the stock and credit markets. Though the Dow Jones industrials rebounded Tuesday, supporters of the administration's plan said passage by week's end still was a must.
The House vote was a stinging setback to leaders of both parties. The administration's proposal, still the heart of the legislation under consideration, would allow the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believe, that would help lift a major weight off the already sputtering national economy.
Bush renewed his efforts Tuesday, speaking with McCain and Obama and making another statement from the White House. "Congress must act," he declared.
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. All told, it would cost about $112 billion over five years.
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.
Earlier Tuesday, House Democratic leaders discussed adding an extension of unemployment benefits, while Republicans pressed to make it easier for financial institutions to hold questionable long-term assets. House Democratic Whip James Clyburn, D-S.C., floated the idea of boosting a recently passed property tax deduction for homeowners who don't itemize on their returns.
The Capitol was mostly quiet because of the Jewish new year, but there were plenty of behind-the-scenes talking and telephone conference calls on the bailout.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., emerged from one meeting to tell told reporters, "I'm told a number of people who voted 'no' yesterday are having serious second thoughts about it."
Reid and McConnell appeared in the early evening to enter into the Senate agreement on the floor. The idea took House Democratic leadership offices by surprise but it was unclear whether Pelosi was truly sandbagged. Aides to Reid and Pelosi clammed up when asked whether they were in synch on the Senate power play.
The move to temporarily raise the federal deposit insurance limit, now $100,000 per account, to $250,000 won bipartisan support. McCain and Obama both endorsed the change, as did the agency that runs the program.
Federal Deposit Insurance Corp. Chairwoman Sheila Bair said the move could help ease a crisis of confidence in the banking system.
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I know
What is funny is that lawyers have caused the majority of problems in this country. IF you could remove the unneeded litigation it would remove the basis for many of our other problems. Tort reform is needed more than ever. The current legal environment is literally killing our country and economy. So what are some suggesting? "Let's hire a lawyer to lead us." Decades from now when the obvious is realized I am sure all of the people who vote for them will try to doge blame w/ excuses such as "it's not my fault, they fooled us."
Pathetic.
um
"It is Ok to live out of your means and spend more than you will ever make, Because the goverment will cover any extra costs."
Isn't that exactly what Bush has been doing for the past 8 years that has given us the biggest defict we have ever seen?
It all started with the housing
and mortgage loans given to underquailifed individuals.
BARACK actually sued Citigroup in 1994 to cause the crunch wre having today.
Heres the Proof! OBAMA heres your sign!
www.clearinghouse.wustl.edu/chDocs/public/FH-IL-0011-9000.pdf
Saddest Day in American History
When your goverment ingnores you it is time to rise up. A post earlier mentioned that people are more worried about their 401k than freedom. When does the time come that we fight back and take back our goverment? Someone please tell me this. Are we just suppose to sit quietly by while our goverment is turning fascist? My granddad a WWII Veteran would be very dissapointed in me. I can not continue to hang my head in shame as this administration takes everything the previous generations have fought for. I can't take anymore lies and corruption. I am 25 years old and always said our generation will be rememberd for nothing. Here is our oppurtunity to do something meaningful that is bigger than ourselves. Money is not important if there is no justice and Freedom.
And you will be worse off
I notice no one seems to be seizing on the 'mental health' addition to the bill. The makes health insurance companies offer coverage in 'parity' w/ other health issues. The mental health hospitals have a policy to release those who cannot pay. This bill increased the amount they can charge and for how long.
Who would you say is going to pay for that? Isn't the health insurance expensive enough w/o junior being shipped off for behaivor problems which are translated as 'mental health issues' by a for profit hospital at our expense?
This hole is getting deeper by the minute.
Lipstick on a pig
Its still unConstitutional.
Its still lousy economics.
It still won't fix the problem, just delay the recconing until after the election.
The House should still say "no."
Rescue the Pershing...
...is the option. Again, the House Democrats need removing as they promised so much when they took the HOUSE over. What have they done? America WAKE UP...you know something needs to be done and done now. Whatever you preference doesn't make any difference or your age. Let's move on living peacefully together and thank the American soldiers all over the world for that peace. GOD BLESS AMERICA!
what part of "NO" do our "representatives" do not understand????
So, they tried to shove this through in the House and now they've put some new words on the bailout bill and will give it much more hardy shove through the Senate.
Please call/email your senator TODAY (Jim Webb and John Warner) and tell them to vote NO to the biggest wealth/asset transfer scheme in the history of the world. They're taking money from the middle class (and poor) to give to the rich.
This is wrong, wrong, wrong and IF (heaven forbid) this bill does pass and our elected non-representatives do indeed "gift" a trillion bucks ($1,000,000,000,000) to the wealthy financiers, then our grandchildren will read about this historic event as the period of time when it all started to unravel.
Saddest Moment In American History
Well folks it seems Americans care more about thier 401K plans than freedom.
This rescus plan is a Fascist Financial move. The Federal goverment is determining which buisness shall prosper. Why are we covering bad bets.
Buisness and investments have risks ! It is not the goverment's responsibility to cover bets.
So my leaders are telling me this;
dispite overwhelming opposition from the public this plan is going ahead, just with more added pork and a different catch phrase.
It is Ok to live out of your means and spend more than you will ever make, Because the goverment will cover any extra costs. Oh wait that only applies to certain individuals.
Most buissnesses need to borrow money to make pay roll ? That is B.S.
That is a poorly run buisness that is set up to fail
The last 61 yrs of Patriots fighting Communism and Facism was for nothing. We are now adopting a Socialist Market. We beat them on the battle field but they beat us in our own greed.
Any Politician that votes for this needs to be removed from office.
Don't re-elect them ! They are ignoring the voters and only looking after thier own personal investments.
This is the saddest moment in American Hi
New Name, same garbage
I guess "Rescue" plan is the new lipstick on this pig. It isn't a "bailout", people, it's a rescue...feel better now?
This is political grandstanding at its best
This is extremely frustrating. The Senate now attaches a whole bunch of other critical provisions that need addressing to this poor excuse for a rescue plan in the hopes it can drum up enough support for the plan. It still does not address the core issues brought up in this forum and by many taxpayers (paraphrased)
•Rewrite the laws that that allowed unqualified people to qualify for loans.
•Rewrite the laws that allowed Fannie and Freddie to purchase junk loans.
•Add clauses to prosecute the companies that raped the system for their benefit.
•Rewrite the banking laws on how banks have to value their real estate assets.
•Allow asset values to find their true bottom vice throwing money at them and artificially propping their value