Bailout with ‘sweeteners’ heads toward Senate win
WASHINGTON – After one spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, speeding toward passage in the Senate and gaining ground in the House where conservative opposition seemed to soften.
Senators loaded the economic rescue bill with tax breaks and other sweeteners for the right and left, hoping to secure approval in the House by Friday, just days after lawmakers there stunningly rejected an earlier version and sent markets plunging around the globe.
The measure has not caused the same uproar in the Senate, where both parties’ presidential candidates, Republican John McCain and Democrat Barack Obama, were making rare appearances to vote their support. That would send the package back to the House, where passage would require a turnaround of 12 votes from Monday’s 228-205 defeat.
Leaders in both parties, as well as private economic chiefs everywhere, said Congress must quickly approve some version of the measure to start loans flowing and stave off a potential national economic disaster.
“This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe,” Obama said on the Senate floor. In Missouri, before flying to Washington, McCain said, “If we fail to act, the gears of our economy will grind to a halt.” At the White House, President Bush said, “It’s very important for members to take this bill very seriously.”
Even as the Senate neared its vote, congressional leaders targeted the 133 House Republicans who voted against the bill Monday. House GOP opposition appeared to be easing after the Senate added $100 billion in tax breaks for businesses and the middle class, plus a provision to raise, from $100,000 to $250,000, the cap on federal deposit insurance. They were also cheering a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market.
The heart of the bill, and the opposition to it, remained the same. It would enable the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and keep the economy from a deep recession.