Bailout nears final passage

[Ron Burgundy]

Treasury’s $700 billion rescue plan for the financial markets neared final passage in Congress Friday, with House leaders increasingly confident that they have found the votes to reverse Monday’s dramatic defeat.

Caution was still the rule given the still skittish political landscape and anti-Wall Street sentiment. But proponents prevailed 223-205 on an early procedural motion, and after morning meetings, both parties predicted they will increase their numbers by winning back dozens of “no” votes from four days ago.

“On Monday I cast a blue collar vote for the American people, shook the foundations of Wall Street, demanding more accountability,” said Rep. Zach Wamp (R., Tenn.) in opening debate. “But today I’m going to cast a red-white-and-blue collar vote, with my hand over my heart for this country because things are really bad and we don’t have any choice.”

Rep. John Lewis (D., Ga.), a second “no” vote Monday, quickly followed in announcing his support, and after taking a sometimes “hands-off” approach Monday, Democrats are showing a new determination to get the job done. “She’s not going home without a bill,” Rep. John Larson (D., Conn.) told Politico, pointing toward Speaker Nancy Pelosi’s office. And behind-the-scenes Democratic presidential candidate, Barack Obama, has played a greater role, calling individual members, such as Rep. Elijah Cummings (D., Md.), who Friday announced he will now support the bill.

The House debate caps a remarkable two week march since Treasury Secy. Henry Paulson first outlined the administration’s plan to launch a massive government intervention to try to address the credit crisis threatening the larger U.S. economy. Just a month before the November elections, lawmakers found themselves suddenly thrust onto a world stage, as investors at home and abroad watched them cope with the shock of Paulson’s extraordinary three-page request giving him almost unchecked authority to buy up to $700 billion in mortgage related assets—a dollar number that rivals all the appropriations bills thus far for the Iraq war.

In late night Capitol negotiations last weekend, the administration agreed to substantial changes, imposing greater oversight on Treasury and giving a future Congress the power to potentially deny any funding beyond the first $350 billion of the Paulson plan. Taxpayers were assured a change to gain some equity interest in the companies benefiting from the government aid, and new restrictions imposed on executive pay and severance packages for those firms which sell more than $300 million in securities to the government.

Despite these changes, the initial request had triggered such a popular backlash that proponents found themselves overwhelmed in the House Monday. Just 65 Republicans backed the measure despite appeals from President Bush, and while Democrats delivered 140 votes, the 205 total was 12 short of the majority needed.

It was left to the Senate then to resurrect the package, and in further talks Tuesday, revisions were made to add popular tax cuts as well as a temporary increase to $250,000 –up from $100,000 today—for the level of bank deposits protected by the Federal Deposit Insurance Corp.

Rural schools, important to many Republicans from Western states, would benefit from $3.3 billion in assistance over the next five years. And much as conservatives ridiculed some of the targeted tax breaks for special interests like the rum industry, the great bulk of the money would go to extend popular deductions already enjoyed by many middle class taxpayers.

Senate passage came Wednesday on a 74-25 vote with Republicans backing the measure by a 2-1 margin. No one expects such strong support in the House Friday, but Republican leaders appeared certain of having at least 76 votes—a gain of 11—and hoped to top 80 to 85 finally.

“Momentum is growing,” said Rep. Charles Pickering (R., Miss.) after a party meeting Friday morning.

source: Politico - http://news.yahoo.com/s/politico/20081003/pl_politico/14250 [link]