Will Senate bailout bill turn the tide?

Senate Majority Leader Harry Reid
REUTERS/Kevin Lamarque
Senate Majority Leader Harry Reid speaking to reporters in the Capitol after last night’s vote on the economic rescue package.

The Senate’s overwhelming endorsement – 74 to 25 – of the $700 billion rescue for Wall Street last night puts pressure on the House to approve the plan that supporters say would avert a potential economic disaster.

The San Francisco Chronicle noted that the vote united some of the Senate’s most liberal Democrats and conservative Republicans. Presidential candidates Barack Obama and John McCain both voted for the bill, as did Minnesota’s Norm Coleman, a Republican, and Democrat Amy Klobuchar.

The House rejected, 228 to 205, a similar proposal Monday. In an effort to entice reluctant House members to reverse themselves and vote for the package, the Senate tied the bailout plan to other popular measures, including increasing federal deposit insurance limits, expanding mental-health coverage and extending several tax breaks set to expire at year’s end.

A plunge in the stock markets following the House vote, “compounded by opinion polls suggesting the public is more confused by the plan than opposed to it, led the Senate to add provisions in the hopes of attracting enough votes to pass both chambers this week,” according to the Baltimore Sun.

But will that strategy work when the House takes up the measure, perhaps as early as Friday?

The Chicago Sun-Times says “there were worries that the tax breaks would cause some conservative-leaning Democrats who voted for the rescue Monday to abandon it because it would swell the federal deficit.”

David Rogers, writing in Politico, also warns: “After Monday’s loss in the House, caution is still the watchword in what remains a ticklish political situation.”

But Rogers adds that the Bush administration, which has pushed the plan, was “elated to have topped 70 votes in the Senate, more than most had expected. And this also gives the White House a base from which to work before the House revisits the issue Friday.”

The Los Angeles Times counts House Minority Leader John Boehner, R-Ohio, among congressional leaders who think the package approved by the Senate had a “much better chance” of passing the House than the measure that was defeated Monday. But he said he was “not taking anything for granted.”

And the Wall Street Journal points out that even if Democrats hold their votes in the House, Republicans will have to find extra support: “The House bill failed Monday on a 228-205 vote: 140 Democrats backed it, representing 60% of the Democratic caucus; Republicans brought 65 votes to bill, about a third of the party’s ranks.”

Supporters of the plan are nonetheless optimistic that some House members will change their minds.

And there are signs that that’s going on: Rep. Jim Ramstad, a retiring Republican from Minnesota who voted against the measure Monday, told the New York Times and others that he now supports the new legislation.

“The inclusion of [mental health] parity, tax extenders and the F.D.I.C. increases has caused me to reconsider my position,” said Ramstad, who has long pushed for parity legislation.  “All three additions have greatly improved the bill.”

These and other developments over the past 24 hours have prompted Roll Call to declare: “House Leaders Bullish on Vote.”

Roger Buoen, a MinnPost managing editor, can be reached at rbuoen [at] minnpost [dot] com.

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Comments (4)

  1. Submitted by Bill Mahar on 10/02/2008 - 12:03 pm.

    This bill was written to bail the bad debt on Wall Street. We are forgoing the natural economic process, bank fails, some losses are absorbed by stocks, assets sold, and Federal Government takes portfolio and sells it, depositors insured. Now the US government is going to prepay bad debt at full absorbing all of the loss that has been generated by fiscally irresponsible banks.

    Hard working Americans have been punished enough by this administration. We are faced with a higher cost of living, high energy prices, our jobs have been exported and now we are going to face a $110 billion deficit.

    The rich will be fine, what about the working class? Will this be our future; Take a look at this http://www.BuyMyHouseBeforeTheBankTakesIt.com

    Our economy is just as important as our national security. Its time that we address our economic policy, encourage domestic production, discourage outsourcing, and work together to fix America?

  2. Submitted by Bernice Vetsch on 10/02/2008 - 01:07 pm.

    I’m waiting for a sharp journalist to ask the Senate Banking Committee why it seems NOT to have talked to any of the many economists who have put forth alternative plans to solve this problem. For example, some note that it can be done by purchasing equity in order to increase capital in any lender who needs it. We do NOT have to buy up their bad debts.

    It’s not too late for the House Committee to draft a new bill on which to vote tomorrow or Monday.

  3. Submitted by Susan Lesch on 10/03/2008 - 12:38 am.

    U.S. Representatives Brian Bilbray of California and Keith Ellison of Minnesota, because I live in two states, and House Speaker Nancy Pelosi received my request to oppose the bank bailout on Friday. Were two campaigns for office used to secure the Senate vote?

    Sure looked like it to me–one was John McCain and one was Barack Obama. I think some folks realize that and may have something to say about it sooner rather than later–maybe to the sharp journalist mentioned above and with luck before the House votes.

  4. Anonymous Submitted by Anonymous on 10/05/2008 - 03:30 pm.

    The Washington Times Knave of the Week – Harry Reid

    During this week’s debate on the $700 billion-plus bailout bill, there was no shortage of sky-is-falling hyperbole from proponents. But no lawmaker this week behaved as shamefully as Mr. Reid, who resorted to fabricating stories about the failure of a large health insurer. On Wednesday, the majority leader said the bailout was essential because there is “a major insurance company – one with a name that everyone knows – that’s on the verge of going bankrupt.” On Thursday, shares of Hartford Financial Services Group Inc., Prudential Financial Inc. and MetLife.Inc. all plummeted by double-digit percentages in response to Mr. Reid’s assertion.

    The problem was that Mr. Reid just made the story up: On Thursday his office released a statement admitting that he was “not personally aware of any particular company being on the verge of bankruptcy.” For telling falsehoods in order to advance his political agenda, Harry Reid is the Knave of the Week.

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