The Senate passed a revised $700 billion (£380 billion) rescue plan for the US economy last night and began persuading their colleagues in the House of Representatives to follow suit, as the world continued to wait for a settlement on the largest bail-out in history.
The bill’s passage by a majority of 74 to 25, with strong support from both parties, was eased by the addition of a bundle of “sweeteners”, including temporary tax breaks for business and the middle classes.
It will now go to the House, where first version of the emergency was defeated on Monday, and where its passage is far from certain. A vote will be taken on Friday at the earliest.
George W Bush, speaking from the White House, said the bill was “essential to the financial security of every American”.
“The American people expect – and our economy demands – that the House pass this good bill this week and send it to my desk,” he said.
Republicans who voted heavily against the first bill may be wooed by the tax cuts, worth $110 billion, though they have objected to the cost of the bail-out.
The new bill also included temporarily raising the limit on the size of bank deposit guaranteed by the government federal to $250,000 (£136,000) from $100,000 (£54,000), a move designed to calm nerves among the public and small business owners and prevent a run on banks.
In a coordinated change of presentation, Senate leaders and the presidential candidates Barack Obama and John McCain, who broke off campaigning to vote for the bill, conspicuously avoided calling the package a “bail-out”, aware that the term was toxic with the many voters.
Echoing a refrain heard throughout the day Harry Reid, the Senate majority leader, said the vote was a “victory for Main Street, not Wall Street”.
“Supporting this legislation is the only way to make the best of this crisis,” Mr Reid, a Nevada Democrat, said after the vote which was passed at 9.30pm in Washington.
A clearly relieved Mitch McConnell, the Republican leader in the Senate minority leader, said the vote showed the Senate "at its finest".
"In the years that I've been here I can't recall a single time where, in this close proximity to an election, both sides have risen above the temptation to engage in partisan game-playing, if you will, to address an issue of magnitude, great magnitude," he said.
Despite dire warnings of financial damage from the White House and the majority of economists, the bill faces a difficult time ahead in the House. Conservative Democrats in lower chamber already voted against the tax breaks when they were presented in a separate bill recently, objecting to failure to offset the loss in revenue elsewhere in the federal budget.
Steny Hoyer, the Democratic leader in the lower chamber, told MSNBC News that no Democrats who opposed the measure earlier this week have pledged to back it, and he was not aware that Republican support has increased either. "We don't have any more Democrats at this hour," he said shortly before the Senate vote.
Left-wing Democrats are angry there is not greater help for homeowners struggling with sub-prime mortgage loans.
Other representatives from either party may be afraid of voting against their constituents’ wishes so close to congressional elections, being held on Nov 4 along with the presidential vote.
Backers of the new bailout have grown in confidence after public reaction became more supportive following the record collapse in the Dow Jones industrial index after the first bill’s defeat.
The earlier version contained major changes from the three-page proposal originally submitted by Henry Paulson, the Treasury Secretary. The £380 billino will have to be spent in stages, subject to congressional approval, while the government will take over rescued companies if their loans are not paid back. Limited impositions on chief executive pay were also inserted.
0 comments:
Post a Comment