Senate Tries Its Hand At Passing Bailout Plan
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It's Morning Edition from NPR News. Good morning, I'm Steve Inskeep.
RENEE MONTAGNE, host:
And I'm Renee Montagne. Another day, another $700 billion bailout plan. The Senate votes this evening on legislation to rescue the nation's financial institutions. This bill will be somewhat different from the one the House rejected. It will include some popular tax breaks which could make it more appealing to Republicans in the House, though not so much to Democrats. NPR's Brian Naylor reports.
BRIAN NAYLOR: The Jewish new year has provided lawmakers of all persuasions an opportunity to take a deep, cleansing breath after Monday's tumult which saw the financial bailout plan stunningly collapse amidst angry accusations and partisan finger pointing. Unlike the House, the Senate was in session yesterday, and senators spoke in measured tones about the need for calm and second thoughts. Senate Banking Committee Chairman Christopher Dodd, one of the lead negotiators of the bailout, said things were moving in the right direction.
Senator CHRISTOPHER DODD (Democrat, Connecticut; Chairman, Senate Banking Committee): The last thing we need is to have this not work again. We better decide whether or not we're serious about this. This is a difficult vote - I wouldn't suggest otherwise - but an important one. And I know that those who cast votes yesterday are having some second thoughts about the condition they placed us in and are trying to find a way in which to get back on track again.
NAYLOR: Late yesterday, Senate leaders announced a plan they think will get the bailout back on track. It calls for a vote this evening on a modified version of the original plan. The basic concept behind the measure remains the same as the bill rejected Monday, providing $700 billion to Wall Street to buy troubled securities. But leaders tweaked the bill in order to gain more support. One likely addition, a provision to increase the size of accounts that can be insured by the Federal Deposit Insurance Corporation from 100,000 to 250,000 dollars. That move has the support of both John McCain and Barack Obama, who along with Joe Biden say they'll return to Washington for the vote. Lawmakers suggested other changes yesterday to win more votes in the House. Ohio Democrat Marcy Kaptur voted against the bailout Monday. She says any plan that gets her support will not reward Wall Street's mistakes.
Representative MARCY KAPTUR (Democrat, Ohio): I think that the proposals we are offering are much more market-oriented. And they will bring the kind of discipline - I like to call it good mid-Western values of prudence and responsibility - back to the markets. Those that were not responsible will have to pay a price. But also those who have been prudent will not have to pay for their mistakes.
NAYLOR: Meanwhile, unlike their counterparts in the House who were hostile to the bailout, Republicans in the Senate generally backed the proposal that died Monday and say it's time to fix the problem and stop pointing fingers. Republican Lamar Alexander of Tennessee likened the situation in the financial markets to a pileup on the freeway.
Senator LAMAR ALEXANDER (Republican, Tennessee): Well that's kind of what we're doing today in the United States Congress, we are just standing around looking at the wreck when somebody ought to be moving the wreck off the highway so that economic traffic can proceed.
NAYLOR: Republican Senator Christopher Bond of Missouri said the residents of his state are worried about their children's future and their financial security.
Senator CHRISTOPHER BOND (Republican, Missouri): There's a lot anger, frustration and disgust, and that's why we've gotten to this point. I've heard those feelings loud and clear. I share those feelings. As I said before, frankly, I don't want to be here, not as a senator, not as a Missourian or American, or a family member. But I believe this is something that we have to do. We have no choice but to act.
NAYLOR: The Senate will act this evening. The bill it takes up will need 60 votes to pass, but that scene is likely as it has the support of the Democratic and Republican leaders. The real problem remains in the House. The tax credits the Senate plans to attach to the measure are not offset with spending cuts or other tax increases, so they'll add to the deficit. Because of that, conservative Blue Dog Democrats have opposed the bill in the past. Whether they'll swallow their objections now with the bailout on the line remains the key question. Brian Naylor, NPR News. Transcript provided by NPR, Copyright NPR.
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