House Gets Another Try at Rescue Bill
By John Jessup
CBN News Washington Correspondent
October 2, 2008
CBNNews.com - WASHINGTON - The House of Representatives will get another chance to vote on a bill to rescue the financial system.
The Senate passed the revised bill last night, and some House members are already indicating they'll vote differently this time around.
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On Wednesday night, The White House praised the Senate for getting the bill through and wants the House to act quickly as well.
The bill now moves back to the House where supporters hope it will gain more traction after winning broad bipartisan support in the Senate -- by a vote of 74 to 25.
"This is not a Democratic bill. It is not a Republican bill. It is our bill," Senate Majority Leader Harry Reid said.
"This doesn't entirely solve the problem, but it moves us in the direction of moving the American economy where it needs to be very soon," Senate Minority Leader Mitch McConnell said.
The Senate vote sends a strong message -- that the rescue package is needed to help the economy, by authorizing the government to spend billions to buy bad mortgage debt, repackage it, and then resell it.
But, it's unclear what will happen when lawmakers take up the new bill in the House, where it was shot down Monday.
Critics worry that everyday Americans see the rescue plan as "Welfare for Wall Street" with little return for taxpayers.
So the Senate added tweaks aimed to appeal to the public as well as skeptics in the House.
The revised bill adds $100 billion in tax breaks for businesses and the middle class and temporarily increases the federal deposit insurance cap on savings from $100,000 to $250,000.
The new bill could bring relief to the banking system, freeing up cash on hand, which in turn would stimulate lending -- a necessary move to thaw out the squeeze on people caught in the middle of the credit freeze.
"There are people who should be able to get a loan and are safe risks for a car loan, but they're not able to get one because of what has happened," said Karl Brauner with Edmunds.com
Consumer financing and tightening credit caused auto sales to drop below a million in September, a figure not seen in more than 15 years.
And it's not just car loans -- the credit problems are spreading throughout virtually all areas of the economy -- hitting both large and small businesses as well as consumers -- and even spreading to other countries.
"Banks are panicked. They don't have enough capital. They have to restrict lending because they just don't have that capital," said Mark Zandi with Moody's Economy.com.
Meanwhile, all eyes refocus on the House, where the bill will go up for a vote Friday.
"If I believe we don't have the votes on Friday, perhaps we'll wait until Saturday. And if we don't have them on Saturday, maybe we'll wait until Sunday," House Majority Leader Steny Hoyer said.
Some in Congress believe that the Dow's 777 point drop after the bill failed in the House Monday was enough to help convince some skeptics that action needs to be taken soon to stabilize the stock and the credit markets -- and help get loans flowing again.
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