Drama continues over vote on US finance rescue

October 3rd, 2008 - 9:38 am ICT by IANS  

Washington, Oct 3 (DPA) Congressional leaders were confident that the House of Representatives would accept a new version of the finance rescue plan approved by the Senate, but they were not certain when the vote would occur.Speaker of the House Nancy Pelosi, with Monday’s loud rebuff of an earlier version of the bill still ringing in her ears, said she would wait to bring the $700 billion package to a vote until she is sure of the votes.

“We’re not going to take a bill to the floor that doesn’t have the votes,” Pelosi told reporters Thursday.

With continued wrangling over details of the new version, the lower House is likely to at least discuss the issue when it resumes session Friday. The Senate adopted the legislation Wednesday night in a 74-25 vote.

Pressure grew through Thursday for swift action by the House as the three major stock indices slid more than 3.22 percent and the credit crunch grew tighter. The interbank lending rate, or Libor, climbed six basis points to 4.21 percent, the highest since Jan 11.

The US Chamber of Commerce spearheaded a lobbying effort by business leaders for passage of the rescue plan as the AARP (the American Association of Retired Persons) lead a similar effort among the large population of older Americans, many of whom have seen their retirement investment accounts pared back by the fall on Wall Street.

The Senate late Wednesday adopted the revised $700 billion rescue plan that was sweetened with a year-long increase in government-backed guarantees for bank deposits from $100,000 to $250,000, extensions of tax credits for renewable energy and small businesses and tax changes that will benefit the middle class.

The sweeteners were intended to gain support from resistant House Republicans who voted more than 2-to-1 against the bill’s earlier version. Pelosi believed that she could hang on to the 141 Democrats who supported the first version, but was not sure.

“Right now, we’re working very hard to see that. We want to see if we still have the 141 votes we had before. And that seems to be coming in pretty well,” she said.

An agitated President George W. Bush delivered his daily call for Congress to adopt the plan, meeting with business leaders at the White House who are hard-pressed to get credit and insisting that the country faced grave economic problems without it.

“The House of Representatives must listen to these voices and get this bill passed,” Bush said.

But some House Republicans were hearing other voices which objected to some of the add-ons intended to bring them on board.

The three-page bill submitted by the White House two weeks ago has grown to more than 450 pages, the New York Times reported, and it also includes non-finance-related items such as requiring health insurers to cover treatment of mental illnesses just as they pay for treatments of other diseases.

Representative Steven LaTourette of Ohio told reporters that he was encountering stiff resistance in a campaign to convince 20 Republicans who voted no on Monday to change to yes.

“The number $700 billion continues to be difficult,” he said. “It’s difficult because nobody can seem to explain why the secretary (US Treasury Secretary Henry Paulson) needs $700 billion.”

The group is proposing an amendment to the bill that would reduce the amount to $250 billion, based on Paulson’s estimate that he could spend about $50 billion a month buying up soured mortgage assets from troubled as well as healthy financial firms.

All last week, a flood of opposition from angry constituents warned against passage of the $700 billion plan for the government to buy up damaged mortgage assets, charging that it would only bail out Wall Street fat cats.

Senator Dianne Feinstein, a Democrat from California, said that 85,000 of the 95,000 messages she received were negative.

On Monday, the US House of Representatives stunningly rebuffed Bush and their own Democratic and Republican leaders by voting down the plan and sending the three major stock share indices plunging more than 6.98 percent.

In two days of harried negotiations, the US Senate came up with a sweetened plan that passed Wednesday night.

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