Confidence grows that bailout will be passed
Related Articles
CONGRESSIONAL leaders were growing in confidence last night that the $700bn plan to prop up the US economy will finally be passed when it comes before the House of Representatives today.
After a revised plan was passed by the Senate late on Wednesday by a majority of three to one, pressure grew on their colleagues in the other chamber not to repeat their rejection of the first Bill on Monday, a vote which wiped $1.2 trillion off share values in a day.
Though many Americans still resent the principle of bailing out Wall Street firms who created the financial mess, they are beginning to accept its necessity amid the fall in stock prices and visible tightening of credit.
Congressional aides said yesterday that phone calls from constituents alarmed at the prospect of a deal not being done were now equal in number to those against. Barney Frank, the Democratic chairman of the financial services committee, said: "It's still uncertain. I think it is likelier to pass than before.
"The main change is reality. I think that it's not possible now to scoff at the predictions of doom if we don't do anything."
President George W Bush issued what has become a daily plea to pass the legislation, saying that Congress "must listen" to ordinary people worried about jobs and credit.
He said: "People aren't lending money from bank to bank or they're not lending money to our medium and small-sized businesses. And that means people's jobs are in jeopardy."
A variety of "sweeteners" added to the bill by the Senate was helping win over Republicans who voted against the first bill by two to one.
These included an increase in the amount the government will guarantee in bank deposits, and extended tax breaks.
The release of more bad news from the car industry yesterday is thought to have increased the chances of the bill being passed.
Sales of vehicles plunged 27pc last month, the lowest level since February 1993, according to data from Autodata Corp.
Troubled
Members of the US Congress "must listen" and pass the package which will restore confidence in the nation's troubled economy, Mr Bush said after a White House meeting on the crisis.
"The bill that's before the House of Representatives tomorrow is a bill that has got the best chance of providing liquidity, providing credit, providing money so small businesses and medium-sized businesses can function," he said.
"This issue has gone way beyond New York and Wall Street. This is an issue that's affecting hardworking people. They're worried about their savings, they're worried about their jobs, they're worried about their houses, they're worried about their small businesses.
"And the House of Representatives must listen to these voices and get this bill passed so we can get about the business of restoring confidence.''
The House will get a second chance to vote on the amended proposals tomorrow before the bill can be sent to the president to be signed into law.
But the bill, seen by many Americans as a $700bn bail-out of Wall Street, is still expected to meet tough opposition in the House.
It was House Republicans who were seen as the biggest obstacle to getting the bill passed on Monday, with 133 Republicans and 95 Democrats refusing to back the rescue package.
They seemed to be pleased by the Senate amendments, but some conservative House Democrats, known as 'Blue Dogs', will be repulsed by the inclusion of tax breaks and could vote 'No' because they do not want to see the country's deficit run up even further.
David Dreier, a House Republican representing California said he would vote for the bill, but added: "I will tell you, the American people are angry and frustrated."
Marcy Kaptur, a House Democrat representing Ohio, added that she planned to vote 'No' and said: "I will not support this legislation because it's the wrong medicine."
Steny Hoyer, the House Democratic majority leader, admitted he was "concerned" about the possible opposition from the 'Blue Dogs'.
A second House vote is unlikely to be taken unless US political leaders are sure the bill has the support of its members. (© Daily Telegraph, London)
- Alex Spillius in Washington
