Bailout Bill Picks Up Steam
President invested $2.4 billion in program promising big milestone, but only 300,000 cars have made. / CBS News
After one spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, speeding toward passage in the Senate and gaining ground in the House where conservative opposition seemed to soften.
Bipartisan supporters rallied around a unity theme - a stark contrast to the political bickering that marked Monday's shocking House defeat, reports CBS News correspondent Bob Orr.
Senators loaded the economic rescue bill with tax breaks and other sweeteners for the right and left, hoping to secure approval in the House by Friday.
The measure has not caused the same uproar in the Senate, where both parties' presidential candidates, Republican John McCain and Democrat Barack Obama, were making rare appearances to vote their support. That would send the package back to the House, where passage would require a turnaround of 12 votes from Monday's 228-205 defeat.
Leaders in both parties, as well as private economic chiefs everywhere, said Congress must quickly approve some version of the measure to start loans flowing and stave off a potential national economic disaster.
"This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe," Obama said. "To Democrats and Republicans who've opposed this plan, I say: 'Step up to the plate. Let's do what's right for the country at this time, because the time to act is now."'
At the White House, President Bush said, "It's very important for members to take this bill very seriously."
Even as the Senate neared its vote, congressional leaders targeted the 133 House Republicans who voted against the bill Monday.
House GOP opposition appeared to be easing after the Senate added $100 billion in tax breaks for businesses and the middle class, plus a provision Republicans advocated to raise, from $100,000 to $250,000, the cap on federal deposit insurance. They were also cheering a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market.
The heart of the bill, and the opposition to it, remained the same. It would enable the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and keep the economy from a deep recession.
Proponents say the government eventually could sell the devalued assets at a better price, reducing the program's final cost.
As for House passage, there were worries that the tax breaks would cause some conservative-leaning Democrats who voted for the rescue Monday to abandon it because it would swell the federal deficit.
"I'm concerned about that," said Rep. Steny H. Hoyer, D-Md., the majority leader.
A CBS News poll showed that while the vast majority of Americans feel the financial crisis is a national problem, voters remain split on whether the bailout is the right solution.
As revised by the Senate, the package would extend several tax breaks popular with businesses. It would keep the alternative minimum tax from hitting 20 million middle-income Americans, and provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.
The bill would not point to offsetting spending cuts to pay for the AMT and disaster provisions, but it would have revenue offsets for part of the energy and extension measures. The failure to offset many of the tax cuts angered the House's band of "Blue Dog" Democrats.
The increase in the deposit insurance cap was a bid to reassure individuals and businesses with accounts in banks and similar institutions.
The Senate specializes in high-stakes legislating-by-enticement, and the long list of sweeteners it added was designed to attract votes from various constituencies.
Tax cuts new and old are favorites for most House Republicans, the main target of intense lobbying to gain support for the measure. Help for rural schools was aimed mainly at lawmakers in the West, while disaster aid was a top priority for lawmakers from across the Midwest and South.
Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others.
And there were plenty of obscure tax breaks to go around, like one for certain wooden arrows used by children, and another benefiting litigants in the 1989 Exxon Valdez oil spill.
Senate leaders were expected to try adding another goodie before the final vote: extending a tax break for homeowners who do not itemize their tax returns.
Raising the federal deposit insurance limit - along with the SEC's decision to ease accounting rules on valuing assets - helped House Republicans claim credit for some substantive changes.
And with constituent feedback changing dramatically since Monday's shocking House defeat and the corresponding market plunge, lawmakers' comfort level with the package increased markedly.
Rep. John Shadegg of Arizona, a leading conservative who voted no on Monday, told CNN Wednesday he's "strongly leaning" toward voting for the plan.
Asked if was ready to switch from no to yes, Rep. Steve LaTourette, R-Ohio, said: "Not yet, but it's getting there."
Sen. John Thune, R-S.D., said Republicans "can argue now that there have been some steps taken that they recommended."
The aftermath of Monday's vote, he said, has "changed the complexion, too, of what people's constituents are now saying. ... There's more of a recognition that we have to do something."
Besides Obama and McCain, Democratic vice presidential nominee Joe Biden was voting on the Senate bill.
Other provisions added by the Senate include a measure to require large companies' health plans to give equal treatment to mental health or addiction if they cover such illnesses. The House and Senate have passed similar "mental health parity" measures, but none has gone to Bush for his signature.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. Bipartisan supporters rallied around a unity theme - a stark contrast to the political bickering that marked Monday's shocking House defeat, reports CBS News correspondent Bob Orr.
Senators loaded the economic rescue bill with tax breaks and other sweeteners for the right and left, hoping to secure approval in the House by Friday.
The measure has not caused the same uproar in the Senate, where both parties' presidential candidates, Republican John McCain and Democrat Barack Obama, were making rare appearances to vote their support. That would send the package back to the House, where passage would require a turnaround of 12 votes from Monday's 228-205 defeat.
Leaders in both parties, as well as private economic chiefs everywhere, said Congress must quickly approve some version of the measure to start loans flowing and stave off a potential national economic disaster.
"This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe," Obama said. "To Democrats and Republicans who've opposed this plan, I say: 'Step up to the plate. Let's do what's right for the country at this time, because the time to act is now."'
At the White House, President Bush said, "It's very important for members to take this bill very seriously."
Even as the Senate neared its vote, congressional leaders targeted the 133 House Republicans who voted against the bill Monday.
House GOP opposition appeared to be easing after the Senate added $100 billion in tax breaks for businesses and the middle class, plus a provision Republicans advocated to raise, from $100,000 to $250,000, the cap on federal deposit insurance. They were also cheering a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market.
The heart of the bill, and the opposition to it, remained the same. It would enable the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and keep the economy from a deep recession.
Proponents say the government eventually could sell the devalued assets at a better price, reducing the program's final cost.
As for House passage, there were worries that the tax breaks would cause some conservative-leaning Democrats who voted for the rescue Monday to abandon it because it would swell the federal deficit.
"I'm concerned about that," said Rep. Steny H. Hoyer, D-Md., the majority leader.
A CBS News poll showed that while the vast majority of Americans feel the financial crisis is a national problem, voters remain split on whether the bailout is the right solution.
As revised by the Senate, the package would extend several tax breaks popular with businesses. It would keep the alternative minimum tax from hitting 20 million middle-income Americans, and provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.
The bill would not point to offsetting spending cuts to pay for the AMT and disaster provisions, but it would have revenue offsets for part of the energy and extension measures. The failure to offset many of the tax cuts angered the House's band of "Blue Dog" Democrats.
The increase in the deposit insurance cap was a bid to reassure individuals and businesses with accounts in banks and similar institutions.
The Senate specializes in high-stakes legislating-by-enticement, and the long list of sweeteners it added was designed to attract votes from various constituencies.
Tax cuts new and old are favorites for most House Republicans, the main target of intense lobbying to gain support for the measure. Help for rural schools was aimed mainly at lawmakers in the West, while disaster aid was a top priority for lawmakers from across the Midwest and South.
Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others.
And there were plenty of obscure tax breaks to go around, like one for certain wooden arrows used by children, and another benefiting litigants in the 1989 Exxon Valdez oil spill.
Senate leaders were expected to try adding another goodie before the final vote: extending a tax break for homeowners who do not itemize their tax returns.
Raising the federal deposit insurance limit - along with the SEC's decision to ease accounting rules on valuing assets - helped House Republicans claim credit for some substantive changes.
And with constituent feedback changing dramatically since Monday's shocking House defeat and the corresponding market plunge, lawmakers' comfort level with the package increased markedly.
Rep. John Shadegg of Arizona, a leading conservative who voted no on Monday, told CNN Wednesday he's "strongly leaning" toward voting for the plan.
Asked if was ready to switch from no to yes, Rep. Steve LaTourette, R-Ohio, said: "Not yet, but it's getting there."
Sen. John Thune, R-S.D., said Republicans "can argue now that there have been some steps taken that they recommended."
The aftermath of Monday's vote, he said, has "changed the complexion, too, of what people's constituents are now saying. ... There's more of a recognition that we have to do something."
Besides Obama and McCain, Democratic vice presidential nominee Joe Biden was voting on the Senate bill.
Other provisions added by the Senate include a measure to require large companies' health plans to give equal treatment to mental health or addiction if they cover such illnesses. The House and Senate have passed similar "mental health parity" measures, but none has gone to Bush for his signature.
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I think the bail out money would be better spent and much less costly if it were given to the American people. If each tax paying citizen was given $400,000 dollars it would turn our economy around instantly. It would cost much less than 700 billion! Half would be paid back to the government right away in income taxes. Then each person would be left with $200,000 to pay down debts, pay there past due mortgages and stop the foreclosures at once. They would spend on goods and services or invest in new business which would create new jobs and more taxable income. The companies they are considering bailing out should be go bankrupt as they have already mismanaged themselves and who is to say they won''t do it again! New banks or private investors would start up and purchase these assets and hold them while the markets correct themselves If there are 350 million people in America there may be 200 million taxpayers at $400,000 this idea would cost less than 100 million! In addition the current bail out plan may free up lending money but who will be there who can afford these loans? It won''t solve the problem for the people as most are loosing their jobs or having trouble with too many debts and facing foreclosure. Who is in a position to sign up for these loans not many at the moment. Please present this idea to everyone who can influence and prevent this bail out plan and implement this plan.
Posted by ubrew12 at 09:22 PM : Oct 01, 2008
So how come it wasn''t developed and put into operation during the Clinton years - when we had the money to do it, and when Enron was scamming off California''s energy shortage?
Oops. I just answered my own question, didn''t I.
I''ll check it out. Little known fact: the only wave energy convertor in America worth the name was funded by the military. That''s the ONLY way research gets funded in America, through the military. That''s why the premier wave energy converters around the world are from Scotland and Australia. America is behind in alternative energy, as usual.
Wave energy, by the way, is so dense that a 100mile length of California''s 1000 mile coastline has enough energy to power the entire state: no other energy source required.
That we aren''t tapping into these domestic sources is 100% due to the fact that alternative energy gets about 1/10,000 th the amount of funds the military gets. Which is more significant to America''s security? I''d say alternative energy. (Defense wants to spend trillions pursuing bedouins whose most successful attack against America was made with box cutters - LOL).
NO SALE on the Bailout Bill. It may now be better than what Bush or Paulson proposed, but that isn%u2019t saying much. One of the surest signs of a scam, or at least a really bad deal, is the old pitch of "you must act NOW, and SIGN today" (or else you might have time to figure out the load we''re trying to foist on you).
Tho a lifelong liberal Democrat, I now find myself in the company of unsavory boneheads (House Republicans). Dems need to stop the panic attack, not promote it.
This is about buying a hastily cobbled-together "solution" from the crooks, greedheads, and bumblers who got us into this mess. We need to hold out for a better deal that actually stands a chance of the taxpayers ever getting some of the bailout money back. And don''t give them nearly that much in the first place.
Was Dingy Harry born in Area 51.
We, The People, are still not convinced.
Robber Barons, 21st Century Style.
Robber baron (industrialist)
From Wikipedia, the free encyclopedia
Robber baron is a term revived in the 19th century in the United States as a pejorative reference to businessmen and bankers who dominated their respective industries and amassed huge personal fortunes, typically as a direct result of pursuing various anti-competitive or unfair business practices. The term may now be used in relation to any businessman or banker who is perceived to have used questionable business practices or scams in order to become powerful or wealthy. (basically, it put them in power of everything. they controlled most business affairs.)
sound familiar?
I was going on about The USSR.
What country?