Bailout Bill Picks Up Steam
Senate Passage Appears Assured; Opposition From House Republicans Said To Weaken
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Senate Majority Leader Harry Reid, D-Nev., right, accompanied by Senate Minority Leader Mitch McConnell, R-Ky. (AP Photo/Dennis Cook)
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Rolando Gamez sweeps up litter on Wall St. in front of the New York Stock Exchange, Sept. 30, 2008 in New York. (AP Photo/Mark Lennihan)
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Traders Anthony Alvarino, left, Ed Curran, third left, and Steve Schnibbe, right, share a laugh on the New York Stock Exchange floor, Sept. 30, 2008. (AP Photo/Richard Drew)
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Rep. Todd Platts, R-Pa., is cheered by demonstrators after he informs them he will cast a "no" vote on his way to vote on the financial bailout package Monday, Sept. 29, 2008, on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)
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Senate Jumps To Action
The Senate announced it will put an economic rescue bill to a vote, helping Wall Street regain some losses, Bob Orr reports.
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The Heat Is On
With no new financial bailout deal in place and Congress in recess to observe Rosh Hashanah, the pressure intensifies to reach an agreement as Election Day draws near. Bob Orr reports.
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Credit Freeze Hard On Wall St.
Although the Dow enjoyed a comeback, many on Wall St. are on edge because the credit markets remain frozen. Anthony Mason reports.
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Eye On The Economy
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Credit Crunch
Feeling the squeeze? Here's a look at actions and statements from key players in Washington.
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.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.



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See all 561 CommentsI think we need to look past the fat cats and look at the whole picture
Posted by dj282008 at 08:18 AM : Oct 01, 2008
I''ve been trying to do that and am left with one big question that leaves me wondering why this humongous bailout is really necessary. From what I''ve read about 3-5% of mortgages are in default, which means at least 95% of people are sending in their monthly payments. So, why is there suddenly this complete inability of banks to come up with credit if the vast vast majority of people are still paying their mortgages? Does anyone out there know?
It seems to me that these politicians are running around like chickens with their heads cut off. Paulson suddenly panics after previously telling everyone that the economy is basically sound, and these lawmakers start freaking like little girls who''ve seen a mouse.
I just don''t get it, I really don''t - and I suspect most in the House don''t either.
Americans don''''t want this passed!!!
Posted by GrabAndGo
I agree 100%!! The taxpayers have enough on their plates and no one to bail us out.
I would love to replace everyone in Washington--after the past 8 years--I''m all for term limits for these representatives.
Posted by rational_
They have been using the same urgency as they did for Bushs manufactured Iraq war, after the market went up yesterday---this is not as urgent as they say.
What they want is a rush job so they can get back to their electorates.
Well, let us not rush to vote these people back in---take your time and get all those up for re-election---out!!
I would love to replace everyone in Washington--after the past 8 years--I''''m all for term limits for these representatives.
So you would rather the economy fail? Wall street is the foundation of our economy, if it fails so does everything else? And your ok with this, becuase you don''t like the idea because of the fact that banks need more money. Fine Let it Fail. But NOT one Da-mn person better b*itch because we go into another depression. Because the only one you care about is you
We''ve already seen a considerable market recovery. Will there be fluctuations yet? You bet. Big ones until all this settles of out. But if they go ahead with this bill, we''re going to be sunk for certain because it''s only the beginning of a downward spiral from there, because the next financial entity in crisis will want more money, and then there will be another one, and another one. We''ve seen how many so far? When does it end?
Posted by dj282008
Ok so why are the everyday working people the ones to constantly bail out the government?
We pay taxes---lots of them.
Currently the taxpayers are funding:
$10 Billion a month for the Iraq debacle.
No one will tell us how much we owe China and Saudi Arabia, but I''ll bet I know hwo will be paying them back.
The Feds gave $630 Billion to the global financial system---who''s fotting that bill?
And now they want to impose up to $700 billion to bail out thieves and irresponsible behavior on Wall St?
Has anyone bothered to add up these figures so we can know exactly what the government is costing us?
Who will bail out the taxpayers---perhaps another $600 stimulus check?
Posted by dj282008
Let the (cow) chips fall where they may. We can''''t keep doing this. The cycle of taxpayer-funded corporate welfare has to be broken.
But not at a greater strain. I agree that we really don''t need to do this, but if I had a choice between 700 Billion bail out and what this country went through back in the 30''s? I am sorry bail out wins
REJECT THE BAILOUT
REJECT THE BAILOUT
Posted by smurfcrusher
Is that the same concept as a pit bull and lipstick?
We pay taxes---lots of them.
Currently the taxpayers are funding:
$10 Billion a month for the Iraq debacle.
No one will tell us how much we owe China and Saudi Arabia, but I''''ll bet I know hwo will be paying them back.
The Feds gave $630 Billion to the global financial system---who''''s fotting that bill?
And now they want to impose up to $700 billion to bail out thieves and irresponsible behavior on Wall St?
Has anyone bothered to add up these figures so we can know exactly what the government is costing us?
Who will bail out the taxpayers---perhaps another $600 stimulus check?
Who is going to help us when we need stuff? The bail out is wrong. I am not debating this issue. I agree it is a load of ***. But if you think our economy is bad now, what happens when the economy fails. Then what happens. Gas will Sky Rocket. Loans will be almost impossible to acheive, more people will go into foreclosure and a complete collasps of our banking system. Thats what people need to look at. Not the Wall-Street cats. IMHO, if we have to bail them out, send them ALL to prison, and they loose every dime of there pension. If we have to bail them out, they are broke and it will stay that way.
I have class so I will be back in one hour. All comments directed to me can be made via e-mail dj292009@gmal.com. Please tell me what topic so I know where to reply.
Thanks
Posted by rafterman1
True. It has often been said that the markets are driven by greed and fear. Those two emotions never lend themselves to careful, analytical thought.
Throw these money changers out of the US Temples!
Posted by omega40 at 08:48
The fact that they are making this so "urgent" is suspicious to me.
Here is an interactive map from MSN on the effect of this in other countries.
The fact that the Feds have "donated" $630 billion to the global finance system should help them out enough to allow our representatives to work on this intelligently and not shooting from the hip creating panic where there should be none.
The map: http://www.msnbc.msn.com/id/26957587
http://www.msnbc.msn.com/id/26964201
Eight years of Bush/Cheney greed has ruined this country in ways we could never imagine--and before some idiot pipes in----the Democrats have done absolutely nothing the past 2 years either.
how old are you? you say you have grandkids, but i find it hard to believe with your ignorant juvenile posts that you are that old
Posted by jamesm12341 at
Shut up jwind11 and just resume your job as the ace CBS spellchecker--
That was just light humor--don''t they ever use humor where you live?
Posted by jamesm12341 at 08:56 AM : Oct 01, 2008
I also have great-grand kids jwind11--how about you--any kids?
So Bush has run up the deficit to $10 trillion, and the neocons are saying that it is OK, because we are going to make it impossible to pay off.
Oh well, all things end in time, America, some of the times were nice.
Posted by jamesm12341
Why do you have such a fixation on something I posted once months ago in jest?
You have an inability to add anything of interest or educational to these posts---that must make you feel terribly inferior--which causes you to disect what people post.
That jwind11 makes you appear to be pretty inadequate.
Counseling just might help with that.
Glad to see Hoyer being the lead here.
With their bailout plan Congress is introducing a new kind of economics to the Country: "Flood Economics". Never mind the trickling down of money from the rich to the middle class and poor*. Now this plan uses taxpayer%u2019s money to flood the markets with what we call in the industry zombie securities or revived bad dept.
This incredible innovation in economics management will give the middle class and poor the tools that they will need to get through the flood: a shovel, a sand bag and a cross%u2026
* "Trickle-down economics", which is the economic-political argument that the increases in the wealth of the rich are good for the poor because some of such additional wealth will eventually trickle down to the middle class and to the poor.
Wall Street and these palm greasers have a great wonderful extravagent eight year long party. Lots of wine n dine & arm candy and now they oh so graciously present us with "the bill".
Sorry guys.
Off to the kitchen to work off YOUR bill at the kitchen sink. Oh, and by the way, the floor needs a good mopping and I think the toilet''s clogged again.
Hop to it.
No way the press is again being lied to, and helping spread these lies so that the lipstick looks better on the pig.
Come on CBS, did you not learn from Iraq, you would continue to trumpet even economic treason?
Glad to see Hoyer being the lead here.
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Posted by donbl1
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Yes how dare she point the finger of blame at republicans for things republicans have done but obviously arent supposed to be held accountable for.
Posted by fedupwithit1 at 09:16 AM : Oct 01, 2008
I know he''s just like a little gnat---want to give him a swat.
Posted by Mrs_Premise at 09:19 AM : Oct 01, 2008
HAHAHAHAHA
Since when did Hannity and Lintball become LIBERALS???
Posted by hydrodev at 09:15 AM : Oct 01, 2008
It does not work that way. The government is going to buy bad debt from the banks/mortgage companies in the form of securities. The government won''t own stock in the companies or even own the actual mortgages. This will do nothing to address the issue of bad mortgages. It is just an infusion of more credit to free up credit and remove some of the risk that the companies took in the form of bad loans. I am not an economist but it makes absolutely no sense to me and I don''t see how it can possibly work.
Leadership is doing the right thing for America.
BTW, the calls are now 50/50 and the bill will pass.
The majority of Americans are invested through pension funds, 401K/IRA or their own savings. The reality now facing them and especially Boomers dictates "some" sort of Government action.
This is one quote from the article:
"Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to
black borrowers, compared to 5 per cent of loans in the conventional loan market"
This was strongly supported by Bubba and both political parties in the search to give EVERY American a home.
Posted by donbl1 at 09:27 AM : Oct 01, 2008
I am not opposed to government action. I just don''t see how the government borrowing $700 billion in credit to throw at this problem will help. The problem needs to be addressed from the bottom up. Turn those bad mortgages into good mortgages by restructuring the mortgages to a reasonable fixed rate that the lenders can afford.
Well, Hoover didn''t get us into war. But yes, when the market crashed, he began his destructive meddling in the economy which made things worse. Then he handed the ball off to FDR, who REALLY made things worse. Perhaps we''ll have a repeat of that when Bush hands off to Obama.
STOP THE BAILOUTS!!!!!
WE DON''T NEED WALL STREET!!!!!!
WE CAN REBUILD AMERICA WITHOUT YOU!!!!!
STOP THE BAILOUTS!!!!!
WE DON''''T NEED WALL STREET!!!!!!
WE CAN REBUILD AMERICA WITHOUT YOU!!!!!
And exactly how do you think this is possible
DERIVATIVES WILL BANKRUPT THE TAX PAYER!!!!!!
SAY NO TO BAILOUTS AND NO TO WALL STREET
THERE IS A PLAN B!!!!!
larouchepac.com
However, I do not see a good example.
Several articles today on Bloomberg and CNBC about companies not being able to borrow money as the banks will not lend.
The result of that will be companies closing down or laying off.
In just one example, Ford may go into default today if they do not come up with $1.5B in payments that was supposed to come from the banks through credit arrangement.
Ford still employs over 100K people plus thousands more at suppliers.
Got to get the Banks to start lending at reasonable rates or we will have a dramatic slowdown.
They fail to hear the people''s voice and cater to the special interest''s!
Senator Fattah, of PA. Kiss my vote goodbye!
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Posted by dj282008 at 09:33 AM : Oct 01, 2008--
Please be brave, and go to larouchepac.com for a 1:00pm webcast where he explains PLAN B for Congress.
The first vote revealed WHO are the conflicted members of Congress - the ones who are PERSONALLY invested in subprime loand. The ones who are trying to BAIL THEMSELVES OUT from the "affordable housing" meltdown.
The rest of Congress can see what an AWFUL idea this is. We are REWARDING the fat cats like Barney Frank for pandering to their poor constituents by putting them in houses they never could have afforded.
NO BAILOUT! LET THEM TRY UNTIL H3@L FREEZES OVER, it must not pass.
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