Arm Twisting, Add-Ons Aid Bailout's Appeal

Senate Majority Leader Sen. Harry Reid, D-Nev., talks with reporters during a news conference on the passage of the Senate version of the bailout package Wednesday, Oct. 1, 2008 in Washington. From left, Sen. Christopher Dodd, D-Conn., Reid, Sen. Judd Gregg, R-N.H., and Senate Minority Leader Sen. Mitch McConnell, R-Ky. (AP Photo/Evan Vucci)
AP Photo/Evan Vucci
Bit by bit, lawmaker by lawmaker, forces in favor of the massive financial rescue plan rejected just days ago are turning around the tide of opinion in Congress.

They're using goodies, phone calls, old-fashioned arm twisting. They bring a keen knowledge of what needs to be added to the package to entice a particular congressman to flip, whether it has much to do with Wall Street or not.

Mental health parity in big insurance plans?

Sure, if that's what it takes.

"This is sausage-making, of course," said Jade West, lobbyist for the National Association of Wholesaler-Distributors. Toward, in her opinion, a tasty end product.

But also an even more expensive one. Add about $120 billion over five years in sweeteners the Senate is attaching to the $700 billion price tag of the bailout plan that the House voted down Monday.

Senators added the new items in a 74-25 vote late Wednesday, sending the rewritten package back to the House for a showdown vote expected Friday. House leaders planned to spend Thursday pressing rank-and-file members for the dozen converts they need.

The bailout package was never in danger in the Senate. Senators instead played catalysts for the House, adding tax provisions popular with the left and right in a bid that House leaders hope - but cannot guarantee - will persuade enough of the House rank-and-file to switch from "nay" to "aye" on a highly contentious bill a month before Election Day.

The "no" voters of Monday are under tremendous pressure to just say "yes" now. The combined leadership of both parties in Congress is united behind the plan, President George W. Bush is making calls, interest groups are pressing in and careful track is being kept of everyone's political pulse.

"Leaning yes - NEEDS MORE CALLS," a trade association list says of one Tennessee Republican, Zach Wamp. Of another, Marsha Blackburn, the list says: "(Undecided), but positive. Sales tax impt."

That's a reference to a provision added by the Senate that would allow taxpayers to deduct state and local sales taxes, an enormously popular idea in Tennessee, Texas, Florida and a few other states. "This is moving in the right direction," Blackburn said.

And there's more, much more.

For Western GOP lawmakers, there's help for rural counties, a huge issue for lawmakers like Doc Hastings, R-Wash. And Republicans are excited about new accounting rules to ease bank liquidity and plans to boost deposit insurance coverage.

The assorted add-ons, mostly tax measures, include energy-related provisions, business tax breaks, a one-year fix of the alternative minimum tax and tax relief for victims of recent disasters.

Meanwhile, the phone calls from constituents, overwhelmingly against the bailout before, are more evenly divided. People who saw the bailout as strictly a Wall Street sweetheart deal have a more nuanced view now that they have seen their retirement and other investment accounts tank after the House defeated the bill.

"Pain is always a good way to focus people," said R. Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce.

The whole idea is still a mud sandwich for many lawmakers. But some are preparing for a politically painful switch.

For Steve LaTourette, the boost in Federal Deposit Insurance Corp. limits from $100,000 to $250,000 and the move by the Securities and Exchange Commission easing accounting rules for banks has the Ohio Republican leaning toward switching to "yes," even as calls to his office were at one point running 200-1 against. He's also close friends with GOP leader John Boehner, for whom passage of the bill is a key leadership test.

"To have to say 'no' to Boehner was really hard," said LaTourette. "To say 'no' on the bill was not so hard. It was bad politics and bad policy."

But he added, "If we hadn't defeated it the other day, we wouldn't have the FDIC stuff," nor the change in accounting rules. "So I think this bill is improving."

Rep. Henry Cuellar, D-Texas, fielded a call from Bush urging him to switch. Cuellar says the extension of tax breaks for businesses and individuals, and allowing people to deduct sales tax payments, has him "seriously considering" voting for it.

"We're looking at more of a broader-based economic recovery plan instead of just paying for the sins of those five companies on Wall Street," Cuellar said.

Texas Democrat Gene Green, however, isn't sold yet. He wants changes to the bankruptcy code to allow judges to restructure the terms of a home loan in bankruptcy proceedings. No way, say Republicans and the White House.

Green supports the deductibility of sales taxes, but "does that still overcome investing more than we spent on the Iraq war without really getting to the problem of people being evicted from their homes?"

The upshot? "They don't have me yet," Green said.

Others won't be moved. For them, the issue is still the unprecedented bailout of Wall Street.

"The bill that they are going to send back is the same bill that I voted against two days ago," Rep. Joe Barton, R-Texas, said on Bloomberg Television. "Why would I turn around and vote for it tomorrow evening or Friday?"

Rep. John Shadegg, R-Ariz., is now counted as a "yes," after remarks on local radio praising the new deposit insurance and accounting rules.

"I'd be inclined to vote for the bill, assuming there have not been any bad things added to it," Shadegg said on KTAR, a Phoenix radio station.

Working off a color-coded spreadsheet listing House members whose "no" votes sank the bill in that chamber on Monday, business groups contacted dozens of lawmakers - at home and in Washington - to seek their support. By late afternoon, that list showed five legislators who'd voted "no" now leaning toward supporting an overhauled version of the bill the House rejected by 23 votes.

Efforts by the National Restaurant Association were typical of how many trade groups were working to round up votes.

Besides contacting lawmakers directly in Washington, the organization asked its 50 state chapters and its 18,000 most active members around the country to contact their members of Congress directly.

Among the extended tax cuts added to the bailout bill is one allowing those who build new restaurants or improve existing ones to write off the cost faster than the current 39.5 years.

The Solar Energy Industries Association also stepped into the fray, focusing on about 70 House members who voted "no" from places where solar energy manufacturers or solar energy users are important. That includes California, New Jersey, New York, Arizona and Ohio, said Rhone Resch, the group's president.