Bailout Bill Passes Senate

The financial market bailout bill passed the Senate late last night, after much stick-wielding by both the administration and Senate leaders on both sides of the aisle by a vote of 74-25. The sticks, however, came with plenty of carrots, too. Such sweeteners were designed to overcome conservative resistance to the $700 billion financial industry bailout and they worked in Senate, and appear to be working in the House, which is next to take up the bailout issue. The House defeated the initial bailout effort by a vote of 228-205, sending the Dow down a staggering 777 points.”This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe,” Barack Obama said on the Senate floor. John McCain said in Missouri, before he returned to Washington, “If we fail to act, the gears of our economy will grind to a halt.” Even the White House appeared to climb on board. “The reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act,” President Bush said in a statement on Tuesday. “It’s very important for members to take this bill very seriously.” As reported by CPN yesterday, the refreshed package adds a component that calls for increasing the maximum amount of bank deposits the Federal Deposit Insurance Corp. insures from $100,000 to $250,000–a measure supporters hope will garner more backing for the plan. The new version of the plan also includes relief from the alternative minimum tax, along with tax breaks for businesses and alternative energy. The bill would arm the federal government with the power to buy troubled mortgage-related assets. The bill’s advocates contend that it would shield the nation from falling into an even deeper fiscal nightmare, while the bill’s opponents claim it would shift the brunt of the weight onto taxpayers’ shoulders and provides Wall Street with an unfair way out.