Revised Rescue Bill Faces Senate Vote Wednesday Night

The “No” votes rose in a historic rejection of the bailout plan by members of the House of Representatives earlier this week. The Dow Jones industrial fell dramatically — and then rose again — in a historic investor panic over the very future of the U.S. economy. And meanwhile, presidential candidates and their running mates scrambled to secure votes and blame the other party for fomenting an economic crisis.

And that was all just during the first half of this week. The rest of the week should bring an end to the bailout debate one way or another, Senator Mitch McConnell (R-KY), told The New York Times.

“This financial crisis is going to be dealt with by Congress, and it’s going to be dealt with by Congress this week,” McConnell said.

A revised version of the rescue bill will face a Senate vote late Wednesday. The new bailout package includes tax breaks for businesses and an increased limit on government-insured bank deposits, as new wrinkles that key lawmakers hope will drive enough support to pass the package.

Federal Deposit Insurance Corporation chairman Sheila Blair said Tuesday that an increase in government bank insurance to $250,000 from $100,000 would restore public confidence and keep cash deposited in banks.

The Senate’s version of the bill would provide more than $100 billion in business tax breaks for research, development and employment of renewable energy sources, as well, according to media reports. The tax breaks would encourage businesses to create jobs and reduce dependence on foreign oil, two hot-button issues for lawmakers on Capitol Hill.

For their part, House members can not vote again on the bill before reconvening at noon Thursday. Although a House majority opposed the rescue bill midday Monday, Senate members might take more favorably to the tax breaks included in Wednesday’s version of the bill, sources suggested. A report in CQ Politics on Wednesday, however, suggests that House members may not have been heavily involved in the Senate’s drafting of a revised bailout package — although some consultation has taken place.

Senator Christopher Dodd (D-CT), chairman of the Senate Banking Committee, did say that he had contacted House Minority Whip Roy Blunt (R-MO) on Tuesday and they had discussed adding the FDIC language.

One of HW’s sources on Capitol Hill said members of the Senate hope to pressure the House to pass their version of the bill by voting on the proposal Wednesday, ahead of a likely Thursday vote by House members.

“This is a broad package that lawmakers are hoping diffuses criticism,” said the source, a lobbyist that asked not to be identified. “It even has buried provisions on health care reform for mental health treatment, and the idea is that there will be something for everyone.

“The question is whether it ends up being deemed so unfocused that it doesn’t address the core issue at hand.”

Includes contributions from Paul Jackson. To contact the reporter on this story, email diana.golobay@housingwire.com.