Revised legislation to rescue America's financial institutions has cleared its first hurdle, winning approval in the U.S. Senate. But as VOA's Kent Klein reports from Washington, the bill could face a tougher test Friday in the House of Representatives.
Senators overwhelmingly passed the enhanced version of the bailout, 74-25 Wednesday night, sending it to the House, which rejected the first incarnation of the bill earlier in the week.
Under the controversial plan, the U.S. government would spend $700 billion to take over bad debts from U.S.-based financial institutions.
The easy Senate approval raised hopes among the Bush administration and congressional leaders that many of the Representatives who voted against the bill on Monday might change their minds by Friday.
The revised legislation is said to be gaining support in the House, thanks in part to amendments including $100 billion in tax breaks for businesses and middle-income families, as well as an increased limit on federal deposit insurance.
The proposal is not popular with many taxpayers. Mail, e-mail and telephone calls to congressional offices have been overwhelmingly against it. With the entire House of Representatives and one-third of the Senate up for re-election about one month from now, many lawmakers have been hesitant to support the bailout.
Even some Senators who voted for the plan, such as Republican Lindsey Graham of South Carolina, say they did so reluctantly.
"We have two choices as far as I am concerned: a bad choice we all recognize, and a catastrophic choice if we do nothing," he said.
Many lawmakers who voted yes warned of a financial catastrophe if the bailout goes down again. Democrat Chuck Schumer of New York said failure to pass the bill would result in the financial equivalent of a heart attack.
"Our economy's body is in terrible shape because its arteries, the financial system, is clogged, and it will cause a heart attack, maybe in a day, maybe in six months, but we will get a heart attack for sure if we do not act," he said.
Both presidential candidates left their campaigns to return to the Senate and vote in favor of the bill. Illinois Democrat Barack Obama spoke on the Senate floor, saying a second defeat for the legislation would affect Americans everywhere.
"What it means is that businesses will not be able to get the loans they need to open a new factory or make payroll for their workers. And if they cannot make payroll on Friday, then workers are laid off on Monday. And if workers are laid off on Monday, then they cannot pay their bills or pay back their loans to somebody else. And it will go on and on and on, rippling through the entire economy," he said.
Earlier in the day, Republican John McCain of Arizona warned of dire consequences if the enhanced bailout plan went down.
"If the financial rescue bill fails in Congress yet again, the present crisis will turn into a disaster," McCain said.
Wednesday's vote crossed party lines. Many Republicans voted for the plan, and some Democrats voted against it. Some liberals oppose using taxpayers' money to rescue the financial markets, and some conservatives believe the government should not interfere in private business.
Alabama Republican Richard Shelby voted against the proposal because he thought there should be a better alternative.
"Many around here are finding comfort in the notion that something is better than nothing. I believe that is a false choice. The choice we faced was between pursuing an informed response or panic. And I think we chose panic," he said.
If the House passes the bailout plan, it will go to President Bush for his signature.
After the House rejected the previous version on Monday, the Dow Jones Industrial Average lost almost 780 points, a record for a one-day point loss. The Dow recovered more than half of that lost value on Tuesday.