Congress Sweetens Bill, Hopeful for Passage

Senate passes the package with a second House rejection called "unthinkable."

ByJake Tapper
October 01, 2008, 6:42 PM

Oct. 2, 2008— -- With the Senate having overwhelminglyapproving the $700 billion Wall Street bailout -- fattened with "sweeteners " into an $800 billion bailout -- Congressional leaders are "cautiously optimistic" that the House won't reject it for a second time this week.

"I do feel that we're all going to what's in the best interest of the country on tomrrow and I feel very comforatable with where we stand. Of course, I felt comforatble on Monday. I just did not get the vote we expected from the other side," Rep. James Clyburn of South Carolina, the Democrats 'Majority Whip, told reporters Thursday night.

The economic rescue plan breezed through the Senate Wednesday night on a 75-24 vote, a move that was intended to put pressure on the House to also approve the measure. House rejection of an earlier version triggered a told ABC News' George Stephanopoulos that they are "cautiously optimistic" that the bill will pass. The White House said that Bush has made two dozen phone calls to House members who had initially voted no and pursuaded several of them to switch their votes to yes, Stephanopoulos said.

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A second rejection of the bill was "unthinkable," according to congressional leaders.

The House will be voting on a bill packed with $100 billion worth of extra incentives than Monday's proposal had.

Some of those additions have been assailed by spending watchdogs as "pork," like the $6 million for the makers of kids' wooden arrows, according to a summary of the bill released by the Senate Finance Committee.

Other goodies intended to attract the votes of individual members of Congress include $192 million for the rum producers of Puerto Rico and Virgin Islands, $128 million for car racing tracks, $33 million for corporations operating in American Samoa, and $10 million for small film and television productions.

Other Senate modifications with much broader appeal include a provision that gives the Treasury Department the authority to buy troubled mortgage securities.

The bill also now includes an extension of numerous tax breaks for research and development and renewable energy companies, as well as personal tax breaks for college tuition and disaster victims.

It proposes adjusting the Alternative Minimum Tax, so it doesn't hit more than 20 million middle class Americans in 2009.

Another key modification is a one-year increase in the limits of personal bank savings the government insures up to $250,000.

With the additions, the bill could achieve its goal of appealing to the 133 disapproving House Republicans. Rep. John Shaddeg, R-Ariz., who voted against the bill Monday, has changed his mind.

"At this point, I am assuming they don't change it, strongly leaning towards voting for it," Shaddeg said.

Nevertheless, Rep. Marcy Kaptur, D-Ohio, told "Good Morning America" that she will still vote "no," calling it "the wrong medicine."

"I think that the worst part is, this is adding over $1 trillion to our deficit," Kaptur said. She believes the crisis can be handled without saddling the voters with Wall Street's debts.

Rep. David Dreier, R-Calif., said he "hated' the first version of the bill, but would vote for this one.

Dreier told "GMA" that he held a telephone town hall meeting with members of his district and that one woman complained that the credit crisis had made it impossible for her to get a college loan for her daughter.

Wall Street icon Warren Buffett compared the fiscal meltdown to an "economic Pearl Harbor" during an interview on the "Charlie Rose Show" and said it was urgent for the government to act.

The U.S. economy is "like a great athlete that's had a cardiac arrest," Buffett said. "And the paramedics have arrived . . . They shouldn't start criticizing the patient. They should do what's needed right now."

Buffett has made his own prognosis on the economy. In recent days he has announced he will invest $3 billion in General Electric and $5 billion in Goldman Sachs.

Despite promising support building on the Republican side, some are worried that fiscally conservative House Democrats will not support the bill's tax cuts that are not paid for in the budget.

Some Worries Persist in House

Despite promising support building on the Republican side, some are worried that fiscally conservative House Democrats will not support the bill's tax cuts that are not paid for in the budget.

"I personally am not very happy about that. I think there are aspects of the package which make the debt worse," said House Majority Leader Steny Hoyer. "Debt is the problem, that's why we're here."

Hoyer said he will support the new package regardless, but feared some Democrats who supported the bill Monday might switch their votes.

"If I believe we don't have the votes on Friday, perhaps I'll wait until Saturday, and if we don't have them on Saturday, perhaps we'll wait until Sunday," the Democratic House leader said.

On Wednesday, President George W. Bush heralded the Senate version of the bill, arguing that it's better than the one that failed to pass the House 228-205 on Monday.

"It's very important for members to take this bill very seriously," Bush said while meeting with NATO Cmdr. Gen. McKiernan in the Oval Office. "It's very important for us to pass this piece of legislation so as to stabilize the situation, so that it doesn't get worse and that our fellow citizens lose wealth and work. ... the bill is different. It's been improved. And I'm confident it will pass."

McCain expressed confidence on the bill Wednesday, stressing the urgency of the bill's success in the Senate during a campaign event in Independence, Mo.

"I am confident there are enough people of good will in both parties to help see America through this crisis," McCain said. "And when the last vote is cast, we can be grateful to all of them -- Democrats and Republicans alike -- for helping to solve the crisis instead of merely exploiting it."

But, he continued, "If the financial rescue bill fails in Congress yet again, the present crisis will turn into a disaster."

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Obama also stressed necessity of the bill's passage.

"It is clear that this is what we must do right now to prevent a crisis from turning into a catastrophe."

Still, the big looming question remains: what will happen when the bill returns to the House on Friday for a second vote?

Senate Republican Leader Mitch McConnell expressed confidence in the Senate's work, but wouldn't bet on its prospects in the House.

"We're confident that the way we've got this package will work in the Senate," McConnell said. "And we're optimistic it will work in the House."

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