Congress Faces Wrath of Wall Street, Support From Main Street

Sept. 30, 2008— -- Despite yesterday's shocking setback and widespread negative reaction from constituents, Senate leaders Tuesday night made a surprise announcement that, instead of waiting for the House of Representatives to act again, senators would vote on an amended version of the failed financial rescue bill voted down Monday by the House .

Senate Majority Leader Harry Reid, D-Nev., Monday evening announced plans to vote tomorrow after sundown on the House bill, with some modifications. The two provisions being added as of now -- the bill is still being drafted -- would extend tax relief and more government insurance for voters' personal bank savings.

Senate leaders believe this is the best way to jumpstart the process and get the House -- whether by force or coaxing -- to pass a bill.

They believe they have the votes for this to pass. They have been in consultation with House leaders and wouldn't be taking this action and making these additions to the legislation if they didn't think it would help the House pass the measure when it votes again, likely Thursday.

Constituents Weigh In

Members of Congress are back in their home districts hearing from constituents as their leaders on Capitol Hill spent much of the day Tuesday trying to figure out what can be done to make the failed financial rescue bill more palatable.

In Muncie, Ind., Congressman Mike Pence told his fellow Hoosiers why he voted against the $700 billion economic stabilization bill.

"It was based on my philosophical objection to essentially using taxpayer dollars to nationalize every bad mortgage in America," Pence told constituents.

Judging from the phone calls to his office running 9-to-1 against the bill, that was the popular decision.

Indiana resident Gina Robinson said she thought that legislators shouldn't hurry the process.

"I didn't think it needed to be rushed. It's taken a long time for us to get into this position; I think we needed to take the time to back up," Robinson said.

Congressional Leaders Search for Support

The unpopularity of the bill is a challenge for Democratic and Republican leaders as they try to win support from the 95 Democrats and 133 Republicans who voted against it.

Many congressmen in tight re-election races voted against the bill, with 24 out of 31 members in vulnerable election races opposing the measure, fearing perhaps that they would be viewed as rewarding Wall Street excess on the taxpayer's dime.

House Democrats who voted against the bill explained their reasoning in a press conference Tuesday.

"We want something that will really work. We don't want to reward bad behavior," said Rep. Marcy Kaptur, D-Ohio, one of the rank and file Democrats who voted against he bill."

Other members who voted against the bill simply argued that they needed more time to consider a piece of legislation this significant.

"I think we have an opportunity to be thoughtful," said Rep. Bobby Scott, D-Va., "We have to make sure the taxpayer is considered in all these deals. We need to do it in a thoughtful, deliberate process."

Bush Warns of Economic Crisis, Urges Quick Action in Congress

President George W. Bush, however, told Americans that the bill needed to be passed quickly and issued a grave warning in a televised address before the stock market opened on Wall Street Tuesday morning.

"We are in an urgent situation and the consequences will grow worse each day we do not act," Bush said.

Congressional leaders in Washington spent the day looking for ways to switch over the 13 votes needed to pass the bill by introducing provisions that will attract Republicans without alienating Democrats.

Three options emerged as most viable: one, raising the limit on insured savings, two, revising "mark-to-market" accounting rules, and extending unemployment benefits.

Raising the limit on savings insured by the government from $100,000 to $250,000 per person per bank -- a move supported by both presidential contenders Sens. Barack Obama and John McCain -- would allow lawmakers to tell constituents they voted for the bill to protect their savings.

Critics say "mark-to-market" accounting rules hurt banks by forcing them to under-value their assets.

And, extending unemployment benefits may persuade some reluctant House Democrats to support the bill, despite opposition to the bailout in general.

Shoring Up Support From Main Street

Lawmakers acknowledged that Washington and Wall Street had not done enough to explain how this measure will help average Americans, and tried to remedy that.

"I do believe that no one has done an adequate job of explaining exactly what this impact will be on Main Street," Rep. Chris Van Hollen, D-Md., told ABC News.

Senate Minority Leader Mitch McConnell said that he had heard constituents' concerns that the rescue package would eat in to their retirement savings.

"I'm hearing from people, like a retired school counselor in Anderson County, who said that she can't afford to see her small retirement savings vanish," McConnell, R-Ky., said.

Sen. Bob Bennett, R-Utah, tried to impress upon constituents that their personal retirement savings may suffer if a bill is not passed fast.

"If we break the expectation once again, this time the market will drop and there will be no coming back up. This time your 401(k), your pension plan, your retirement account will be hurt in a way that will take years to recover," Bennett said in a speech on the Senate floor.

What's in a Word? Bailout, Rescue or Economy Recovery Plan

Some lawmakers think the media's characterization of the plan as a "bailout bill" hasn't helped them win any converts among constituents.

"I think that a 'rescue plan,' which many in the media are beginning to use in talking about, is probably more in keeping with what this really is," Rep. Van Hollen told ABC News.

Regardless of how the bill has been characterized, public interest and opposition to this bill has been so high the "write your representative" feature on the House of Representatives Web site has been overwhelmed with activity.

Computer technicians Tuesday limited the number of people who could write their representative at any one time so as to prevent crashing the government-run Web site.

ABC News' Julia Hoppock and Stephanie Z. Smith contributed to this report.