Posted on 10/01/2008 7:11:07 AM PDT by Responsibility2nd
The Senate hopes to revive Treasury’s $700 billion financial rescue plan Wednesday night by packaging it together with more than $100 billion in popular tax breaks as well as aid to rural schools important to House Republicans.
To calm voters fearful of bank failures, the $100,000 cap on federal insurance for deposits would also be raised to $250,000—a concession backed by both parties but also aimed at community banks who can be helpful in building small town support for the larger bill.
Both presidential candidates, Sens. John McCain and Barack Obama, are slated to return for two important roll calls Wednesday evening, and Obama appears to be playing an increased role in shoring up support among House Democrats after the bill failed Monday.
Senate leaders are confident that they can prevail, but the strategy is not without risks in the House given the added costs of the tax package. Congressional Budget Office estimates indicate that the net impact will be to add almost $105 billion to an already large deficit next year, and fiscal conservatives will feel they are being straight-armed by the Senate which has refused to do more to offset the costs.
The biggest single piece in the package is an extension of protections for millions of middle class families who would otherwise find themselves exposed to the higher levy under the alternative minimum tax. This alone accounts for about three quarters of the cost or $78.8 billion in 2009. Almost $14 billion more can be attributed to a variety of tax break extensions important to business, including the R&E credit worth about $8.4 billion in 2009.
The rural school aid is smaller —about $3.3 billion over the next five years— but has great importance for many Western communities and could be important then in the House.
Yet many House Democrats are already upset that Republicans and the White House had rejected their effort to require Treasury to impose a fee on Wall Street transactions in five years to help recoup any taxpayer losses. The expanded Senate package would compound this loss and puts Speaker Nancy Pelosi (D-Cal.) in an awkward spot since she has vowed to stand up for these moderates in her caucus.
“The Senate has made a decision about how to proceed and what can pass that body," Pelosi said in a statement Tuesday night. "The Senate will vote tomorrow night and the Congress will work its will. House Democrats remain strongly committed to a comprehensive bill that stabilizes the financial markets, restores confidence, and protects taxpayers, and we hope Congress can agree on legislation in the very near future."
House Majority Leader Steny Hoyer (D-Md.) also warned on Wednesday morning that adding tax extenders might cause Democratic votes to drop of.
Speaking on The Today Show on NBC, Hoyer said he was “not particularly pleased” that the Senate has decided to add a set of tax breaks to the bailout package.
"There's no doubt the tax package is very controversial," Hoyer said.
Soon after the defeat in the House Monday, the administration and leadership began exploring ways to revive Treasury’s plan in the Senate, where it has enjoyed more bipartisan support. Minority Leader Mitch McConnell (R-Ky.) took the lead but he was also helped by the fact that his chief negotiator on the Treasury bill, Sen. Judd Gregg (R-N.H.) enjoys a good humored, working relationship with Majority Leader Harry Reid (D-Nev.)
“The voters sent us here to respond to crises, not to ignore them," McConnell said. "And if you fail the first time, you get back up, and you work with each other.”
Reid had been fearful that he would be drawn into prolonged negotiations about changes in the core Treasury plan. But the decision to raise the cap on insurance for savings deposits won wide support Tuesday, and as a practical matter, all sides know they must deal with the tax extenders now or risk having to come back into session after the November elections.
“This is a brilliant move by Harry, and I believe it will help pick up votes on both sides of the aisle,” said Sen. Charles Schumer (D-N.Y.)
How brilliant will rest on the House reaction. The White House itself was somewhat apprehensive Tuesday night until it has seen a better vote count. And if Pelosi starts to lose Democrats who voted for the bill Monday, that means the burden will be even greater on House Republicans to increase their numbers from the 65 who backed the plan then.
They're voting tonight. This should be a very, very busy day.
Call you congress critters. Tell them NO!
VOTE NO!
emailed Sen. Menendez for what its worth, trying Lautenberg now, server seems to be dead like him. Will call them both as well.
How many voters do you know who have over $100,000 in their bank account? It might be a good idea to raise the FDIC limit, but it ain't being done in order to help voters, or anyone else on Main Street.
If they don’t change the incentives that caused the banking problem, the BAILOUT WILL NOT WORK.
I called my senators the other day, but I tried again this morning and can't get through. Then I tried to send one of those internal emails, evidently their server has crashed or they're just loaded because I either get a server error message or a denial of service message.
Anybody know the email address for Nelson and Martinez of Florida?
Below are the results from a current AT&T/Yahoo poll:
Do you want the $700 billion bailout to be passed? Results
Q. Stunned by a House defeat on Monday, supportive lawmakers along with President Bush are again warning that if the proposed $700 billion bailout plan to buy bad mortgages and other “rotten” bank debts is not passed quickly, America — and the world — is vulnerable to a serious recession. Critics and protesters say the current plan does not include sufficient oversight, and taxpayers should not be put on the hook for the staggering price tag.
What do you think? Should the $700 billion bailout be approved?
Yes. It may not be a perfect plan, but we must take action. 24%
No. I think we need a plan, but this bill still needs work so taxpayers can be protected. 38%
No. I don’t think we need any plan. The markets can right themselves without our intervention. 35%
Not sure/No opinion 3%
29856 votes
Forgot to post the link if Freepers want to vote:
Ongoing AT&T/Yahoo poll on the bailout:
http://js.polls.yahoo.com/quiz/quiziframe.php?poll_id=39543
Do you want the $700 billion bailout to be passed?
Q. Stunned by a House defeat on Monday, supportive lawmakers along with President Bush are again warning that if the proposed $700 billion bailout plan to buy bad mortgages and other “rotten” bank debts is not passed quickly, America — and the world — is vulnerable to a serious recession. Critics and protesters say the current plan does not include sufficient oversight, and taxpayers should not be put on the hook for the staggering price tag.
What do you think? Should the $700 billion bailout be approved?
Yes. It may not be a perfect plan, but we must take action. 24%
No. I think we need a plan, but this bill still needs work so taxpayers can be protected. 38%
No. I don’t think we need any plan. The markets can right themselves without our intervention. 35%
Not sure/No opinion 3%
30891 votes
Tax cuts have to be accompanied by spending cuts. The 2 trillion dollar bailout is not a spending cut.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
.
Google your senators and go to their own www page. They all have a way to Email under 'contact' that is a www system with boxes that you can type in and click 'send'.
That’s what I tried and I either get a “server error” or a denial of service notice.
"Bailout Rx?"
This sucks so much it should be "Bailout XXX."
I don’t see how raising the FDIC limit helps small banks.
If people understood the FDIC insurance, the LOWER limit would help small banks, because people with a lot of money would have to find multiple banks to deposit their cash, which would likely mean extra deposits to smaller, local banks.
Allowing a larger limit just means people can consolidate their money in one big bank.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.