This article incorrectly represented the position of Rep. Bob Etheridge (D-N.C.) on extending certain business tax credits. Etheridge has supported approving the extension without requiring corresponding spending cuts or tax increases.
Lawmakers Revise Rescue Plan
Wednesday, October 1, 2008
Prodded by a wave of angry calls from constituents, congressional leaders dialed back partisan bickering over the $700 billion Wall Street rescue plan yesterday and advanced modest changes to the legislation in an effort to win over House Republican holdouts.
Leaders of the Senate, where most members have indicated support for the plan, said they would seek a vote on a revised rescue package tonight that would include a one-year increase in Federal Deposit Insurance Corp. caps for bank and credit union accounts, extensions of numerous business tax breaks that have expired and a fix to the alternative minimum tax for individual taxpayers.
The FDIC and tax provisions could make the bill more appealing to House Republicans, but they could also prove unpalatable to a coalition of conservative Democrats who have long opposed the tax changes. The Senate banking committee's chairman, Christopher J. Dodd (D-Conn.), who helped negotiate the revised package, expressed confidence that the revisions would yield a majority of House votes.
Although U.S. financial markets swung sharply upward yesterday, with the Dow Jones industrial average gaining 485.21 points, Monday's record 778-point loss, which was fueled by the House's rejection of the rescue plan, led to angry calls to lawmakers from constituents from across the political spectrum.
There was a widespread sense on Capitol Hill that Monday's vote had snapped the public to attention about the potential repercussions of Congress's failure to act. Last week, House and Senate offices were bombarded with calls from opponents who viewed the bill as a Wall Street boondoggle. That call pattern shifted sharply after Monday's vote, aides to lawmakers in both parties said. "It's completely in the other direction now," said Michael Steel, a spokesman for House Minority Leader John A. Boehner (R-Ohio).
Senate Majority Leader Harry M. Reid (D-Nev.) called the Senate's revised legislation "the best thing to move forward." Reid was joined on the floor by Senate Minority Leader Mitch McConnell (R-Ky.), who said the plan was "one of the finer moments in the Senate."
A senior House Republican adviser, who spoke on the condition of anonymity to talk about private strategy, said the addition of the FDIC cap increase and the tax credits -- without any corresponding tax increases -- could have "substantial appeal" in that caucus. Boehner was consulted by Senate leaders and gave his approval, the aide said.
But the addition of the tax provisions may entail new risks in the House, which returns to action Thursday. Speaker Nancy Pelosi (D-Calif.) responded tepidly to the Senate announcement, and it remained unclear when the House would would consider the revised bill, though a vote is likely by week's end. "The Senate has made a decision about how to proceed and what can pass that body. The Senate will vote . . . and the Congress will work its will," Pelosi said.
Democratic and Republican aides warned that the "Blue Dogs" -- a bloc of 47 fiscally conservative Democrats -- might now oppose the market rescue plan. The Blue Dogs have opposed extending the tax credits unless there are other spending cuts or tax increases to pay for them.
In winning House Republican votes for the legislation, Democrats may lose some of their own supporters, such as centrist Reps. John Tanner (Tenn.), Allen Boyd (Fla.) and Bob Etheridge (N.C.), all of whom voted for the rescue plan Monday.
So, too, did President Bush, who warned lawmakers that the United States would face a "painful and lasting" economic downturn if they did not approve it.