Senate expected to pass $700 billion proposal with ease

The Senate is expected to pass legislation that would provide a multibillion-dollar bailout to financial institutions, forcing House leaders to try to cobble together a majority on the package that the lower chamber rejected Monday.

The Senate vote should be anticlimactic as both Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., have worked together to tweak the package after the House in a surprise vote rejected it by a 228-205 vote. GOP presidential nominee Sen. John McCain of Arizona and Democratic presidential nominee Sen. Barack Obama of Illinois, as well as Democratic vice presidential nominee Sen. Joseph Biden of Delaware, will show up to vote "yes." Senate Democratic and Republican aides expect about 75 senators to vote in favor of the bill.

The revised bill contains a Senate tax extender package and would raise FDIC coverage amounts from $100,000 to $250,000 for one year and give the agency an unlimited credit line from Treasury. Senate leaders are counting on the add-ons to help sway wavering House members, with special focus on moderate Democrats and Republicans to switch their votes.

Rep. Steven LaTourette, R-Ohio, said the Senate package was an improvement, as was an SEC announcement Tuesday that it would soon offer additional guidance on mark-to-market accounting rules. But he underscored he wants additional changes.

"We're getting closer. We're not quite there yet," said LaTourette, a key moderate who opposed the package on Monday. He said his opposition would grow if the Senate had a take-it-or-leave-it stance. "That would push me the wrong way," LaTourette said. Reid's press secretary, Jim Manley, said the Senate will be around at least one more day to wrap things up.

LaTourette said he is trying to get about a dozen moderate Republicans to sign onto a plan that would tweak the Senate package, which allows Treasury to purchase up to $700 billion in toxic mortgage assets to steady credit markets. On Monday's vote, 23 Republican Main Street Partnership members voted for the package; 21 were against it.

LaTourette's plan would allow Treasury to spend a limited amount, initially at most $250 billion, and then require Congress to grant an affirmative vote for the remaining funds. The Senate package only allows the final $350 billion to be stopped on a congressional vote of disapproval. LaTourette said he will try then to shop his plan to moderate Democrats to see if they have a sufficient block to change the bill.

Meanwhile, opposition to the Senate package appears unchanged with the Republican Study Committee. Seventy-four RSC members voted against the bill Monday and only 26 supported it. The group put out a letter noting that the tax extender portion of the bill contained new targeted earmarks for film and television production and development activity in Puerto Rico.

"The core remains the same. It's just different wrapping paper," said Rep. Michelle Bachmann, R-Minn. Bachmann is advocating a suspension of mark-to-market rules. The rules require companies to value assets at current prices, not their value when they mature. The issue is especially crucial in the real estate market, where many properties have been severely devalued but are expected to regain value.

For his part, President Bush has been calling senators Wednesday urging support for the new rescue package. "We think the modifications are helpful and will help to achieve passage in the House," said White House Deputy Press Secretary Tony Fratto. He noted that the tax extenders and the AMT fix have long been supported by the White House. "We think we can get this legislation across the finish line."

Ben Schneider and Larry Lipman contributed to this story.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

When you download a report, your information may be shared with the underwriters of that document.