By Maura Reynolds, Richard Simon, Los Angeles Times Staff Writers and Nicole Gaouette, Los Angeles Times Staff Writers|October 02, 2008
WASHINGTON — With both presidential candidates returning to the Capitol to lend support, the Senate was debating a modified $700-billion Wall Street rescue bill this afternoon and planned a vote this evening.
Passage was widely expected in the chamber. But it remained uncertain whether the legislation, even with new "sweeteners," could prevail amid conservative and liberal resistance in the House of Representatives. On Monday, the House rejected a version of the bailout plan, sending the Dow Jones industrial average down 777 points. A new House vote has been set for Friday morning.
While negotiators worked to keep the basic legislation intact, they added a list of modifications to the rescue program itself as well as a broad range of sweeteners, including tax breaks, aimed at picking up support among House members.
For instance, the measure now includes a tax benefit for bicycle commuting sought by Rep. Earl Blumenauer (D-Ore.), who voted no on Monday. It also includes an extension of the solar tax credit, a priority of Rep. Gabrielle Giffords (D-Ariz.), who has said she wants to make Arizona the "Silicon Valley of solar energy."
As a lure for Californians, two new tax breaks worth nearly $500 million are aimed at movie and television producers who make films in the United States.
In the rescue plan itself, senators proposed a large hike in the limit on federally insured deposits, to $250,000 from the current $100,000 cap.
As a result, in the 12 days since it was proposed by the Treasury Department, the measure has grown from a three-page proposal to a 451-page piece of legislation titled the Emergency Economic Stabilization Act.
Monday's precipitous stock market drop seem to prompt a turn in public opinion. After days of being flooded by e-mails and letters from constituents angry about the legislation, lawmakers said they received a new influx of communication from voters urging them to do something to stabilize the situation.
"That's part of what this crisis has taught us -- that at the end of the day, there's no real separation between Wall Street and Main Street," Democratic presidential candidate Sen. Barack Obama said on the Senate floor. "There's only the road we're traveling on as Americans."
Republican presidential candidate John McCain was scheduled to speak before the Senate later today.
Obama also alluded to polls published today indicating that most Americans believe they will be personally hurt by the financial crisis.
"I know that many Americans are feeling anxiety right now about their jobs, about their homes, about their life savings," Obama said. "But I also know this, that we can steer ourselves out of this crisis. We always have."
Obama and others said they understood the anger of voters who felt they were being asked to bail out unfeeling financiers on Wall Street.
"It would be one thing if we had a choice," said Sen. Dianne Feinstein (D-Calif.). "But I don't believe we have a choice."
As the day began with word of progress on the bill in the Senate, stocks moved mildly. The Dow Jones industrial index finished the trading session down about 20 points.
