Obama urges bailout Bill's passage, offers plan

US presidential candidate Barack Obama urged lawmakers on Tuesday to return to the negotiating table to work on a financial rescue deal and offered a new proposal he said could help attract support.

The Democratic White House contender suggested raising the limit on bank deposits guaranteed by the federal government to $250 000 from its current level of $100 000.

“One step we could take to potentially broaden support for the legislation and shore up our economy would be to expand federal deposit insurance for families and small businesses across America who have invested their money in our banks,” Obama said in a written statement.

In a shocking vote on Monday, US lawmakers in the House of Representatives rejected a $700-billion bailout package, prompting one of the worst plunges in stock prices in Wall Street history.

Obama, an Illinois senator vying against Republican John McCain in the November 4 election, said a failure by Congress to come together on a plan “would be catastrophic for our economy and our families”.

“At this moment, when the jobs, retirement savings, and economic security of all Americans hang in the balance, it is imperative that all of us—Democrats and Republicans alike—come together to meet this crisis,” Obama said.

The rescue package that was rejected was worked out in marathon weekend talks among White House officials and Republican and Democratic negotiators. It would have allowed the government to buy up bad debt from troubled Wall Street firms and banks.

The House voted 228-to-205 against it.

Obama said he did not think starting from scratch with a new Bill would succeed.

But he said the deposit insurance proposal might be a way of drawing more interest toward the Bill, which lawmakers who rejected it saying the plan does little beyond cleaning up Wall Street’s mess.

“I will be talking to leaders and members of Congress later today to offer this idea and urge them to act without delay to pass a rescue plan,” he said.

McCain accused Obama and other Democrats of politicising the debate over the bailout, while Democrats said he was deflecting attention from his own failures.

Obama has a slight lead in the polls over McCain. - Reuters

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