The House of Representatives on Friday haggled over a revised version of a $700-billion Wall Street bailout, with leading Democrats optimistic the package would pass this time.
“Today [Friday] we vote on a piece of legislation that is an imperfect option and a terrible situation,” said Republican Joe Wilson.
“But I hope Congress does not fail the American people by saying this Bill has solved the whole problem, because it has not,” he said, calling for oversight on the financial-service industry.
Many House Republicans and some Democrats had failed to back the draft Bill in its original format, amid widespread anger that Congress was giving a bailout to Wall Street banks blamed for the fuelling the crisis.
Many lawmakers on Friday voiced deep scepticism whether the new measure would work, while bleakly concluding that the Bill was a necessary evil.
“There’s a song the day the music died. I don’t think it is too much of a stretch to say this may be the day America died,” Republican Virginia Foxx said on Friday.
“I’m not alone in feeling that what the Congress is about to do today is a very, very serious consequential thing for this country.”
The debate resumed amid more shocking news for the world’s largest economy, which shed 159 000 jobs in September as the weight of the housing collapse and credit crunch hit a broad swath of industries.
The unemployment rate held at 6,1%, a five-year high, with payrolls having fallen by 760 000 this year, the Labour Department said.
Democrat Rahm Emanuel vowed: “This is only the first step. While we address the balance sheets of banks, the next step must now address the cheque books for middle-class families and the struggles that they face.”
Global stocks had sank heavily early on Friday with losses in Asia as some lawmakers continued to make known their opposition to using vast amounts of taxpayer money to bail out Wall Street firms.
The amended version of the plan is laced with $150-billion in tax breaks to coax reluctant lawmakers from both the Democratic and the Republican parties to get on board.
The bill, thrown out of the House on Monday, was resoundingly passed 74-25 by the Senate, the upper chamber, spurring hopes the House of Representatives might now follow suit.
Just over a month from election day, presidential candidates Barack Obama and John McCain also backed the effort, piling on the pressure after rejection of the Bill sent global markets into a spin, causing the largest one-day loss ever on the Dow Jones.
Groundswell
President George Bush on Thursday joined the groundswell of pressure, urging the House to follow the Senate’s lead and approve the massive rescue package, warning “people’s jobs are in jeopardy”.
Tennessee Republican Zach Wamp acknowledged Americans were still angry that the taxpayer was picking up the tab for Wall Street’s mistakes. “They are mad as heck. The average American now stands to lose,” he told Fox News on Thursday.
“But you have got to do what you think is right. I thought the right thing Monday was to vote no. And I think the right thing to do tomorrow is to vote yes.”
John Shadegg of Arizona, a leader among conservative Republicans who had called on Treasury Secretary Henry Paulson to resign, told a radio station in his home state that in its amended form he was likely to support it.
Another Republican who initially opposed the bailout, Jim Ramstad of Minnesota, indicated that he too had changed his mind.
The new rescue Bill, like the earlier one rejected by the House, gives the US Treasury power to buy up toxic mortgage debt that has been choking the financial industry.
It would essentially create a $700-billion federal programme to buy bad assets from banks and other financial firms at a steep discount.
Backers of the legislation said they hope the federal government will eventually be able to recoup most or all of the money by selling the assets later.
To make the Bill more attractive, the Senate raised the ceiling on federal insurance for bank deposits from $100 000 to $250 000, and added up to $150-billion in tax-break extensions for middle-class families and business.
They also retained the limits of “golden parachute” severance payments to disgraced Wall Street executives. — AFP