Senate plans vote on modified bailout bill

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By Sean Lengell and David R. Sands

UPDATED:

Senate leaders late Tuesday scheduled a vote for Wednesday evening on the elusive $700 billion Wall Street bailout package, capping a day in which Capitol Hill lawmakers, President Bush and the presidential candidates of both major political parties gauged how to win enough votes from rank-and-file House members who already rejected it.

Majority Leader Harry Reid, Nevada Democrat, and Minority Leader Mitch McConnell, Kentucky Republican, said the measure will contain the $700 billion financial market rescue plan that failed in the House Monday, plus a provision to increase the federal deposit insurance limits to $250,000 from $100,000.

It also will include a tax cut package rejected by the House on Monday, which calls for eliminating certain business and energy-related taxes and the alternative minimum tax, which is set to hit about 22 million Americans with about a $2,000 tax increase.

The move may be popular with Republicans, but House Democratic leaders have insisted on paying for the cuts by raising taxes elsewhere.

Two House leaders said Wednesday headway is being made toward getting the $700 billion financial industry rescue bill through Congress, thanks partly to a provision increasing insurance for people's deposits.

"I think the Senate thinks it has the votes and I think it probably will pass," House Majority Leader Steny Hoyer, D-Md., said. House Republican Whip Roy Blunt of Missouri agreed that prospects for passage have improved, and he said he was particularly heartened by indications the legislation has become more appealing to constituents back home.

Mr. Blunt told NBC one of the reasons he is more optimistic is that lawmakers are hearing less vocal opposition from their districts. He said that calls and e-mails to congressional offices that were running about 90 percent against the measure earlier now are at about "50-50."

After falling sharply Monday after the stunning 228-205 House vote against the bailout proposal, world markets staged a rally Tuesday, partially undercutting arguments from Mr. Bush and top congressional leaders that Congress must act quickly.

Wall Street snapped back Tuesday after its biggest sell-off in years, as the Dow Jones industrials regained 485 points of the record 778 it lost Monday. The S&P index of 500 major stocks was up 58.32 points to 1,164.