Senate plans vote on modified bailout bill

Senate banking committee Chairman Christopher J. Dodd, the Connecticut Democrat who was a key architect of the compromise, told reporters, “I’m told a number of people who voted ‘no’ yesterday are having serious second thoughts about it.”

He added, however, “There’s no game plan that’s been decided.”

Earlier Tuesday, both Republican presidential nominee John McCain and his Democratic rival, Barack Obama, endorsed raising the federal deposit insurance on bank deposits to $250,000. The change could reassure nervous Americans - and hence their elected representatives at the Capitol - that the legislation would shore up the faltering economy.

Mr. McCain and Mr. Obama, as well as Democratic vice-presidential candidate Sen. Joseph R. Biden Jr., are expected to be in Washington for Wednesday’s Senate vote.

Also being discussed on Capitol Hill are other sweeteners, including allowing companies to repatriate foreign earnings to the U.S. tax-free to buy distressed assets or to extend a write-off for operating losses.

The House, on break for the Rosh Hashana observance, is scheduled to meet again Thursday, though it’s not clear whether they’ll have a new agreement on which to vote.

With his own party leading the revolt against the bill, Mr. Bush made another public appeal for passage of the $700 billion package, after conferring with Mr. McCain and Mr. Obama. He said Monday’s stock-market losses of $1 trillion dwarfed the rescue’s price tag.

“The dramatic drop in the stock market that we saw yesterday will have a direct impact on retirement accounts, pension funds and personal savings of millions of our citizens,” Mr. Bush said. “And if our nation continues on this course, the economic damage will be painful and lasting.”

But many House members who rejected the proposal said Tuesday that their consciences were clear.

“I have no regrets for doing my job - none,” said Rep. Elijah E. Cummings, Maryland Democrat. “Sometimes the train needs to be slowed down so that you can get it on track.”

Mr. Cummings - along with Rep. Peter A. DeFazio, Oregon Democrat, and several other liberal colleagues - on Tuesday proposed alternatives to the rescue plan that included changes to federal accounting rules and increasing the Federal Deposit Insurance Corp. limit to $250,000 from $100,000.

By Tuesday afternoon, FDIC Chairman Sheila Bair officially asked Congress for temporary authority to raise the limit by an unspecified amount.

House Minority Leader John A. Boehner, Ohio Republican, praised the proposal, saying Republicans had suggested the higher cap during negotiations on the bailout bill but had been rebuffed by Democrats. Mr. Obama beat Mr. McCain to the punch in declaring the insurance adjustment.

Republicans said the FDIC proposal might attract lawmakers on the left and right who want to help small-business owners and avert runs on banks by customers fearful of losing their savings.

Another proposed change to the bill would call on regulators to modify “mark to market” accounting rules. Such rules require banks and other financial institutions to adjust the value of their assets to reflect current market prices, even if they plan to hold the assets for years.

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