Wave of House converts jump aboard bailout bill
WASHINGTON — A wave of House converts jumped aboard the $700 billion financial industry bailout Thursday on the eve of a make-or-break second vote, as lawmakers responded to an awakening among voters to the pain ahead of them if stability isn't restored to the tottering economy.
Black lawmakers said personal calls from Democratic presidential nominee Barack Obama helped switch them from "no" to "yes." Republicans and Democrats alike said appeals from credit-starved small businessmen and the Senate's addition of $110 billion in tax breaks had persuaded them to drop their opposition.
"I hate it," but "inaction to me is a greater danger to our country than this bill," said GOP Rep. Zach Wamp of Tennessee, one of the 133 House Republicans who joined 95 Democrats in rejecting the measure Monday, sending the stock market plummeting.
Still, the outcome was far from assured. Vote-counters in both parties planned to huddle first thing Friday morning to compare notes on coming up with the dozen or so supporters needed to reverse the stunning defeat.
Lawmakers were agonizing as they decided whether to change course and back the largest government intervention in markets since the Great Depression. "I'm trying desperately to get to 'yes,'" said Rep. Carol Shea-Porter, D-N.H.
Fears about an economic downturn sent the Dow Jones industrials down nearly 350 points Thursday, three days after Monday's historic 778-point drop. The Federal Reserve reported record emergency lending to banks and investment firms, fresh evidence of the credit troubles squeezing the country
Obama and his Republican rival, John McCain, phoned reluctant lawmakers for their help. McCain, in Denver, predicted the bill would pass the House.
Rep. John Lewis, D-Ga., told a closed-door meeting of House Democrats that he will support the bill after speaking with Obama about it. Other wavering lawmakers said Obama's entreaties had swayed them as well.
Congressional leaders worked over wayward colleagues wherever they could find them.
Rep. Steny Hoyer, the second-ranking House Democrat, said there was a "good prospect" of approving the measure but stopped short of predicting passage _ or even promising a vote. Nonetheless, a vote was expected on Friday.
"I'm going to be pretty confident that we have sufficient votes to pass this before we put it on the floor," Hoyer said.
The top Republican vote-counter, Rep. Roy Blunt of Missouri, did predict the measure would be approved.
"A lot of people are watching," Bush pointed out _ as if lawmakers needed reminding _ and he argued from the White House that the huge rescue measure was the best chance to calm unnerved financial markets and ease the credit crunch. He was calling dozens of lawmakers, a spokesman said.
Minds were changing in both parties in favor of the much-maligned measure, which would let the government spend billions of dollars to buy bad mortgage-related securities and other devalued assets from troubled financial institutions. If the plan works, advocates say, that would allow frozen credit to begin flowing again and prevent a serious recession.
GOP Rep. Ileana Ros-Lehtinen of Florida, said she was switching her "no" vote to a "yes" after the Senate added some $110 million in tax breaks and other sweeteners before approving the measure Wednesday night.
"Monday what we had was a bailout for Wall Street firms and not much relief for taxpayers and hard-hit families. Now we have an economic rescue package," Ros-Lehtinen told The Associated Press.
Republican Rep. Jim Ramstad of Minnesota also switched to "yes," partly because the Senate attached the bailout to legislation he spearheaded to give people with mental illnesses better health insurance coverage.
Rep. Gresham Barrett, R-S.C., also said he'd back it.
Democratic Rep. Emanuel Cleaver of Missouri was switching, too, said spokesman Danny Rotert, declaring, "America feels differently today than it did on Monday about this bill."
And Democratic Rep. Shelley Berkley of Nevada said she would back the bill after business leaders in her Las Vegas-area district made it clear how much it was needed. She said, "There isn't a segment of the population that hasn't been slammed and is not asking for some relief."
Rep. Elijah Cummings, D-Md., said he was on the verge of voting "yes," based on conversations with Obama. "I've got a man who I'm hoping will be president who's saying that's he's going to do the very things that I want done," he said. "It makes me feel a lot better."
Rep. Bobby Rush, D-Ill., also said Obama was asking him to reconsider his vote. "I'm seriously listening," Rush said.
Emboldened by the feverish bidding for votes, other members of both parties were demanding substantial changes to the legislation before they would vote for it. A group of Republican opponents indicated they'd back it if the price tag were slashed to $250 billion and several special tax breaks added by the Senate _ including for children's archery bow makers, imported rum producers and racetrack owners _ were removed. Democrats wanted to add a way to pay for the bailout and more help for homeowners staring at foreclosure.
Speaker Nancy Pelosi, D-Calif., said no, such revisions were impossible because they would slow the measure's enactment and further shake markets.
"I don't think that any changes here will do what we need to do, which is right now to send a message of confidence to the markets that Congress will act," she said.
The Senate breathed new life into the measure Wednesday after the stinging House defeat, voting 74-25 to approve the bailout, with additions designed to appeal to key constituencies. Business lobbyists were also inundating Capitol Hill in a rush to win over wavering lawmakers in both parties.
The changes helped satisfy some Republican critics, but they angered conservative "Blue Dog" Democrats who are concerned about swelling the deficit. Still, Hoyer predicted the number of Democratic defectors "is going to be minimal."
In efforts to appease GOP opponents, the Senate added a provision to raise, from $100,000 to $250,000, the limit on federal deposit insurance.
House Republicans also cheered a decision by the Securities and Exchange Commission this week to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market.
The developments Wednesday prompted one Republican, Rep. John Shadegg of Arizona, to say he would support the new bill.
Bush, meeting with business executives at the White House, said increasingly tight credit markets are not just hitting big banks in New York City but threatening the existence of small businesses across the country.
The modified Senate bill extends several tax breaks popular with businesses, provisions that are favorites for most Republicans. It would keep the alternative minimum tax from hitting 20 million middle-income Americans, which appeals to lawmakers in both parties. And it would provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.
Help for rural schools was aimed mainly at lawmakers in the West.
Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others. Ros-Lehtinen singled it out as one reason she changed her mind.
Democratic leaders circulated data showing which states benefit most from an extension of a tax break for homeowners who do not itemize their tax returns. Texas, Florida, California and Pennsylvania ranked among the highest. The leaders hope the measure will bring support from black lawmakers, many of whom voted "no" earlier this week, among others.
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Associated Press writers Terence Hunt, Ben Feller, Matthew Daly, Alan Fram, Sam Hananel, Kimberly Hefling, Andrew Taylor and Erica Werner contributed to this report.
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JULIE HIRSCHFELD DAVIS | October 2, 2008 11:41 PM EST |
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