Bailout Bill Sent Back to House After Senate Passage Oct. 2 (Bloomberg) -- The U.S. Senate passed a $700 billionfinancial-market rescue package loaded with inducements for theHouse of Representatives to approve the measure following itsrejection of an earlier version. The legislation, approved last night on a 74-25 vote,authorizes the government to buy troubled assets from financialinstitutions rocked by record home foreclosures. It contains twoprovisions favored by House Republicans: One raises the limit onfederal bank-deposit insurance; the other reiterates theauthority of securities regulators to suspend asset-valuing rulesthat corporate executives blame for fueling the crisis. The bill's proponents cited the record 778-point drop in theDow Jones Industrial Average after the House's 228-205 defeat ofthe legislation Sept. 29 as evidence of the urgency to stabilizethe banking system. They suggested that the market reaction mayspur some House Republicans to change their minds when the billcomes to a vote, likely tomorrow afternoon. ``The big drop'' in the Dow Index ``really had a chillingeffect on a lot of our members and a lot of their constituents,''House Republican Leader John Boehner said on Fox News. Withchanges made by the Senate, the legislation ``has a much betterchance'' of passage this time, he said. `Signal to Markets' Senate Banking Committee Chairman Christopher Dodd, aConnecticut Democrat, said he hoped the vote ``will send a verystrong signal even to the Asian markets and others.'' The dollar rose against the euro, approaching a one-yearhigh, after the Senate approval, bolstering expectations the U.S.will act faster than Europe to address the seizure in creditmarkets. The dollar advanced to $1.3883 per euro at 12:46 p.m. inLondon, from $1.4009 late yesterday in New York. Asian stocks and U.S. futures fell on concern the packagewon't be enough to avert a recession, with futures on theStandard & Poor's 500 Index falling 1.1 percent and the MSCI AsiaPacific Index lost 1.3 percent. Europe's Dow Jones Stoxx 600Index added 1.2 percent to 260.75 as of 12:46 p.m. in London. The extra measures may help sway some Republicans. ``They only need 12 votes,'' Kansas Representative ToddTiahrt, who voted against the bailout, said in an interview withBloomberg Television. ``If they put these few fundamental reformsin there,'' congressional leaders ``would easily get enough votesto pass the legislation'' he said before the Senate includedthose provisions in the package. Targeting Lawmakers Democratic supporters of the bill are targeting lawmakerssuch as Illinois Representative Bobby Rush, who twice changed hisvote in the House roll call. Rush ended up being among the 21members of the Congressional Black Caucus to oppose thelegislation. The caucus scheduled a meeting today to discuss thechanges made by the Senate. Rush wasn't available to comment onhis vote. Still, House passage is far from certain. House Majority Leader Steny Hoyer told MSNBC News yesterdaythat no Democrats who opposed the measure earlier this week havepledged to back it. ``We don't have any more Democrats at thishour,'' he said. Some Republicans said they also weren't budging. ``The bill that they are going to send back is the same billthat I voted against two days ago,'' Representative Joe Barton ofTexas told Bloomberg Television. ``Why would I turn around andvote for it tomorrow evening or Friday?'' Bush Presses for Passage President George W. Bush said in a written statement afterthe vote that ``the bill the Senate passed is essential to thefinancial security of every American.'' He said the House shouldfollow suit in approving the proposal. Bush is slated to meet with U.S. business representativesthis morning, including members of the Chamber of Commerce andthe National Association of Manufacturers, to urge their supportin pushing for House passage, the White House press office said. The bill was a bipartisan effort, with 40 Democrats, 33Republicans and independent Joe Lieberman of Connecticut votingfor it. The two presidential nominees, Democrat Barack Obama andRepublican John McCain, returned from the campaign trail to votefor the plan. The Senate also sweetened the measure for Republicans byauthorizing the government's purchase of troubled assets with a$149 billion package of tax breaks. They would spare 24 millionhouseholds from a $62 billion alternative minimum tax and extend$17 billion in benefits to companies that produce alternativeenergy. Yet Hoyer warned there was a possibility that someadditional Democrats may oppose the legislation because of thetax breaks, which aren't offset with spending cuts. ``There are people who are upset that we are making thedeficit worse as we try to stabilize the economy,'' he toldreporters. Hoyer said he was ``personally disappointed' by theSenate's decision to include the tax legislation in the package. Blue Dogs Twenty-four of the 44-member Blue Dog Coalition of fiscallyconservative Democrats voted for the rescue package on Sept. 29.Four of them said yesterday they'll continue to back the bill,even though their caucus derided the Senate's tax measures asirresponsible as recently as Monday. ``I will vote for the package coming from the Senate,'' saidOklahoma Representative Dan Boren. Other members of the coalitionwho voiced support included Representative Jane Harman ofCalifornia, Representative Jim Marshall of Georgia andRepresentative Jim Cooper of Tennessee. Added to the rescue plan this week is a temporary increasein the limit on federal deposit insurance to $250,000 from$100,000 aimed at discouraging people from pulling their moneyout of banks. The Senate bill also reiterates the U.S. Securities andExchange Commission's authority to suspend an accounting rulethat bankers and other corporate executives say exacerbates theirtroubles. Ease the Rule The so-called fair-value standard requires companies toreview assets and report losses if their values decline.Lawmakers, the American Bankers Association and companiesincluding American International Group Inc. have urged the SEC tosuspend or ease the rule, saying it forces firms to report deeperlosses than needed on assets such as subprime mortgages. Representative Rahm Emanuel of Illinois, the No. 4 HouseDemocrat, said it was likely the Democratic vote total in theHouse will change. ``At the end of the day, I doubt we lose Democratic votes intotal,'' Emanuel said. ``We lose some and will pick up others.The question now will be how many Republicans come to the tableto help solve this crisis.'' To contact the reporters on this story: James Rowley inWashington at [email protected] andNicholas Johnston at [email protected] Last Updated: October 2, 2008 08:24 EDT