The U.S. Senate is planning to vote today on a modified version of the $700 billion financial bailout plan that was struck down by the U.S. House of Representatives Monday in a 228-205 vote.
The Senate version of the legislation, which will require 60 votes to pass rather than a simple majority, proposes to raise the FDIC and National Credit Union Share Insurance Fund deposit insurance limits from $100,000 to $250,000 per depositor per bank. A vote is expected at about 7:30 p.m. Eastern Time today.
This provision was also pitched by a group of House Democrats in an alternative plan announced Tuesday (see Inman News).
In addition, the Senate version of the legislation would temporarily raise the borrowing limits at the Treasury for the FDIC and for the credit union insurance fund. Sheila Bair, FDIC chairwoman, has said she would support this temporary rise in coverage. And the Senate version adds some tax breaks for businesses and for renewable energy — The Associated Press reports that the bill includes about $100 billion worth of tax breaks.
Officials in both parties are predicting passage of the massive measure, which will initially give the Treasury $250 billion to buy mortgages and other "toxic" assets that are contributing to the credit crunch from financial firms. The plan requires that the president certify additional sums of $100 billion and $350 billion — Congress has disapproval authority for the latter.
Presidential candidates and U.S. Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., have both announced support for the Senate legislation and are expected to be present for the vote. Vice presidential candidate Joe Biden, D-Del., is also expected to participate in the vote.
The National Association of Home Builders issued a statement today urging Congress to support the latest plan now "to avoid a complete meltdown in financial markets."
Sandy Dunn, NAHB chairman, said in a statement that the Senate vote and subsequent vote in the House may be "our last chance to save the global economy from a very deep and painful recession, or worse," citing sinking home prices and growing foreclosures.
"It’s time to set aside politics, self-serving interests and ideology and unite as Americans in support of this legislation," Dunn stated.
The National Association of Realtors, too, has been lobbying in support of a congressional fix for the financial crisis.
"There will not be an economic recovery without a housing recovery, and we hope the Congress will move as expediently as possible to resolve their differences," said NAR President Richard F. Gaylord in a statement issued after the earlier plan failed in the House. "NAR will continue to advocate this legislation, which will benefit Main Street by restoring market liquidity to the financial markets."
Federal aid for financial firms has been a tough sell for the American public. According to a survey conducted from Sept. 27-29 by The Pew Research Center for the People and the Press, 45 percent of respondents said the government effort to invest billions of dollars to keep financial institutions and markets secure is "the right thing to do," while 38 percent said it is the wrong thing to do and 17 percent either didn’t know or didn’t respond.
That compares to a similar study conducted a week earlier, in which 57 percent of respondents said the government is doing the right thing versus 30 percent who said it is doing the wrong thing.
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