WASHINGTON: All eyes are now on the US House of Representatives after the Senate approved a beefed-up version of the bailout Bill to shore up credit for the beleaguered American financial sector and calm investors throughout the world.
Congressional leaders are cautiously optimistic that the House will not reject the revised Bill as it did an earlier version on Monday, triggering the biggest ever drop on Wall Street and shaking up bourses across Asia and Europe.
The success of the vote, expected as early as today, now rests on House members voting for it as the 'right' rather than the 'easy' thing to do.
'Yes' votes might be more forthcoming now that several sweeteners have been added to the Bill.
The bottom line is that it authorises the Treasury to borrow US$700 billion (S$1 trillion) to buy up toxic mortgages, securities and other devalued financial instruments that have unravelled the financial system and frozen credit markets.
But what started out as a three-page Bill has morphed into a weighty 451-page compromise package.
The Senate - the upper chamber of the US Congress - approved the Bill by an overwhelming 74-25 vote yesterday (Singapore time). The two presidential contenders were among the senators who said aye, after urgent pleas that a failure to pass it would have catastrophic effects on businesses and the economy.
President George W. Bush, who has seemed a helpless lame duck while Congress wrangled over the Bill, applauded the move.
'The American people expect - and our economy demands - that the House pass this good Bill this week and send it to my desk,' he said.
Senate Majority leader Harry Reid was among many who said the Bill will be passed. But House Minority leader John Boehner, whose call for approval on Monday failed to enthuse his fellow Republicans to back the Bill, was less certain.
His spokesman said: 'We believe we have a better chance of passing this Bill, but we'll have to wait and see.'
The new provisions grafted on the original proposal, including a 10-year, US$150.5 billion package of tax proposals, ought to make it more palatable to the Republicans. But the same measure would widen the deficit and does not play as well with the House Democrats.
One element that could help its passage is another clause that raises deposit insurance offered by the Federal Deposit Insurance Corporation to US$250,000 from US$100,000 - a source of comfort for ordinary Americans horrified at the prospect of more bank failures.
All the House seats are up for grabs on Election Day on Nov 4 and sitting lawmakers are sensitive to the calls from their constituencies against the Bill perceived as using taxpayers' money to bail out banks which took foolish risks.
The voting equation remains delicately poised. Assuming those who voted for the Bill on Monday stay faithful, 13 more House votes are needed to pass the Bill.
The presidential candidates, who had thus far offered only lukewarm support for the Bill, are now its champions.
Speaking in the House, Senator Barack Obama said: 'This is not just a Wall Street crisis - it's an American crisis, and it's the American economy that needs this rescue plan.'
Senator John McCain backed it in an e-mail to supporters, warning that 'the dire consequences of inaction will be far more damaging to the economic security of American families and the fault will be all ours'.
