WASHINGTON (AFP) — The US Senate casts judgment Wednesday on a reworked 700-billion-dollar Wall Street rescue, with the House of Representatives, which killed an earlier bailout bill, under fierce pressure to follow suit.
Senate leaders raised hopes that the revised plan could be on President George W. Bush's desk by the weekend and ease a deepening credit freeze amid fears of global economic contagion spurred by the first House vote on Monday.
Bush urged lawmakers to promptly approve the package to "stabilize" volatile markets as experts warned that the credit crunch was beginning to seriously harm day-to-day running of the economy.
"The Senate's going to take this bill up tonight, I'm hopeful they'll pass it, and then the House will have a chance to vote on it Friday morning," Bush said.
"The bill's different, it's been improved, and I'm confident it'll pass."
But Democratic House Majority leader Steny Hoyer sounded a note of caution, appearing to indicate the bill would only be brought to a vote if it looked certain to pass.
"If there is bipartisan, majority support for the Senate package, we will likely bring it to the floor on Friday," he said in a statement issued moments after Bush spoke.
Democratic presidential candidate Barack Obama arrived in Washington and his Republican rival John McCain was also rushing back from the campaign trail in a bid to bolster the bill in the dramatic Senate vote.
Senate Majority leader Harry Reid meanwhile said he believed the measure would pass, and upped pressure on the House to act quickly.
"I would not move forward on this if I didn't think the chance in the House was good," Reid told reporters, and warned that a major US insurance firm, which he did not name, could go bankrupt without prompt congressional action.
"I am confident that we will get a good vote and a good vote in the Senate is anything that passes," he said.
The surprise Senate vote was called after Democratic and Republican negotiators agreed on the terms of the reframed bailout, which includes extended tax cuts for businesses designed to woo Republicans in the House.
In another sweetener, the measure, which requires 60 votes in the 100-member Senate to pass, raises the ceiling on federal insurance for bank deposits from 100,000 dollars to 250,000 dollars.
It retains most facets of the original plan which gives Treasury Secretary Henry Paulson the power to buy up troubled mortgage-related assets in troubled banks and includes restrictions on "golden parachute" payoffs for CEOs.
Opponents of the bill have balked at handing that much power to one man, and reject the notion of using taxpayer money to bailout out disgraced Wall Street firms.
New talks were underway in the House meanwhile on tweaking the package to ensure it gets through on a second vote, after lawmakers sensationally killed off the original bill on Monday by 228 to 205 votes.
Hoyer raised concerns that some of his fellow Democrats who originally voted for the bailout might reject it over the Senate's extension of expired tax breaks for businesses.
"There's no doubt the tax package is very controversial. The Senate, in my opinion, is adding that on because they think that's the only way they can get it passed," Hoyer told NBC.
Conservative Democrats previously rejected extending such tax breaks unless they can be offset in other areas of the budget in an attempt to curtail the growth of the deficit.
The bailout bill is expected to encounter less resistance in the Senate than the House, partly because only a third of the chamber's lawmakers are up for reelection on November 4.
Every House member faces voters, and many lawmakers in tight reelection fights opposed the package on Monday.
But the subsequent plunge of stocks, which took many 401(k) market-based pension plans down with them, may have altered the political calculation.
After Monday's stocks plunge, securities staged a rebound on Tuesday but the word on the markets Wednesday was caution, as the Dow Jones Industrial Average pared heavy opening losses and ended down 13.22 points (0.12 percent) at 10,837.44 at the closing bell.
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