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The Senate will vote later today on a revised bailout plan.

Senate Majority Leader Harry M. Reid (D-Nev.) called the Senate's revised legislation "the best thing to move forward." Reid was joined on the floor by Senate Minority Leader Mitch McConnell (R-Ky.), who said the plan was "one of the finer moments in the Senate."

A senior House Republican adviser, who spoke on the condition of anonymity to talk about private strategy, said the addition of the FDIC cap increase and the tax credits -- without any corresponding tax increases -- could have "substantial appeal" in that caucus. Boehner was consulted by Senate leaders and gave his approval, the aide said.

But the addition of the tax provisions may entail new risks in the House, which returns to action Thursday. Speaker Nancy Pelosi (D-Calif.) responded tepidly to the Senate announcement, and it remained unclear when the House would would consider the revised bill, though a vote is likely by week's end. "The Senate has made a decision about how to proceed and what can pass that body. The Senate will vote . . . and the Congress will work its will," Pelosi said.

I'm honestly a little confused. I believe the Constitution requires all money bills to start in the House. Perhaps this Senate vote would be to test the waters, then it would go to the House and back to Senate.

The FDIC provision, which would raise the insurance cap for bank accounts to $250,000 from the current $100,000, was discussed during weekend negotiations in Pelosi's office but was not included in the final package. But in what negotiators from both parties considered a critical breakthrough, the largest banking lobby in Washington embraced the idea. "We now see this as a way to help the package pass," said Ed Yingling, president of the American Bankers Association.

While the move would result in banks paying higher fees on their insurance premiums, advocates say it would provide important assurances to small businesses that keep large sums of cash in bank accounts and are reeling from the credit crunch. "We are having an awful lot of people come into banks and ask questions," Yingling said.

Posted by edelfenbein at October 1, 2008 1:39 AM