The shifting tide of public anger may yet save the controversial $700 billion financial bailout passage.
When the House of Representative overwhemlingly rejected President Bush’s package Monday, some felt it was a Congressional caving to anger back home at the use of taxpayer dollars to save big financial firms.
But as the reality of Monday’s action sank in, public reaction shifted and reluctant Representives now appear ready to take action, any action, to calm the situation.
Prodded by a wave of angry calls from constituents, congressional leaders dialed back partisan bickering over the $700 billion Wall Street rescue plan yesterday and advanced modest changes to the legislation in an effort to win over House Republican holdouts.
Leaders of the Senate, where most members have indicated support for the plan, said they would seek a vote on a revised rescue package tonight that would include a one-year increase in Federal Deposit Insurance Corp. caps for bank and credit union accounts, extensions of numerous business tax breaks that have expired and a fix to the alternative minimum tax for individual taxpayers.
The FDIC and tax provisions could make the bill more appealing to House Republicans, but they could also prove unpalatable to a coalition of conservative Democrats who have long opposed the tax changes. The Senate banking committee’s chairman, Christopher J. Dodd (D-Conn.), who helped negotiate the revised package, expressed confidence that the revisions would yield a majority of House votes.
Although U.S. financial markets swung sharply upward yesterday, with the Dow Jones industrial average gaining 485.21 points, Monday’s record 778-point loss, which was fueled by the House’s rejection of the rescue plan, led to angry calls to lawmakers from constituents from across the political spectrum.
There was a widespread sense on Capitol Hill that Monday’s vote had snapped the public to attention about the potential repercussions of Congress’s failure to act. Last week, House and Senate offices were bombarded with calls from opponents who viewed the bill as a Wall Street boondoggle. That call pattern shifted sharply after Monday’s vote, aides to lawmakers in both parties said. "It’s completely in the other direction now," said Michael Steel, a spokesman for House Minority Leader John A. Boehner (R-Ohio).