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Congress Weighs Next Move On Financial Bailout

Calm prevailed in the markets and on Capitol Hill on Tuesday, a day after the House rejected the $700 billion financial bailout plan.

The stock market rallied on renewed hopes that Congress would regroup and try again. Most House members took a two-day break for the Jewish New Year. Senators promised that lawmakers would indeed be back with a bill later this week, after they tweaked it to pick up more support.

For the ninth day in a row, President Bush weighed in early from the White House on the need for Congress to deliver a financial rescue package.

"I recognize this is a difficult vote for members of Congress," he said. "Many of them don't like the fact that our economy has reached this point, and I understand that. But the reality is that we're in an urgent situation, and the consequences will grow worse each day if we do not act."

At the Capitol, Senate Majority Leader Harry Reid (D-NV) said he had every intention of acting.

"We're all committed to keeping the progress on this rescue package moving forward," he said.

Senate Minority Leader Mitch McConnell (R-KY) went so far as to set a deadline.

"We will get the job done," he said. "We will get it done this week. And I think, hopefully, that will reassure the American people that Congress can rise to the occasion, act like grown-ups, if you will, and get the job done for all of our people."

Driving the resolve to try again for a bailout package is the fear among many lawmakers that the nation's financial system could soon collapse if nothing is done.

New Hampshire Republican Sen. Judd Gregg, who negotiated the now-rejected bailout on behalf of his caucus, warned that Congress cannot wait any longer.

He said the consequences of not passing the measure are extraordinary "and will be so detrimental to our country and to our people that it would be totally irresponsible of us to not take this action."

Many lawmakers who voted against the bailout, however, did so after being deluged with calls and messages from constituents opposed to the rescue package.

New Mexico Republican Sen. Pete Domenici, who is retiring this year, called on those constituents Tuesday to give his colleagues some peace.

"Citizens, turn some of your members loose who you're holding hostage by telegram and phone call to allegations that are not right, that are untrue," he said.

But other lawmakers continue to oppose the bailout bill on its merits.

Sen. Jim Webb (D-VA) said there is a real need to rethink what's in the bill.

"There are a lot of people who are not playing politics, who do understand the problem, who are doing their job, who still have had grave concerns about the approach that has been taken with this proposed solution," he said.

Presidential candidates John McCain and Barack Obama both urged action Tuesday. They suggested one way to broaden support would be to raise the $100,000 limit for federally insured bank deposits, an action that federal authorities endorsed.

Senate banking committee Chairman Christopher Dodd (D-CT) has been a leader in the effort to come up with a rescue package. Dodd said Tuesday he's fairly confident Congress will be able to have another vote soon.

"I know that those that cast votes yesterday are having some second thoughts about the condition they placed us in and are trying to find a way in which to get back on track again," he said. "And so I'm very optimistic we can do that.

"I know the White House is now engaged much more aggressively than it has been on this issue, which I welcome. I know that the leadership of the House is also working on this, and I don't want to predict things with any great certainty, but I'm quite confident we're moving in the right direction and that we should end up with a very positive result within the next 24 or 48 hours."

Dodd added, however, that no conclusions have been reached about whether the House or Senate will act first.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

David Welna is NPR's national security correspondent.