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Senate Debates Bailout

MELISSA BLOCK, host:

From NPR News, this is All Things Considered. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel. First this hour, senators are trying to jump start the economic bailout. They'll be casting what many of them have dubbed a legacy vote tonight. Throughout the day, they debated the $700 billion plan. Many said they don't love the legislation, but they said it needs to pass. After the House of Representatives rejected the package on Monday, senators revised the bill somewhat, but the basic premise remains. The bill allows the U.S. Treasury to buy up bad debt in hopes of easing the credit market. NPR's Debbie Elliott reports from Capitol Hill.

DEBBIE ELLIOTT: So what's changed since Monday night? Many senators say it's the message from back home. Last week, there was a public outcry against taxpayers bailing out the fat cats on Wall Street. Today, Republican John Kyl says there's a growing realization that the economic crisis is hitting closer to home.

Senator JON KYL (Republican, Arizona): A realization that came about when they saw about 10 percent of their stockholdings wiped out with one day of trading on Wall Street.

ELLIOTT: Senate Majority Leader Harry Reid says this is not a bailout for Lower Manhattan but is aimed at helping local merchants who are finding it harder and harder to get credit.

Senator HARRY REID (Democrat, Nevada): I got a call yesterday from a car dealer in Las Vegas saying, I can't buy any cars. People - the inventory we have, if somebody buys a car, most of them can't get a loan. And it's going to get worse, not better, unless we do something.

ELLIOTT: The Senate has tweaked the bill somewhat in hopes of garnering broader support. It would raise the limit on federally insured bank accounts to $250,000 and relax rules that require banks to report their assets at current market value. As an added incentive, the economic rescue package is tacked onto a bill that extends popular tax breaks and provides disaster relief. Reid says no one is happy to be taking this dramatic and expensive step, but they must get it done.

Senator REID: Now is our time to work, not as Democrats, not as Republicans, but as guardians of the public trust to forge a better day ahead.

ELLIOTT: Senate Republican leader Mitch McConnell echoes the call for bipartisan, bicameral action.

Senator MITCH MCCONNELL (Republican, Kentucky): We've demonstrated to the American people that we could deal with the crisis in the most difficult of times, right before an election, when the tendency to be the most partisan is the greatest.

ELLIOTT: President Bush today urged the Senate to take the package very seriously and said he was confident it would pass. But even as the president called lawmakers to rally support for the bill, and Senator John McCain planned to vote for the measure, the Republican National Committee came out with this ad.

(Soundbite of ad)

Unidentified Man: Meltdown. Wall Street squanders our money, and Washington is forced to bail them out with, you've guessed it, our money.

ELLIOTT: And indeed, some Republicans are still skeptical. Alabama Senator Jeff Sessions.

Senator JEFF SESSIONS (Republican, Alabama): I think it's too much of a Wall Street-centric bailout.

ELLIOTT: Despite the reservations of Sessions and others, leaders are confident the Senate will approve the rescue package. Democratic Senator Barack Obama is also back at the Capitol to vote for the bill. Without it, he warns, quote, of a long and painful recession.

Senator BARACK OBAMA (Democrat, Illinois; 2008 Democratic Presidential Nominee) This is not just a Wall Street crisis. It's an American crisis. And it's the American economy that needs this rescue plan.

ELLIOTT: The question is whether by a Friday vote in the House, another dozen representatives will agree. Senate Majority Leader Reid says he would not have moved forward if he didn't think the chance in the House was good. Debbie Elliott, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

NPR National Correspondent Debbie Elliott can be heard telling stories from her native South. She covers the latest news and politics, and is attuned to the region's rich culture and history.