Evidence that the credit crisis is spreading prompts lawmakers to try anew.
Washington – The tide is shifting over prospects in Congress for an epic $700 billion financial rescue package.
The reason: Voter anger over a “bailout” for Wall Street, which nearly shut down switchboards on Capitol Hill last week, is being eclipsed by new evidence that the credit crisis is hitting Main Street – and is on track to get worse.
“I got a call yesterday from a car dealer in Las Vegas saying, ‘I can’t buy any more cars.’… If somebody buys a car, most of them can’t get a loan,” said Senate majority leader Harry Reid on Wednesday.
The stunning defeat of the financial rescue plan in the House on Monday sent the stock market plunging and prompted renewed efforts on both sides of the aisle to find a compromise. At the same time, business groups stepped up an all-out offensive to muscle a bill across the line this week.
“The pain on Main Street is real. It’s being felt,” says Bruce Josten, chief lobbyist for the US Chamber of Commerce, which has been mobilizing local chambers across the country to weigh in on this vote.
“It’s been a 24/7 exercise in improvisation. There’s no playbook for a crisis like this,” he adds. “Members are beginning to realize that, despite ideological reactions, they’d better do something.”
In a bid to move a bill to President Bush’s desk by end of week, the Senate opted to vote on a compromise bill Wednesday evening. The new deal adds a package of tax breaks for business, as well as an increase in the government’s $100,000 cap on insuring bank deposits.
“We will have 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,” said Senate Republican leader Mitch McConnell, who predicted that the revised plan would pass.