A day after they watched an emergency financial rescue plan collapse in Congress, Barack Obama and John McCain called Tuesday for raising the cap on federally insured bank deposits from $100,000 to $250,000, and lawmakers scrambled to revive a plan they say is needed to stem a financial crisis.
In a surprise move, Senate leaders scheduled a vote on the measure for Wednesday -- but added a tax cut plan already rejected by the House.
Majority Leader Harry Reid, D-Nev., and GOP Leader Mitch McConnell of Kentucky unveiled the Senate plan Tuesday. It also would raise federal deposit insurance limits to $250,000 from $100,000, as the two presidential nominees called for only hours earlier.
The move to add tax legislation -- including a set of popular business tax breaks -- risked a backlash from House Democrats insisting they be paid for with tax increases elsewhere.
But by also adding legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax, the step could build momentum for the Wall Street bailout from House Republicans.
Wall Street, at least, regained hope. The Dow Jones Industrial Average rose 485 points, one day after a record 778-point plunge following the House vote spurning the plan that had been worked out by congressional leaders and the Bush administration.
That rejection count was 228-205, meaning the plan's backers have to turn around 12 votes among the 133 Republicans and 95 Democrats who said no.
CALLS POURED IN
Just as Capitol Hill switchboards had been flooded with calls before Monday's vote, the calls flowed in Tuesday as well, many from constituents whose stock-based retirement accounts were hammered by Monday's record plunge in the Dow. The response led to lawmakers displaying a more conciliatory tone Tuesday as they regrouped after the House vote.
Some lawmakers reported a shift in constituent calls pouring into their offices Tuesday after the market decline. Many callers, they said, want Congress to do something without ``bailing out Wall Street.''
President Bush spoke by phone with both Obama and McCain on the need to get Congress to enact some kind of financial system rescue.
Several Republican senators said it was unlikely that leaders would completely scrap the Bush administration bill and instead would use it as the basic vehicle for debate, with revisions to soften objections. ''It's too late to start all over,'' said Sen. Chris Bond, R-Mo.
Bush, in a televised statement to the nation, renewed his call for congressional action, despite the House vote that gave him one of his worst defeats as president.
''The dramatic drop in the stock market that we saw yesterday will have a direct impact on retirement accounts, pension funds and personal savings of millions of our citizens,'' Bush said. ``And if our nation continues on this course, the economic damage will be painful and lasting.''
The presidential candidates tried to spell out in Main Street terms what would happen if Congress doesn't pass a rescue plan that many voters view as a golden parachute for Wall Street fat cats. Obama stressed that the House's rejection of the plan led Wall Street stocks to lose more than $1 trillion Monday, at least on paper, which hurt ordinary Americans.
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