The Senate is scheduled to vote tonight on a bill that includes the Bush administrations $700 billion rescue of financial institutions as well as provisions to raise the Federal Deposit Insurance Corp.s insurance cap on bank deposits to $250,000 from $100,000.
The legislative package also includes provisions to provide tax relief for businesses and middle-class taxpayers, and promote alternative energy programs, according to a news release from Senate Majority Leader Harry Reid, D-Nev.
The legislation is among a series of bills that the Senate is scheduled to begin voting on at 7:30 p.m. EDT.
Pending Senate approval, the House is likely to vote on the bailout bill Friday, said Brendan Daly, spokesman for House Speaker Nancy Pelosi, D-Calif.
The markets reacted pessimistically to the news in early trading before recovering by midday, although the Dow Jones industrial average still closed down 19.59, or 0.18, at 10,831.07, according to preliminary results. The Dow was down 210 points in midmorning trading.
Senate Democrats and Republicans believe it is essential that we work quickly on this important legislation to restore confidence to our financial system and strengthen the economy, Mr. Reid said in the release. We have worked in a bipartisan way to do so, and it is my hope that with the improvements we have made to the administrations proposal, the Senate will pass this legislation and the House of Representatives will follow suit soon thereafter.
Presidential candidates Sens. Barack Obama, D-Ill., and John McCain, R-Ariz., who both support the legislation, are expected to return to Washington to participate in tonights vote, Senate Republican Leader Mitch McConnell, R-Ky., told reporters this afternoon.
Were optimistic, Mr. McConnell added. A good vote coming out of the Senate side will be helpful on the House side.
The hope is the increase in deposit insurance limits will bring along several members of the House, said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, which represents large financial institutions.
Mr. Talbott said the tax breaks in the Senate package include continuing the extension of relief from the alternative minimum tax for many individual taxpayers, along with tax credits for solar and other forms of environmentally sound energy.
He said the tax losses from the proposals would be partially offset by curtailing tax breaks for oil companies and banning hedge fund managers from deferring taxes on profits earned in offshore accounts.