U.S. Senate Passes Economic Bailout Bill

After the stunning failure in the House of Representatives, the U.S. Senate on Wednesday evening, according to WSJ – approved a revised $700 billion bailout plan for the financial industry. The plan, which was passed by a wide margin of votes of 74-25 in favor, is vital to ensure the proper functioning and the reinvigoration of the struggling financial markets worldwide.

The Senate approved the new bill after two “sweeteners” – a tax cut and extended federal protection for bank deposits – were added in order to attract votes from constituencies. At its heart however, the bill even though improved by provisions – remains still the same ; a plan to allow the government to spend $700 billion to buy up the financial sector’s distressed, mortgage related assets – which 133 Republicans and 95 Democrats could not vote for on Monday.

The White House and key lawmakers warned earlier that economic crisis will become a full-fledged disaster if the rescue plan is rejected.

President Bush on Wednesday praised Senate for passing the bill and urged the U.S. House of Representatives to quickly do the same.

“With the improvements the Senate has made, I believe members of both parties in the House can support this legislation,” Bush said in a written statement. “The American people expect — and our economy demands — that the House pass this good bill this week and send it to my desk.” [Reuters]

Senate Majority Leader Harry Reid (D-Nevada) said he expected the House would pass the bill, a sentiment echoed by other senators. A spokesman for Rep. John Boehner (R-Ohio), the minority leader, said: “We believe we have a better chance of passing this bill than the one on Monday, but we’ll have to wait and see.”

Secretary Henry Paulson, who on Monday expressed his disappointment on the plan’s rejection, praised the Senate’s approval and asked the House to act swiftly to ratify the rescue plan.

The bill will be taken up in the House Friday.

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