Senate May Try to Revive Bank-Rescue Bill by Tomorrow

Senate May Try to Revive Bank-Rescue Bill by Tomorrow (Update1); By Alison Fitzgerald and Matthew Benjamin; Bloomberg; 30 September 2008.

The U.S. Senate will try to salvage a $700 billion financial-rescue package after the measure was defeated in the House of Representatives. The lawmakers won't have a lot of room to negotiate.

While they need to tweak the legislation enough to win over reluctant Republicans, they'll risk losing votes from Democrats if they veer too far from the delicate compromise that congressional leaders hammered out with the U.S. Treasury.

``They're not going to totally revamp the bill,'' said Pete Davis, president of Davis Capital Investment Ideas in Washington, who spoke to House and Senate leaders yesterday. ``They'll make some minor changes and pass it. This is all about political cover.''

The House rejected the legislation yesterday in a 228 to 205 vote, sending the Dow Jones Industrial Average tumbling 778 points for its biggest point drop ever and erasing more than $1 trillion in market value. The Standard & Poor's 500 Index fell 8.4 percent, the most since Oct. 26, 1987. S&P 500 futures rebounded today, rising 3.1 percent at 11:03 a.m. in London.

Senators say they have no choice but to revive the measure, which is designed to restore confidence in the nation's banking system.

``We don't intend to leave here without the job being done,'' said Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, who said the senators may deal with the bill as early as tomorrow.

Read the rest here.

Comment: One of the more troubling aspects about this whole crisis has been that Congress and the Bush Administration have not made any case demonstrating that failing to support a bailout will plunge this nation, not to mention the world, into economic crisis. But one thing I know is that there are a number of economists saying it won’t. So what the hell is going on?

Without any transparency, as was with the Immigration Bill and the Patriot Act, Congress is ramming down our throats a bill that will surely mean economic disaster and less market freedom; which in the end definitely means less personal freedom because taxes are going to go through the roof.

The only course of action I see that will stop this spiraling descent is for the 50 States to wake up and confront the Federal Government. Maybe calling for a Constitutional Convention might be a bit drastic and ruinous as I did yesterday, but something has to be done, and it’s not going to come from Washington that’s for certain.

I would recommend right now for each State legislative body to find some way to subpoena their respective US Senators and challenge them on their own ground. Demand they answer for the disastrous course they are allowing the Bush Administration to chart. And face it; Congress is too weak to impeach Bush so we must fall back to States to save Republic. The States must act today.