UPDATE: White House:Rescue Bill Changes Boost Odds Of Passage
By Henry J. Pulizzi, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The market-rescue package that failed in the House of Representatives this week stands a better chance of passage now that the Senate has added a number of provisions, the White House said Wednesday.
The Senate will vote on the updated legislation later Wednesday. The measure now would boost federal deposit insurance limits and include several tax breaks - changes implemented to help sway skeptics in both political parties.
White House spokesman Tony Fratto said the bill has been modified "in a way that we believe significantly improves the chances of ultimately being passed by both chambers and finding its way to the president's desk."
The Senate bill would raise the Federal Deposit Insurance Corp. insurance limit on most bank accounts to $250,000 from $100,000 for one year. The bill also will include the Senate version of an extension to a series of renewable energy and other business tax credits, as well as an extension of a fix for the alternative minimum tax.
Fratto said the administration believes the FDIC insurance-cap increase is "an important improvement." The White House also supports the bill's tax provisions but doesn't think they should be offset, which could raise opposition from fiscally-conservative Democrats in the House.
Bush is continuing to aggressively lobby for the measure, calling senators to seal their support. Fratto, who didn't name the lawmakers on Bush's call list, said the conversations so far have been "very positive," with senators conveying a sense of urgency to address the financial crisis.
"We think we can get this legislation across the finish line," Fratto said, " but we're going to keep working today, and we're going to work tomorrow, when the House takes it up."
Bush is having lunch Wednesday with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, the chief salesmen for the rescue package. The administration has been criticized for failing to adequately promote a plan that has come to be viewed by the public as a bailout of Wall Street.
Fratto said he believes Bush still has "a great deal of influence" in the debate.
In addition to Bush, Fratto said lawmakers are hearing complaints from businesses about strains from the credit crisis, which he said "is affecting real Americans out there."
The U.S. crisis has sparked criticism from some U.S. allies, who say a lax regulatory environment helped spawn a culture of debt. Asked about the criticism, Fratto said financial leaders should get together to work on rules that protect investors without inhibiting global money flows.
"I would say better global regulations, not necessarily tighter global regulations," Fratto said. "We want them to be better and more effective, and we want to see a whole lot more transparency in how investment capital moves around the world."
But he offered a broad defense of U.S. financial institutions.
"There is no question at all that the U.S. economy and the U.S. financial markets have contributed greatly not just to American growth, but to global growth over the past 15 years, and a lot of very important innovations," Fratto said. "To stand here and just dump on what that industry has done because of this crisis is, I think, a bit unfair."
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@ dowjones.com
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(END) Dow Jones Newswires
10-01-081300ET
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