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Senate bailout vote puts pressure on House Republicans, aides say

  • Story Highlights
  • NEW: Rep. Charles Rangel thinks "sweeteners" will smooth passage in House
  • Bailout package passed Senate 74-25 on Wednesday with bipartisan support
  • The bailout failed 228-205 on Monday in the House
  • President Bush urges the House to pass an "improved" bill
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WASHINGTON (CNN) -- The strong bipartisan Senate vote for a $700 billion economic bailout package will put more pressure on Republican members to back the measure if it comes up for a vote in the U.S. House, Republican leadership aides said.

The Senate approved the modified financial rescue plan in a 74-25 vote Wednesday night.

Democratic leadership aides said the House vote could occur at midday Friday. A vote on the bailout package on Monday failed in the House after a majority of Republican members voted against the bill.

"The strong vote is helpful. We believe the House has a better chance to pass this bill than the one it considered on Monday," a Republican leadership aide said after Wednesday night's vote. "Having said that, we're going to need more Democrat and Republican votes to pass this bill in the House." Follow the plan with the Bailout Tracker »

Another Republican leadership aide said the Senate vote "puts more pressure on the House to get the bill done."

Congressional leaders on Wednesday added "sweeteners" to the financial bailout plan to entice enough House members, particularly Republicans, to pass the plan, which failed in the House on Monday.

Senate bailout bill

The Senate bill passed Wednesday night included measures that:
  • Allow Treasury Secretary Henry Paulson to buy up to $700 billion in bad mortgage-related securities and other bad assets.
  • Allow the Treasury Department to modify mortgage terms to help homeowners avoid foreclosure.
  • Permit the government to receive equity in companies it helps so taxpayers get a share of any future profits.
  • Restrict executive pay for companies aided by the program.
  • Create an independent oversight board to oversee the Treasury Department program.
Source: Senate Banking Committee

The measures -- a mix of tax extensions, an increase in federal deposit insurance and other measures -- include many items that are appealing to Republicans.

President Bush on Thursday urged the House to pass an "improved" bill.

Bush said the plan "has got the best chance" to help small-business owners function.

Rep. Barney Frank, chief Democratic negotiator of the bill in the House, said the House has a better chance of passing the bill the second time around.

"The reality has hit some members," Frank said late Wednesday, adding, "The main change is reality. It's not possible now to scoff at the predictions of doom if we don't do anything." Video Watch reaction to the Senate's passage of the bill »

Speaker Nancy Pelosi indicated the House "will act in a bipartisan way to restore market confidence as well as Main Street's confidence in our economic future."

The modified bailout package included the core measures the House rejected -- a plan that would allow Treasury Secretary Henry Paulson to buy up to $700 billion in bad mortgage-related securities and other bad assets that are undermining credit markets worldwide -- as well as a mix of other measures that previously passed in the Senate.

The bailout plan has new provisions, including an increase in the Federal Deposit Insurance Corp. cap from $100,000 to $250,000. It makes $250 billion immediately available to purchase bank assets, leaving $100 billion at the president's discretion and $350 billion subject to congressional review.

The bill also includes a "mental-health parity" provision, which would require health insurance companies to cover mental illness at parity with physical illness.

Because tax bills must originate in the House, the Senate attached the rescue plan to a bill that deals with renewable energy tax incentives. This allowed the Senate to vote before the House to approve a bailout bill.

"I would not have moved forward on this if I didn't think the chance in the House was good," said Senate Majority Leader Harry Reid, D-Nevada.

House Majority Leader Steny Hoyer, D-Maryland, said Wednesday afternoon that he would bring the Senate bill to the House floor "if there is bipartisan majority support" for the package.

"I'm going to be talking to the Republican leadership -- Mr. [John] Boehner, Mr. [Roy] Blunt -- to see where they are on votes before we bring it to the floor," Hoyer said Wednesday on CNN's "Situation Room."

Rep. John Boehner of Ohio, the top Republican in the House, believes the additional measures will make it easier to pass the controversial bill, a spokesman said.

So does Rep. Charles Rangel, D-New York, who chairs the Ways and Means Committee.

"The extenders and energy package, and the mental health and the AMT (alternative minimum tax) kind of guarantees it's going to go through," Rangel said.

But the additional tax extensions meant to persuade some House Republicans to switch their votes in favor of the bill could cause some fiscally conservative, or "Blue Dog," Democrats to drop their support because the tax cuts would drive up the federal deficit.

"When markets are poisoned, you demand the best antidote, not yield to President Bush's take-it-or-leave-it demand," said Rep. Lloyd Doggett, D-Texas.

Hoyer, the No. 2 Democrat in the House, said he wasn't pleased the tax exemptions were added to the bill and admitted they may result in fewer House Democrats supporting the proposal.

"There's no doubt the tax package is very controversial. The Senate, in my opinion, is adding that on because they think that's the only way they can get it passed," Hoyer told NBC on Wednesday.

The Senate vote came two days after the House voted against the measure, 228-205. A majority of House Democrats voted for the bailout package, 140-95, but a majority of Republican members voted against the bill, 133-65. Video Watch Rep. Paul oppose the bailout package »

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Before Monday's vote, House members were bombarded with constituent calls in opposition to the bill. The calls to one Republican opponent of the measure, Rep. Mike Pence of Indiana, were running 85 percent to 90 percent against the bailout, said Bill Smith, Pence's chief of staff.

The servers hosting the Web sites of the House and its members were also overwhelmed with millions of e-mails, forcing administrators Tuesday to implement the "digital version of a traffic cop" to handle the overload -- for the first time ever. Video Watch how opposition is running high »

CNN's Jessica Yellin, Deirdre Walsh, Carol Costello and Scott J. Anderson contributed to this report.

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