The Senate takes over and will vote on a tweaked bailout bill tonight.

The Senate takes over and will vote on a tweaked bailout bill tonight.

The Senate takes over and will vote on a tweaked bailout bill tonight.

A summary of what's in the major U.S. newspapers.
Oct. 1 2008 6:33 AM

Take the Bill and Run

The Senate is taking over. After the House rejected the $700 billion bailout of the financial system, senators decided to step into the fray and shepherd the bill through Congress. After a day of behind-the-scenes negotiations, Senate leaders scheduled a vote on a slightly revised package tonight with the expectation that the House would approve the measure by the end of the week. The revisions to the financial rescue plan include a one-year increase in the limit on federally insured deposits to $250,000 from $100,000 and a variety of tax breaks. The tweaks to the bill wouldn't change the basics of the rescue plan, "but would add a populist tinge at a time when voters appear enraged at what many see as a bailout of Wall Street, not Main Street," notes the Wall Street Journal.

USA Todayand the WSJ highlight that key lawmakers hope that having the Senate, including the two presidential candidates, vote in favor of the measure would build momentum for the bill in the House. The Los Angeles Timesnotes that in the aftermath of the House's rejection of the measure, "there was no shortage of suggestions" for new ways to confront the financial crisis. But in coming up with the revisions to the measure, officials had to play what the New York Timesdescribes as "a delicate balancing act" in order to ensure that the changes wouldn't lead to opposition from fiscally conservative Democrats. While some lawmakers are quick to predict that the House will approve the measure, the Washington Postsays House Speaker Nancy Pelosi "responded tepidly to the Senate announcement, and it remained unclear when the House would consider the revised bill."

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Key House officials also spent much of yesterday considering changes that could be implemented to the financial rescue package in order to attract more support, but given the Senate's decision to act quickly, it's unlikely that they will ever see the light of day. Everyone notes that even as lawmakers worried about losing some Democratic support with the changes to the bill from the Senate, Republicans appeared receptive. House Minority Leader John Boehner was consulted and apparently "gave the green light" to the changes, believing that the tax package would appeal to Republicans who voted against the bill on Monday.

Then again, it's unclear whether simply presenting the same bill again wouldn't provide the same results. "There was a widespread sense on Capitol Hill that Monday's vote had snapped the public to attention about the potential repercussions of Congress's failure to act," notes the WP. Consequently, lawmakers' offices were flooded with calls, and there was a marked shift in tone as constituents who found themselves spooked by the huge plunge in Wall Street demanded that Congress do something. "It's completely in the other direction now," Boehner's spokesman said. But the WSJ says that House Democrats who voted against the bill received thousands of calls from constituents who mostly agreed with them.

Now lawmakers might realize that trying to do what their constituents want is a little difficult when the public as a whole isn't really sure of what it wants. Then again, with Election Day rapidly approaching, they have little choice. "It's not a moment at which people can put the national interest ahead of constituent interest," a political science professor tells the LAT. The Post fronts the results of a new poll that reveals that almost all Americans see the financial situation as a big problem and a majority describes it as a crisis. Still, the country remains divided on support for the bailout plan, with 51 percent saying that they believe the government could prevent the economic woes from getting worse.

The move to increase the deposit-insurance limits was endorsed by both presidential candidates as well as the Bush administration yesterday and set "off a bit of a political tiff," says the NYT. House Republicans said that they had proposed the idea over the weekend but that it was rejected, while Democrats insisted that the issue wasn't even talked about. Regardless, lawmakers from both sides of the aisle seem receptive to the increase even as some experts say the $250,000 is completely arbitrary. The Post notes that some think the government should guarantee all bank deposits until the crisis is over, a move that has been embraced by a couple of European countries. The NYT points out that widespread approval for the move represents "a major lobbying coup for community banks." The group, the Independent Community Bankers of America, vowed to begin a big push to muster citizen support for the bailout all across the country.

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In a more controversial move, lawmakers are also considering changing an accounting rule that many have blamed for exacerbating insecurity in the markets. Securities regulators issued a statement yesterday giving companies more flexibility in how to figure out the value of complicated assets for which there are no buyers. But some lawmakers want to take it further and temporarily suspend the so-called mark-to-market rules, which require companies to reflect the market prices of their assets even if they have no intention of selling them. That might improve balance sheets, but critics say it would merely provide a way for companies to hide their losses and could increase uncertainty.

Even as stock markets were in an upward trend after Monday's huge sell-off, "the ripple effects from the U.S. financial crisis intensified around the world," notes the WSJ. Yesterday, a French-Belgian bank received a $9.2 billion bailout and became the fifth European financial institution to receive direct assistance from the government since Sunday. And in what the WSJ calls "one of the most ambitious measures taken by a government since the crisis began," Ireland announced that it would guarantee the debt of its top six financial institutions. The WP points out that even as they try to put out fires, government officials around the world recognize that they are "as dependent as ever on Washington to come up with a solution."

With all the financial-related news, it's easy to forget that the vice-presidential candidates will face off tomorrow in an eagerly anticipated event. The NYT says that you have to go back to Dan Quayle in 1988 to remember a time when "debate expectations for a major party candidate [have] been as low as they will be on Thursday for Gov. Sarah Palin." The paper reviews her past debate performances in Alaska and says that Palin displayed confidence even as she spoke in vague terms "and showed scant aptitude for developing arguments beyond a talking point or two." The WSJ points out that Democrats are trying to raise expectations for Palin's performance, and Palin played the same game this week saying that she's been listening to Biden speak "since I was in the second grade."

The LAT talks to some of her former rivals, who warn that she might not know the ins and outs of policy issues but has an uncanny ability to offer up pithy statements that are appealing to voters. "The political landscape here is littered with people who have underestimated Sarah Palin," a former rival said. In order to be successful, Sen. Joe Biden will have to take her seriously as an opponent while also being careful not to be "overly aggressive against a candidate who radiates telegenic appeal," says the LAT.

USAT fronts a look at how Border Patrol agents are increasing the number of supposedly random inspections in domestic trains, buses, and ferries that are far from the border. The agents are beginning to take full advantage of their authority to search any mode of transportation within 100 miles of the border to catch illegal immigrants. And lest you think they're only focusing on people who are trying to make a living in the United States, a Border Patrol official affirms that their actions even help the fight against terrorism. "They never know when we're going to show up and what form we're going to take," he says.

In the WP's op-ed page, Jonathan Koppell and William Goetzmann suggest that the best fix for the current financial crisis would be to have the government simply pay off all the delinquent mortgages. Although the root of the problem is homeowners, the bailout plan "ignores this" even as the amount of money being requested "is almost certainly more than sufficient to pay off all currently delinquent mortgages." Helping financial institutions is "a large, complex gamble," but paying off mortgages would help "ordinary Americans and would quickly spill over to revive the financial markets."

In what might very well be one of the most pretentious columns in recent memory, the NYT's Thomas Friedman says readers should take the financial crisis seriously "because I know an unprecedented moment when I see one." Friedman then goes on to say that "I've been frightened for my country only a few times in my life," and they were all during momentous events. This ability isn't something he gained with life experience; it's apparently innate. "[E]ven as a boy of 9," he informs us, "I followed the tension of the Cuban missile crisis."

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.