WASHINGTON – With the House slated to vote Monday on a deeply unpopular $700 billion rescue plan for beleaguered financial companies, President Bush and congressional leaders were scrambling to corral support.
Bush called the election-year vote a difficult one for lawmakers but said he is confident Congress will pass a measure his top economic officials have argued is vital to averting a broader economic meltdown.
"Without this rescue plan, the costs to the American economy could be disastrous," Bush said in a written statement Sunday.
Convincing their colleagues to back the plan despite thousands of angry phone calls, e-mails and letters pouring in from angry constituents proved a tall order for leaders in both parties.
"Now we have to get the votes," said Sen. Harry Reid, D-Nev., the majority leader. He said the measure could pass the Senate as early as Wednesday.
"Nobody wants to have to support this bill," said Rep. John A. Boehner, R-Ohio, the House minority leader. But he said he was urging "every member whose conscience will allow them to support this" to do so. Officials in both parties expected the vote to be a nail-biter.
The two major party presidential candidates — Republican John McCain and Democrat Barack Obama — expressed tepid support for the bailout.
The Bush administration gets broad power to use taxpayer money to rescue cash-strapped financial firms in the legislation, which is designed to unfreeze choked credit and avert a broader economic meltdown.
Congress won a hand in the program too, after 10 days of high-intensity haggling among lawmakers in both parties and Treasury Secretary Henry Paulson, who sought the unprecedented amount of money with little supervision.
Instead, the bill lets Congress block half the money and force the president to jump through some hoops before using it all. The government could get at $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification — and subject to a congressional resolution of disapproval.
Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.
Lawmakers demanded curbs on the pay packages of top executives whose firms get the help, and assurances that taxpayers would ultimately be reimbursed by the companies for any losses. But the government would have broad discretion to decide how to implement both, something Paulson insisted was vital to make the rescue effective.
The legislation also requires that the government take ownership stakes in companies that receive federal infusions, so it could share a piece of potential future profits.
Banks, credit unions, securities brokers and dealers, and insurance companies, among others, could get the help as long as they had "significant operations" in the United States. Originally designed to help companies get rotten mortgage-related investments off their balance sheets, the legislation allows the government to buy up any kind of asset top economic officials think is necessary to promote market stability.
The final 110-page bill was released Sunday evening after a final weekend of intense negotiating, and Republicans and Democrats huddled for hours in private meetings Sunday night to learn its details and voice their concerns. Many said they left uncertain of how they would vote.
Rep. Joe Barton, R-Texas, an opponent, estimated that half of the House's 199 Republicans are "truly undecided."
Democratic Rep. Elijah Cummings, D-Md., said he was inclined to oppose the bill. But he added: "A lot of people are going to hold their nose and vote for it, because they've been put in a bad position and they don't have any other option."
Leaders in both parties were scrambling to put the most positive face on the deeply unpopular plan. House Speaker Nancy Pelosi, D-Calif. said it wasn't a bailout but a "buy-in" for taxpayers to rescue the economy.
Still, lawmakers in both parties who are facing re-election were nervous about embracing such a costly plan proposed by a deeply unpopular president that would benefit perhaps the most publicly detested of all: companies that got rich off bad bets.