WASHINGTON – Congressional leaders scrambled Tuesday to find out what changes are needed to get the $700 billion rescue plan approved by House members as their parties' presidential nominees offered suggestions.
Both Barack Obama and John McCain announced separately that they support a plan that some House Republicans had pushed earlier: raising the federal deposit insurance limit from $100,000 to $250,000.
That change is aimed at reassuring nervous Americans — and their elected representatives at the Capitol — that the legislation would shore up the weakening economy.
Later Tuesday, FDIC Chairwoman Sheila Bair asked Congress for unspecified authority to raise insurance limits.
The House will reconvene Thursday but it is unknown when another bailout package will emerge.
"What is absolutely clear is that the threat to our economy and millions of working Americans requires that we act," House Majority Leader Steny Hoyer said in a written statement.
Earlier Tuesday, President Bush made his second statement in as many days from the White House, vowing to keep fighting for a rescue plan despite its stunning defeat on Monday. He also spoke with both nominees.
"Congress must act," he demanded in front of the cameras.
"I recognize this is a difficult vote for members of Congress," Bush said. "But the reality is we are in an urgent situation and the consequences will grow worse each day if we do not act."
Republican House aides said the FDIC proposal might attract some conservatives who want to help small business owners and avert runs on banks by customers fearful of losing their savings.
House Republican Leader John Boehner, R-Ohio, expressed support for McCain's and Obama's call for a higher FDIC insurance cap, saying congressional Democrats had rejected it Saturday.
Another possible change to the bill would modify "mark to market" accounting rules. Such rules require banks and other financial institutions to adjust the value of their assets to reflect current market prices, even if they plan to hold the assets for years.
Some House Republicans say current rules forced banks to report huge paper losses on mortgage-backed securities, which might have been avoided.
Congressional leaders hope the half-dozen changes under discussion will be enough to persuade as few as six House Republicans and six Democrats to undo Monday's stunning vote.
The White House signaled a willingness to accept some changes to the bill. Spokesman Tony Fratto said there are plenty of good ideas to help the financial markets and "we're going to look at all of those."
He would not comment on any specific proposal. He said the White House would want to see "if it will help the economy, it will help deal with this problem in our financial markets and the strength of our financial institutions, and if it will help in being able to pass legislation."
Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters, "I'm told a number of people who voted 'no' yesterday are having serious second thoughts about it." He added, however, "there's no game plan that's been decided."
Wall Street, at least, regained hope. The Dow Jones industrials rose 485 points, one day after a record 778-point plunge following the rejection in the U.S. House of the plan worked out by congressional leaders and the Bush administration.
Senate Republican Leader Mitch McConnell of Kentucky said it was time for all lawmakers to "act like grown-ups, if you will, and get this done for all of the people." He predicted a bill would pass this week, although the House, not the Senate, is the focus of the dispute.
The House on Monday balked at approving the measure, pilloried in many quarters as a handout to big business. The 228-205 vote sparked the largest sell-off on Wall Street since shortly after the Sept. 11, 2001, terror attacks.
Bush noted that the maximum $700 billion in the proposed bailout was huge, but was dwarfed by the $1 trillion in lost wealth that resulted from Monday's stock-market plunge.
"Because the government would be purchasing troubled assets and selling them once the market recovers," he said, "it is likely that many of the assets would go up in value over time. Ultimately, we expect that much - if not all - of the tax dollars we invest will be paid back."
"The dramatic drop in the stock market that we saw yesterday will have a direct impact on retirement accounts, pension funds and personal savings of millions of our citizens," Bush said. "And if our nation continues on this course, the economic damage will be painful and lasting."
The rescue package and the nation's faltering economy was also Topic A on the presidential campaign trail.
"We need to do a better job communicating that it is a rescue, not a bailout," McCain told FOX News. "It is not for Wall Street. In fact, all of us would like to punish Wall Street and the special interests and the insiders and the members of Congress who faciliated Fannie Mae and Freddic Mac in incredible abuses that they practiced. But at the same time we have to help average American citizens who are being harmed by this fiscal crisis that we are in.".
Obama issued a statement Tuesday saying that significantly increasing federal deposit insurance would help small businesses and make the U.S. banking system more secure as well as restore public confidence in the nation's financial system.
Sen. Hillary Rodham Clinton, who narrowly lost the Democratic nomination to Obama, said the Senate may have to lead the way in passing a rescue package. But other senators seemed inclined to let the House work out its problems first.
The bill's defeat in the jaw-dropping House floor vote came despite furious personal lobbying by Bush and support from House leaders of both parties. But the legislation was highly unpopular with the public, ideological groups on the left and the right organized against it, and Bush no longer wielded the influence to leverage tough votes. Even pressure in favor of the bill from some of the biggest special interests in Washington, including the U.S. Chamber of Commerce and the National Association of Realtors, could not sway enough votes.
The legislation the administration promoted would have allowed the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believed it would have helped lift a major weight off the already sputtering national economy.
The Associated Press contributed to this report.