US Senate passes USD 700 bn bailout package

Sridhar Krishnaswami
Washington, Oct 2 (PTI) Giving a major boost to the efforts for bailing out troubled American financial firms, the U.S. Senate has approved the USD 700 billion rescue package proposed by the Bush administration, with some modifications.

The Senate passed the bill, which incorporated tax cuts
and a higher insurance limit for bank deposits, by a wide
margin 74-25 on Wednesday evening.

The modified rescue package will now go Thursday to the
House of Representatives, which had voted against the original
proposal on Monday.

In the Senate, 40 Democrats, 33 Republicans and one
independent voted in favour of the bill while nine Democrats,
15 Republicans and one independent voted against it.

Along with proposed tax cuts for businesses, the modified
bailout plan includes raising the limit on federal insurance
for bank deposits to USD 250,000 from the current USD 100,000,
which sweetened the demands of Republicans and Democrats in
the House of Representative.

"I believe members of both parties in the House can
support this legislation. The American people expect and our
economy demands that the House pass this good bill this week
and send it to my desk," President George W Bush said in a
statement.

The finer aspects of the Senate legislation also looked
at ways to prevent the more than 20 million middle class
taxpayers from feeling the pinch of the alternative minimum
tax.

The proposal for increasing the deposit insurance limits
had the backing of presidential candidates and many American
law makers, after the House of Representatives, rejected the
bailout plan on Monday. PTI SK
BDS