World Financial Crisis

US Senate approves bailout plan

Article published on the 2008-10-01 Latest update 2008-10-03 05:39 TU

The US Capitol Building
(Photo: Reuters)

The US Senate voted 74-25 to back the revised 700-billion-dollar Wall Street bailout on Wednesday, raising hopes that the House of Representatives would follow suit after rejecting an earlier text. The House of Representatives votes on the package on Friday.

 

President George Bush welcomed the passage of the bill, and called on the House to act in the next two days to avoid further damage to the US economy.

Presidential candidates Barack Obama and John McCain also backed the plan, putting pressure on the House to pass the new deal.

The revised deal gives the US Treasury the power to buy up the bad mortgage debt choking the banking sector industry and raises the ceiling on federal insurance for bank deposits from 100,000 dollars to 250,000 dollars.

Tax breaks for small businesses were also extended and Senators also retained the limits of "golden parachute" severance payments to Wall Street executives which were not in the original Bush administration plan.

President Bush welcomed the result of the Senate vote and urged the lower house to act quickly.

"The American people expect and our economy demands that the House pass this good bill this week and send it to my desk," Bush said in a statement.

Traditionally, the House of Representatives handles the US budget while the Senate tackles foreign policy matters. The Senate is considered to have much more bipartisan support, however, and was considered therefore to be the best place to start the delicate process of passing the bill.