US Senate approves revised $700 billion bailout plan

The bailout plan, which was passed by a vote of 74-25, was approved after a package of tax breaks for businesses, energy and the middle class, and an increase in bank deposit insurance were added in.

Under the new bill, the federal government will be authorised to purchase the assets from banks and other financial institutions, which is expected to help free them to resume lending to businesses and consumers.

The new version approved by the Senate will raise federal deposit insurance limits to $250,000 from $100,000 per account, as suggested by the two White House hopefuls a day ago.

Another big change is the introduction of a 10-year, 150.5 billion package of tax proposals, including measures to ease the bit of the so-called alternative minimum tax and R&D tax credits coveted by high-tech companies and drug makers.

The change in the bill were quantifiable, with the initial proposal from the Treasury Department running three pages while the latest version exceeding 450.

The measure now goes to the US House of Representatives for a vote that is likely on Friday.

The Bush Administration and key lawmakers warned earlier that the economic crisis will become a full-fledged disaster if Congress rejects the rescue plan.

Speaking on Wednesday at the end of meeting with General David McKiernan, the top US military commander in Afghanistan, US President George W Bush said: "The Senate's going to take this bill up tonight, I'm hopeful they'll pass it, and then the House will have a chance to vote on it Friday morning.”

"It's very important for members to take this bill very seriously," said the President, noting the legislation is needed "to stabilise the situation, so it doesn't get worse."

His remarks came two days after the US House of Representatives voted narrowly to reject the $700 billion financial rescue bill that the Bush Administration and leading members of Congress had agreed was necessary.

"The bill is different. It has been improved and I am confident it will pass," President Bush said.

Article published courtesy of BuaNews