Reuters
The fate of the $700 billion Wall Street bailout plan is now in the hands of the House of Representatives and leaders are cautiously hopeful that Congress can complete action on it this week.
The Senate passed the bill by a 74-25 vote on Wednesday after adding provisions to make it more attractive to reluctant lawmakers in the House.
The House, which could vote on it by noon/(1600 GMT) on Friday, rejected the original bill on Monday after lawmakers were flooded with e-mails and calls from constituents angry at the idea of bailing out Wall Street at taxpayer expense.
The bailout plan, which would allow the Treasury Department to buy soured mortgage-related assets from banks, has been the main hope for government action to unlock credit markets and head off a deeper economic downturn in the United States and abroad.
In the House, the plan faced opposition from many Democrats and was even more unpopular among Republicans, who say they prefer to rely on private capital markets, rather than taxpayers, to free up frozen credit markets.
Liberal Democrats voiced the opposite concern — that it did not go far enough to rein in Wall St. excesses and that it failed to provide new money to stimulate the economy.
As the bailout was failing in the House, shaken investors reacted by sending the Dow Jones industrials plunging 778 points, the biggest drop ever in a single day. Congressional leaders then scrambled to resurrect a bill.
Here is what happens next, along with some possible hurdles and outcomes.
* Democratic and Republican leaders in the House need to convince at least a dozen lawmakers to change their votes in order to try again to pass the bill.
* By taking the lead on what President George W. Bush and top economic officials called a "critically important" plan to avert lasting damage to the U.S. economy, the Senate put political and public pressure on the House to pass the legislation.
* The measure requires a simple majority of the 435 members of the House to pass.
* Republican and Democratic leaders think they can garner enough votes in the House this time, but they were unprepared for, and stunned by, its defeat on Monday.
"I am optimistic that we will have the votes to pass this … but I am not taking anything for granted," House Republican leader John Boehner said on Fox News.
"It is my expectation that the House of Representatives will follow suit," Senate Democratic leader Harry Reid said after the Senate passed the bill.
* The Senate added sweeteners to the bill to help sway reluctant House Democrats and Republicans, who fear they otherwise could lose their seats in the November 4 elections if they vote for it.
* The changes made by the Senate are aimed at convincing vulnerable House lawmakers the plan is an economic rescue that benefits Main Street, not just Wall Street, and making it more politically palatable for them to vote yes.
* They included a higher limit for government-insured bank deposits. The presidential candidates, Democrat Barack Obama and Republican John McCain, as well as key congressional negotiators support this. In addition, the Senate renewed tax breaks for businesses and alternative energy.
* Raising the Federal Deposit Insurance Corp caps on bank deposits to $250,000 from $100,000 and the tax provisions make the bill more appealing to House Republicans.
* But the tax breaks and any added costs to the bill could drive away conservative Democrats in the House who have long argued any tax cuts should be paid for with other spending reductions or tax increases.
* Any Democratic defections put more pressure on Republicans in the House to add to the 65 members of their party who voted for the bill the first time.
* If the House passes the bill with no changes it goes directly to Bush for his signature into law.
* If the House makes any changes, the bill must go back to the Senate for approval.
