New Wall Street Rescue Plan Exceeds 700 Billion Dollars

The U.S. Senate is expected to vote on Wednesday evening on the government plan to rescue the financial sector, with a proposed allocation of up to 700 billion dollars from the budget, which has been supplemented with several provisions in the interest of the broader economy and citizens.

The original bill, previously agreed upon between Congressional leaders and the Bush administration, was rejected by the House of Representatives on Monday, as two-thirds of Republican representatives voted against it, as well as more than a third of Democrats. Amendments to the proposal are expected to attract more Republican votes in the House, which is set to vote on the legislation again on Friday, Democratic majority leaders announced.

Presidential candidates, Republican John McCain and Democrat Barack Obama, along with his vice-presidential partner, Senator Joe Biden, have announced their participation in the Senate vote. Officials from both the Democratic and Republican parties in the Senate predict that the bill will be passed with a convincing majority.

President George W. Bush and top financial officials of the administration, as well as both presidential candidates, have called for the urgent adoption of the Wall Street rescue plan. Proponents of the plan argue that it is essential for the government to address the credit crisis, as the current freeze on bank credit lines poses a threat to the entire economy. Opponents of the plan argue that it rewards poor decisions on Wall Street, imposes a burden on taxpayers, and does not address the real economic hardships faced by Americans.

Due to amendments to the plan in the Senate, its cost will be higher than the projected 700 billion dollars for the federal purchase of illiquid securities backed by mortgage loans and other bad credit derivatives from bank balance sheets. The amended bill proposes a temporary increase in the insured deposits in banks guaranteed by the Federal Deposit Insurance Corporation (FDIC), from the current 100,000 to 250,000 dollars, as well as three types of tax relief that are expected to secure votes from Republican congressmen.

The law would increase the number of tax incentives for the use of renewable energy sources for citizens and businesses, extend the validity of incentives for business development, and include incentives from the Alternative Minimum Tax (AMT), without which millions of Americans would have to pay income tax for the wealthy. (Hina)