The U.S. Senate on Wednesday night approved a revised bailout bill intended to address the mounting financial crisis that has crippled worldwide credit and equities markets.
The Senate voted 74-25 to approve the legislation, which authorizes the federal government to buy up to $700 billion in mortgage-related assets clogging bank balance sheets and freezing credit markets. Its passage comes just two days after the House of Representatives unexpectedly rejected an earlier version, sending stocks into a tailspin.
The House is expected to again vote on the measure on Friday. Twelve representatives must switch their votes to overcome Monday's 228-205 defeat of the bill.
The Senate's approval came shortly after the Securities and Exchange Commission extended a temporary ban on short selling of financial companies through Oct. 17. The ban was enacted last month to stem steep losses in financial companies amid the crisis.
The new bailout bill provisions include some $110 billion in additional tax incentives intended to spur economic growth, and an increase in the level of bank-account deposits the government will protect. The Federal Deposit Insurance Corp. will now cover up to $250,000 per account, instead of the previous level of $100,000.The latest draft is the fourth edition of the legislation, and comes as the result of much political wrangling among administration officials, Democratic congressional leaders and conservative House Republicans.
Presidential nominees Barack Obama (D., Ill.) and John McCain (R., Ariz.), and Sen. Joe Biden (D., Del.), the Democratic vice presidential nominee, returned to Washington for the vote Wednesday night.