Leaders push for bailout revival

Officials consider raising the level of bank deposits protected by insurance.

WASHINGTON (AP) — Congressional leaders, President Bush and the two rivals to succeed him rummaged through ideas new and old Tuesday, desperately seeking to change a dozen House members’ votes and pass a multibillion-dollar economic rescue plan. At the top of the list: Raise confidence in the banking system by increasing the government’s insurance.

In addition, there was talk of making it easier for financial institutions to hold questionable long-term assets, an idea embraced by some of the House Republicans who slapped down the bailout bill and sent stocks tumbling on Monday. Wall Street regained hope on Tuesday, and the Dow Jones industrials rose 485 points, making up a good bit of the ground lost in the 778-point plunge.

Congressional leaders hope the changes under discussion — or a few others that could be in the mix — will be enough to persuade as few as six House Republicans and six Democrats to undo Monday’s stunning vote that rejected a proposed $700 billion rescue.

With the Capitol largely quiet because of the Jewish new year, no overall plan appeared to jell just yet.

Some lawmakers suggested the Senate might approve its own version today, presumably with a few changes to the failed House bill, and then give the House a new crack at the legislation before the week is out.

Still, the House is where the problems are, and leaders there were scrounging for ideas that might appeal to a few of the 133 Republicans and 95 Democrats who rejected the proposal on Monday.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters, “I’m told a number of people who voted ‘no’ yesterday are having serious second thoughts about it.” He added, however, “There’s no game plan that’s been decided.”

Senate Republican Leader Mitch McConnell of Kentucky said it was time for all lawmakers to “act like grown-ups, if you will, and get this done for all of the people.” He predicted a bill would pass this week, although the House, not the Senate, is the focus of the dispute.

The idea drawing the biggest support was to raise the federal deposit insurance limit, now $100,000 per account, to $250,000. Several officials, including presidential nominees John McCain and Barack Obama, endorsed the change.

So did the agency that runs the program.

Within hours of the candidates’ separate statements, Federal Deposit Insurance Corp. chairman Sheila Bair asked Congress for temporary authority to raise the limit by an unspecified amount. That could help ease a crisis of confidence in the banking system, Bair said.

She said the overwhelming majority of banks remain sound but an increase in the cap would help ease a crisis of confidence in the banking system as well as encourage banks to begin more lending.

Monday’s House vote was a stinging setback to leaders of both parties and to Bush. The administration’s proposal, still the heart of the legislation under consideration, would allow the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believe, that would help lift a major weight off the already sputtering national economy.

But the proposal ignited furious responses from thousands of Americans, who flooded congressional telephones. The final House vote, 228-205 against the plan. Some lawmakers reported a shift in constituent calls pouring into their offices Tuesday after the record stock market decline.