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Sweeteners entice lawmakers to vote for bailout

October 03, 2008

WASHINGTON (AP) -- Bit by bit, lawmaker by lawmaker, forces in favor of the massive financial rescue plan that was rejected just days ago are turning around the tide of opinion in Congress.

They're using goodies, phone calls, old-fashioned arm twisting. They bring a keen knowledge of what needs to be added to the package to entice a particular congressman to flip, whether it has much to do with Wall Street or not.

Mental health parity in big insurance plans?

Sure, if that's what it takes.

"This is sausage-making, of course," said Jade West, lobbyist for the National Association of Wholesaler-Distributors. Toward, in her opinion, a tasty end product.

But also an even more expensive one. Add about $120 billion over five years in sweeteners the Senate is attaching to the $700 billion price tag of the bailout plan that the House voted down Monday.

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The "no" voters of Monday are under tremendous pressure to just say "yes" now. The combined leadership of both parties in Congress is united behind the plan, President Bush is making calls, interest groups are pressing and careful track is being kept of everyone's political pulse.

"Leaning yes -- NEEDS MORE CALLS," a trade association list says of one Tennessee Republican, Zach Wamp. Of another, Marsha Blackburn, the list says: "(Undecided), but positive. Sales tax impt."

That's a reference to a provision the Senate added that would enable taxpayers to deduct state and local sales taxes, an enormously popular idea in Tennessee, Texas, Florida and a few other states. "This is moving in the right direction," said Blackburn.

It's sounding like Wamp will indeed change his vote.

"The time has come to act and if some of us don't change our vote, tomorrow's gonna be an ugly day in America," Wamp said Thursday on Fox News. "And I don't want to be a part of that."

And there's more, much more in the bill.

For Western GOP lawmakers, there's help for rural counties, a huge issue for lawmakers like Doc Hastings, R-Wash. And Republicans are excited about new accounting rules to ease bank liquidity, and plans to boost deposit insurance coverage.

Hastings hasn't been won over by the changes, a spokesman said.

The assorted add-ons, mostly tax measures, include energy-related provisions, business tax breaks, a one-year fix of the alternative minimum tax and tax relief for victims of recent disasters.

Meanwhile, the phone calls from constituents, overwhelmingly against the bailout before, are more evenly divided. People who saw the bailout as strictly a Wall Street sweetheart deal have a more nuanced view now that they have seen their retirement and other investment accounts tank after the House defeated the bill.

"Pain is always a good way to focus people," said R. Bruce Josten, the U.S. Chamber of Commerce's executive vice president for government affairs.

The whole idea is still a mud sandwich for many lawmakers. But some are preparing for a politically difficult switch.

For Steve LaTourette, the boost in Federal Deposit Insurance Corp. limits from $100,000 to $250,000 and the Securities and Exchange Commission's easing of accounting rules for banks has the Ohio Republican leaning toward switching to "yes," even as calls to his office were at one point running 200-1 against. He's also close friends with GOP leader John Boehner, R-Ohio, for whom passage of the bill is a key leadership test.

"To have to say 'no' to Boehner was really hard," said LaTourette. "To say 'no' on the bill was not so hard. It was bad politics and bad policy."

But he added, "If we hadn't defeated it the other day, we wouldn't have the FDIC stuff," nor the change in accounting rules. "So I think this bill is improving."

Rep. Henry Cuellar, D-Texas, fielded a call from Bush urging him to switch. Cuellar says the extension of tax breaks for businesses and individuals, and allowing people to deduct sales tax payments, has him "seriously considering" voting for it. "We're looking at more of a broader-based economic recovery plan instead of just paying for the sins of those five companies on Wall Street," he said.

But Rep. Gene Green, a fellow Texas Democrat, isn't sold yet. He wants the bankruptcy code changed to let judges restructure the terms of a home loan in bankruptcy proceedings. No way, say Republicans and the White House.

Green supports the deductibility of sales taxes, but "does that still overcome investing more than we spent on the Iraq war without really getting to the problem of people being evicted from their homes?"

The upshot? "They don't have me yet," Green said.

Others won't be moved. For them, the issue is still the unprecedented bailout of Wall Street.

"The bill that they are going to send back is the same bill that I voted against two days ago," Rep. Joe Barton, R-Texas, said on Bloomberg Television. "Why would I turn around and vote for it tomorrow evening or Friday?"

Rep. John Shadegg, R-Ariz., is now counted as a "yes," after remarks on local radio praising the new deposit insurance and accounting rules.

"I'd be inclined to vote for the bill, assuming there have not been any bad things added to it," Shadegg said on KTAR, a Phoenix radio station.

Working off a color-coded spreadsheet listing House members whose "no" votes sank the bill in that chamber Monday, business groups contacted dozens of lawmakers -- at home and in Washington -- to seek their support. By late afternoon, the list showed five legislators who'd voted "no" now leaning toward supporting an overhauled version of the bill the House rejected by 23 votes.

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