The Senate Steps Up

After the House shocked the markets and the world with the chaos surrounding their proposal and the vote on it Monday, the Senate decided it was time for the adults to deal with it.

And deal they did. The Senate bill has lots of stuff, some of it strengthening oversight and other elements of the House bill that Democrats especially required in order to support it. But statesmanship requires some politics, too, so this bill was loaded with popular programs Senators wanted to vote for anyhow. But along with some of the goofier earmark-like provisions the media passed around on Wednesday, there were provisions that actually will help the economic recovery. For instance, says the NY Times:

Instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.

The approximately $150 billion in new tax breaks, which offer incentives for the use of renewable energy and relieve 24 million households from an estimated $65 billion alternative-minimum tax scheduled to take effect this year... "

Those tax incentives for renewable energy are themselves important, as Tom Friedman has been saying for months, especially to new firms and established ones ready to jump into the renewable energy business, but needing the same sort of help that such industries get in other western countries. And they aren't even new--they have been on the books but were expiring, and Congress hadn't yet renewed them.

As for the bail-out part of it, Paul Krugman is among those who think this bill is necessary, but at best it just stops things from getting very much worse. More will be probably needed to turn things around. On the Senate floor, Obama said "This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe....passing this bill can't be the end of our work to strengthen the economy, it must be the beginning."

"Now, the fact that we're even here voting on a plan to rescue our economy from the greed and irresponsibility of Wall Street, and some in Washington, is an outrage," Obama said. "It's an outrage to every American who works hard, pays their taxes, and is doing their best every day to make a better life for themselves and their families. And understandably, people are frustrated. They're angry that Wall Street's mistakes have put their tax dollars at risk. And they should be. I'm frustrated and angry, too."

But he used the analogy he has developed on the campaign trail--when your neighbor's house is on fire you first put it out, or it could spread to yours. Then you deal with how it caught on fire.

"We're in a very dangerous situation where financial institutions across this country are afraid to lend money. And if all that meant was the failure of a few banks in New York, that would be one thing. But that's not what it means. What it means is, if we don't act, it will be harder for Americans to get a mortgage for their home or loans they need to buy a car or send their children to college. What it means is that businesses won't be able to get the loans they need to open a new factory or make payroll for their workers. And if they can't make payroll on Friday, then workers are laid off on Monday."

"In other words, this is not just a Wall Street crisis, it's an American crisis."

Obama spoke for 13 minutes on the Senate floor, and his speech sums up the situation. John McCain was also present, but didn't speak. Obama, McCain and Senator Biden all voted for the bill, which passed 74 to 25. The House is expected to be ready to vote on Friday. So far its leaders are optimistic it will pass, but assurances are that it won't be put to a vote until it is certain to pass.

Meanwhile, today's set of national and battleground state polls shows Obama with significant leads.