Vote on bailout plan expected

September 29, 2008 08:36AM

President Bush spoke in a televised statement this morning, urging members of Congress to pass a revised version of the administration’s $700 billion financial bailout plan, expected to be voted on later today. Negotiations modifying the bill brought sacrifices from all sides: Democrats dropped a push to allow bankruptcy judges to modify mortgages for distressed homeowners; Republicans stopped an effort to require the federal government to insure, rather than buy bad debt; and the administration accepted provisions that limit compensation for outgoing executives at banks. While economists say that the bill would prevent the credit crisis from worsening, many expect it to have more of an immediate positive impact in stock prices than in liquidity at large. Lenders are still going to be hesitant to originate mortgages while home prices are declining, John Lonski of Moody’s says. Mayor Bloomberg highlighted the importance of passing the proposed bill on Friday, saying that without it, “you would literally have the banks closing their doors.” TRD