Page last updated at 20:05 GMT, Thursday, 2 October 2008 21:05 UK

House meets to debate US bail-out

Traders work the floor of the New York Stock Exchange on 2 October
All eyes on Wall Street are on the House after Monday's shock rejection

Members of the US House of Representatives are considering a revised $700bn (380bn) plan to rescue America's financial sector.

Party leaders are hoping the House, which stunned global markets by rejecting the initial plan, will follow the Senate and back a new version.

The debate is due to start late with the House breaking up for the night before returning to vote on Friday.

US shares fell sharply as investors showed caution over the vote's outcome.

On Wall Street, the Dow Jones index closed down 348.2 points or 3.2% at 10,482.8, a slide which also dragged European shares lower.

France is to host a special summit on the financial crisis on Saturday, bringing together EU members of the G8 ahead of a full meeting next week in Washington DC.

Bush appeal

When the Representatives first rejected the plan on Monday by 228 votes to 205, they had concerns about both the content of the plan and the speed with which they were being asked to pass it.

This thing, this issue, has gone way beyond New York and Wall Street
George W Bush
US president

President George W Bush has urged the House to back his revised bill, saying that credit is frozen and the package represents the best chance to correct the situation.

"[This] is a bill that has got the best chance of providing liquidity, providing credit, providing money so small businesses and medium-sized businesses can function," he said after meeting business leaders

"This thing, this issue, has gone way beyond New York and Wall Street. This is an issue that's affecting hard-working people. The House of Representatives must listen to these voices."

The package is aimed at buying up the bad debts of failing institutions on Wall Street.

It has been amended to include extra tax breaks for ordinary Americans and more protection for saving accounts.

Both the Democratic and Republican parties are planning to press their members in the House on Thursday to swing behind the revised bill.

'Good prospect'

The House reconvened with nine other bills on its agenda before the bail-out debate.

Protesters against the bail-out stage a play outside the Capitol
Protesters staged a play outside the Capitol satirising America's elite

With 40 minutes' debating time allocated to each bill, discussion of the rescue package is not expected until Thursday evening, Washington time.

Both the Republican and Democratic House leaders said they believed the bill would probably pass. Pressure will particularly be applied to the 133 House Republicans who went against party affiliation to reject President Bush's bill, correspondents say.

Roy Blunt, the Republican Whip, noted that the revised legislation had become more appealing to constituents back home.

House Majority Leader Steny Hoyer said he saw a "good prospect" of the bill being approved on Friday.

However, Marcy Kaptur, an Ohio Democratic Representative, said she still planned to vote No, when she appeared on ABC's Good Morning America programme.

"I will not support this legislation because it's the wrong medicine," she said, and advocated letting the market solve its own problems without government intervention.

The bill successfully passed through the Senate on Wednesday after it was amended to raise the government's guarantee on savings from $100,000 to $250,000, include tax breaks to help small businesses, expand child tax credit and extend help to victims of recent hurricanes.




MARKET DATA - 11:36 UK

FTSE 100
5429.64up
23.70 0.44%
Dax
5733.05up
19.54 0.34%
Cac 40
3784.02up
14.48 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
BBC Global 30
5707.15up
20.65 0.36%
Data delayed by at least 15 minutes


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