Hope Rests on the House

With confidence in Senate passage running high, Washington's attention -- and Wall Street's -- is turning back to the House. House Majority Whip James Clyburn (D-SC) told reporters this afternoon that he expects the House to vote on the Senate rescue package on Friday. On Thursday, the House will likely debate the "rule" for the package, which dictates whether and how members can amend the legislation.

Discussion today has focused on the impact in the House of the items the Senate is adding to the legislative package. The calculus involved is illustrated by looking at one of the "add-ons," the one-year fix for the alternative minimum tax (AMT). If Congress does not alter the AMT, as many as 22 million additional taxpayers, including many middle income taxpayers, could confront it in April. The House recently voted on a stand-alone AMT relief bill on September 24, and 393 members voted for it – 200 Democrats and 193 Republicans.

An early indicator that this tactic may have helped pick up some GOP votes was the announcement by Rep. John Shadegg (R-AZ), the former chair of the conservative Republican Study Conference, that he is prepared to switch to a yes vote.

One risk to the Senate approach is that it might alienate some "Blue Dog" Democrats who have been insisting that extenders and the AMT "patch" be paid for with tax increases elsewhere. The Senate plan has no such "pay-fors." The risk of erosion there may be limited because the leading advocate for paying for the breaks has been Majority Leader Steny Hoyer (D-MD). He will be duty bound to support this package anyway and can probably keep on board virtually all of the 24 out of 49 Blue Dogs who originally supported the rescue plan.

Although several House members predicted the Senate would adjourn after the financial rescue vote – forcing the House to "take it or leave it" – Senate Majority Leader Harry Reid announced earlier that he will keep the Senate in pro forma (non-voting) session just in case.

We will have results of the Senate vote for our readers as soon as they are available.

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