Senate awaits further House developments on bailout legislation

The Senate intends to wait for the House to figure out its next move on a $700 billion Wall Street bailout package, despite having more than enough support among senators to move the measure along.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) said that any action by the upper chamber could further jeopardize the fragile bipartisan compromise, which is backed by the Bush administration but was soundly defeated Monday on the House floor.

{mosads}“Our job in the Senate now is to let the House resolve its internal difficulties,” Dodd said. “We’re certainly not going to take any action here.”

Minority Leader Mitch McConnell (R-Ky.) and Majority Leader Harry Reid (D-Nev.) conferred by phone late Monday, but told reporters they were unsure about a path forward. The schedule for the week remained in question.

The financial plan was on track to receive at least a two-thirds vote in the Senate, members said privately, far exceeding the necessary margin. Republican aides said they were unaware of any serious obstacles, and even GOP senators known for slowing the process — Tom Coburn of Oklahoma and Jim DeMint of South Carolina — indicated they would not try to block the bailout bill. Resistance was likewise not expected from Sen. Richard Shelby (Ala.), the Banking Committee’s ranking Republican, who staunchly opposes the bill and boycotted talks.

Sen. Judd Gregg (R-N.H.), the Senate’s lead GOP negotiator, said he was unaware of any serious obstacles and that “most senators realize the severity of the situation.”

Gregg reiterated warnings that a severe national crisis could occur in days without passage of the bill and urged immediate reconsideration by the House.

“If we don’t act promptly and effectively, then a lot of people are going to lose their jobs, and Main Street is going to be put into bankruptcy,” Gregg said.

Hardcore fiscal conservatives like Sam Brownback (R-Kan.) also said they were poised for reluctant approval and unsure of the way forward.

“Almost everyone believes something needs to be done,” Brownback said after the House vote. “There’s a will to act, but the right way has not been found yet.”

The House vote prompted Reid to abruptly cancel an afternoon press conference. Dodd, the Senate’s lead negotiator, said the chamber may have to stay in session for weeks, even with the November election on the horizon.

“This is as a big a moment economically as our country has been in for decades,” Dodd said. “We cannot leave town. If we have to stay here this week and next week, we have to respond.”

Dodd threw cold water on the idea of the Senate acting in the vacuum, noting that the Constitution calls for revenue-raising measures to originate in the House. The Senate has skirted that before — the chamber could always take up a pending House bill, strip it and use it as a shell bill. But there was no talk of that Monday.

Coburn, who routinely places legislative holds on a wide variety of bills, said he would not attempt any such objections and was convinced of the need for immediate approval.

“This is a time in our country when politics needs to go out the window,” Coburn said, speaking before the House vote. “I would not have written this plan. I think it lacks a lot. But we’ve got to do something to re-establish confidence.”