Senate to vote on bailout Wednesday

Senate leaders Tuesday night announced a Wednesday evening vote on the $700 billion Wall Street rescue plan rejected Monday in the House of Representatives. 

Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) announced the agreement in a joint appearance on the Senate floor just after 7 p.m. Agreements are in place for a voting procedure and the vote itself is expected sometime after sundown, to respect the Jewish holiday, both leaders’ offices said.

Democratic presidential candidate Barack Obama (Ill.) will return to Washington for the vote.

{mosads}The agreement came together after a daylong effort that involved as many as nine conversations between Reid and McConnell and their lieutenants, as well as calls back and forth from Capitol Hill to the White House.

Tax legislation will be attached to the Senate financial rescue package, which will be considered just two days after the House rejected a bailout bill, causing markets to plunge.

The tax bill would create and extend incentives for renewable energy and will include a one-year patch of the Alternative Minimum Tax, which would otherwise hit about 20 million Americans next year.

Finance Committee Chairman Max Baucus (D-Mt.) said the tax incentives would ensure that the bill focused more on "Main Street" and not just Wall Street.

"Adding this tax relief will ensure that regular working Americans get the financial help they need in this time of crisis," Baucus said in a statement.

The bill faces an uncertain path in the House, and Democratic leaders in that chamber gave the Senate news a cool reception.

House Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) both issued statements that pointedly omit any words of support for the plan, although they didn't state opposition either.

The stock market plunged 777 points after Monday's 205-228 vote in the House, sending leaders from both parties scrambling on Tuesday to head off any more political and financial fallout. The bill is believed to enjoy a wide margin of support in the Senate, usually the more difficult of Congress's two chambers for controversial legislation.

"It has been determined, in our judgment, this is the best thing to move forward," Reid said. "This is good for the country."

McConnell called the announcement "one of the finer moments in the Senate."

"We have come together on a bipartisan [basis] and structured a way forward on an important rescue package for our country," he said. "This is an important accomplishment and a way forward to get a result that we need to achieve for the American people."

Reid's office said the final agreement came together very quickly late Tuesday.

Usually, constitutional issues prevent the Senate from acting on legislation that involves tax issues — any such bill must originate in the House. However, the Senate can circumvent the the rules by taking up a pending House bill, stripping it and putting in place substitute language. Senate Banking Committee Chairman Chris Dodd (D-Conn.) had cast doubt on that scenario after Monday's failed House vote, saying it would only "compound" the situation, but others, such as senior Banking Committee member Robert Bennett (R-Utah), confirmed it was a leading idea.

"Anything that's within the realm of the rules is within the realm of possibility," Bennett said.

Some observers said a successful Senate vote could be an important tool in persuading wavering House members who may be considering changing their vote.