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US Senate backs new bail-out bill US Senate backs new bail-out bill
(about 2 hours later)
The Senate has approved a new version of a $700bn (£380bn) rescue plan for the troubled US financial system.The Senate has approved a new version of a $700bn (£380bn) rescue plan for the troubled US financial system.
Senators voted 74 to 25 in favour of the emergency legislation designed to stabilise volatile markets and limit further damage to the economy.Senators voted 74 to 25 in favour of the emergency legislation designed to stabilise volatile markets and limit further damage to the economy.
It included an increase in the level of government insurance for bank deposits and a raft of targeted tax breaks. It includes tax breaks for families and businesses, among other measures designed to win over sceptics.
The plan will now go before the House of Representatives, which narrowly rejected a similar bill on Monday.The plan will now go before the House of Representatives, which narrowly rejected a similar bill on Monday.
US presidential hopefuls John McCain and Barack Obama, who both support the rescue plan, returned from the campaign trail for the vote. CHANGES TO BILL Raises government's guarantee on savings from $100,000 to $250,000Tax breaks to help small businesses and promote renewable energyExpansion of child tax credit and help for victims of recent hurricanes class="" href="/1/hi/world/americas/7646181.stm">Will the US public buy the plan? class="" href="/1/hi/business/7645645.stm">Global shares mixed ahead of vote class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5388&edition=1">Send us your comments President George W Bush praised Senate leaders for making "vital improvements to the rescue package" and urged the House to approve the measures.
Senate majority leader Harry Reid, a Democrat, said he was happy with the result and praised both candidates. News of the Senate vote had little effect on the Asian markets - Japan's Nikkei index was down by 1.11% at noon and Australian stocks fell slightly after the vote.
Added sweeteners
The original bill was criticised for pandering to the needs of Wall Street bankers at the expense of ordinary citizens.
CHANGES TO BILL Raises government's guarantee on savings from $100,000 to $250,000Tax breaks to help small businesses and promote renewable energyExpansion of child tax credit and help for victims of recent hurricanes Will the US public buy the plan?Global shares mixed ahead of voteSend us your comments
The $700bn is designed to be used to buy up devalued assets from struggling firms to help kick-start the economy.
Since the House rejected the bill, politicians have added sweeteners such as tax breaks for small businesses and an increase in the amount of savings the state will guarantee - from $100,000 to $250,000.
The House is expected to vote again on the bill on Friday, and President Bush was keen to stress that the package was "essential to the financial security of every American".
"The American people expect - and our economy demands - that the House pass this good bill this week and send it to my desk," he said.
Premature celebrations?
US presidential hopefuls John McCain and Barack Obama, who both support the rescue plan, returned from the campaign trail for the vote.Both presidential candidates turned up for the vote
Senate majority leader Harry Reid, a Democrat, said he was happy with the result and praised both presidential candidates for voting.
"I think it shows that when we work together we can accomplish good things," he said."I think it shows that when we work together we can accomplish good things," he said.
"I think it speaks volumes that both of our presidential candidates are here and voting - both supporting this legislation." Mitch McConnell, leader of Republican senators, was also in jubilant mood.
Speaking a few hours before the vote, President George W Bush said the bill needed to pass in order to calm volatile markets. "This was a measure that was much needed, to unfreeze the credit markets and get America's economy working again," he said.
"It's very important for us to pass this piece of legislation so as to stabilise the situation - so that it doesn't get worse and then our fellow citizens lose wealth and work," he said. But the BBC's Jonathan Beale, in Washington, says the bill has passed only the first hurdle, and such celebrations could yet prove to be premature.
The House of Representatives is expected to vote on the revised version on Friday.
The BBC's Jonathan Beale, in Washington, says senators from both parties are congratulating each other for rising above party politics and acting in the interests of the US.
But he says the bill has passed only the first hurdle, and such celebrations could yet prove to be premature.