House of Representatives Speaker Nancy Pelosi (D., Calif., above) must marshal a net gain of 12 votes Friday to assure passage of the $700 billion federal bailout bill lawmakers rejected on Monday. The Senate passed a sweetened version Wednesday.
Both opponents and proponents of the $700 billion financial bailout plan intended to ease strains in the credit markets and help kick-start the economy said they expected it to narrowly pass the House of Representatives on Friday. But while the Senate's resounding approval on Wednesday of the plan to purchase up to $700 billion worth of illiquid assets from the financial system pushed the proposal a step forward, ideological tensions among House members -- who rejected an earlier version Monday -- left its ultimate fate in question. "It's going to be a very, very tight vote," says Brian Gardner, senior vice president of Washington research at KBW. The Senate on Wednesday night voted 74-25 to approve the legislation -- known as the Troubled Asset Relief Program, or TARP. Its passage came just two days after the House unexpectedly defeated an earlier version, sending stocks into a tailspin. The Senate inserted several measures in an effort to gain support from House members who rejected the bill. However, those measures threatened to reverse some "yes" votes from fiscally conservative Democrats, known as Blue Dogs, who are concerned about the effect the changes could have on the federal budget. Strong opposition also remained from some House members who were diametrically opposed to the basis of the bill. Anti-TARP members range from free-market conservatives who consider it akin to socializing the financial sector, to liberals who don't want to spend a dime of taxpayer money to bail out Wall Street banks that made bad decisions.