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Prospects for Big-Bailout-Rural-School-Aid-Mental-Illness Bill Seem Good

Senate Majority Leader Reid speaks to reporters in the Capitol in Washington after the Senate vote. Kevin Lamarque / Reuters

When the bailout bill failed in the House Monday, lawmakers said no to one big idea. Senate leaders have taken a different tack, attaching the bailout to other bills with the clear intention of wooing lawmakers with countless little ideas.

Even an incomplete survey of the 450-page bill’s contents quickly sets the head spinning:

  • Taxbreaksgalore. There’s a one-year measure to protect middle-income households from paying the alternative minimum tax. Tax breaks for victims of recent natural disasters. Tax credits for investing in solar energy and producing wind energy. Tax credits for businesses investing in research and development. A two-year extension of “the popular deduction for states that rely on sales tax.” Tax breaks for manufacturers of toy wooden arrows, along with “tax breaks benefiting Hollywood producers, stock-car racetrack owners and Virgin Islands rum- makers.”
  • $3.3 billion in federal aid for the “secure rural schools” program, “which compensates counties for the loss of revenues they had been receiving from the sale of timber on federal lands.”
  • A requirement that health insurance companies provide more equitable coverage to people with mental illnesses.
  • And then, there’s a measure which could actually be said to be related to the bailout itself: a mandate to increase the amount of deposit insurance from $100,000 to $250,000.

It’s a bill with something for everybody. Rep. Jim Ramstad (R-MN) voted nay on Monday. But if he still opposes the bailout tomorrow, he’ll be forced to vote against his own mental illness legislation. The Politicoreports that various House Republicans seem cheered by other provisions: Washington state lawmakers like the rural school aid, Southern lawmakers might like the state sales tax deduction, and another key nay vote is onboard due to the deposit insurance provision.

Meanwhile, Rep. Steve King (R-IA) still planned to vote nay even though the new version of the bill contains a biodiesel tax credit he’s supported, but he says "I think that they probably put enough sweeteners in it that they will be able to get the votes."

If there’s consensus that the bill failed to pass on Monday due to poor salesmanship – especially the widespread perception that this is a $700 billion bailout for Wall Street fat cats – Senate Majority Leader Harry Reid (D-NV) seemed determined to up-end that perception without changing the core of the bailout plan itself.

"This rescue package is not for the titans of Wall Street. It's not for those whose greed got us here, who chose greed over prudence," Reid saidyesterday. "It would be a blight on this Congress not to pass these tax extenders. These aren't for the wealthy, but for the people who are working for a living."

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