Democratic and Republican leaders in Congress today predicted a revised $700 billion financial industry bailout bill would likely pass this week, reversing Monday's stunning vote by the US House of Representatives.
Senate leaders were confident they could deliver the votes needed sometime after 7.30pm (11.30pm GMT) to pass the Wall Street bailout bill.
If the controversial legislation clears the Senate with bipartisan support, the House was likely to consider the retooled bill on Friday, House Majority Leader Steny Hoyer, a Maryland Democrat, said.
The Senate wants to couple the measure with extension of some popular tax breaks to the middle-class and others while also providing more insurance - a maximum $250,000 per account instead of $100,000 - for people's bank deposits.
"I'm confident that we'll get a good strong bipartisan vote here in the Senate," predicted Senate Majority Leader Harry Reid, a Nevada Democrat.
His Republican counterpart, Sen. Mitch McConnell of Kentucky, added, "We're confident that the way we've got this package will work in the Senate and we're optimistic it'll work in the House."
President George W. Bush expressed confidence in the bill's fate this time around but warned lawmakers the measure was necessary "so as to stabilize this (economic) situation, so that it doesn't get worse".
Financial markets today marked time in the run-up to the Senate vote, in contrast to the record 778-point drop on Monday in reaction to the failed vote in the House.
The expanded insurance for bank depositors would come as three of the biggest U.S. banks have succumbed to the crisis in recent months, with more teetering before the November 4th presidential and congressional elections.
Democrats control both chambers in Congress, but need Republican support to push through the bailout - proposed by Mr Bush's administration to avert what the administration says would be a deeper financial crisis that could spread globally.
Kevin Smith, a spokesman for House Minority Leader John Boehner, an Ohio Republican, said the new version of the bailout bill could be more attractive to Republicans in key states because of a tax provision extending a deduction for state and local sales taxes.
"I do think we have a better chance of passing this bill than the one on Monday," Mr Smith said.
The overall tax provision renews a package of cuts that have expired or are about to expire for the middle class, small businesses and entrepreneurs working on renewable energy projects, which would be attached to the bailout.
Besides keeping tax rates lower for the middle-class, Reid said the other provisions "will create hundreds of thousands of jobs here in the United States," sparking investment in small and large businesses."
Congress was determined to renew these tax breaks anyway, in time for next April's tax filing season.
But an election-year tax cut is likely to cheer voters and to lessen the pain felt by taxpayers spending $700 billion to fix mistakes by Wall Street executives.
Beyond the tax cuts, congressional leaders were working broadly to convince voters that the bailout is for "Main Street" not just Wall Street. The House defeat of the bill was triggered by an angry stream of voter complaints.
"This isn't for lower Manhattan," the home of the US financial district, Mr Reid said.
House Speaker Nancy Pelosi of California said House Democrats remained "strongly committed to a comprehensive bill that stabilises the financial markets, restores confidence, and protects taxpayers, and we hope Congress can agree on legislation in the very near future."
Under the agreement to move the bill to the floor quickly, the measure will require 60 votes to pass instead of a simple majority in the 100-member chamber.
Presidential contenders Democrat Barack Obama and Republican John McCain and Democratic vice presidential candidate Joe Biden will be in Washington for the Senate vote. Both men said they backed lifting the limit on bank deposit insurance as a way to restore confidence.
Mr Obama said today it was crucial for lawmakers to pass a $700 billion financial bailout package in order to avert an economic catastrophe.
"To the Democrats and Republicans who have opposed this plan, I say this: step up to the plate. Do what's right for the country, because the time to act is now," Mr Obama told rally in La Crosse, Wisconsin.
The Democratic senator plans to fly back to Washington later to cast a vote in favour of the plan in the Senate.
"It is clear that this is what we must do right now to prevent a crisis from turning into a catastrophe," he said.
The House returns from a two-day break on Thursday, but there was no immediate word on when it would vote on the bill.
Many Americans see the rescue as an excessive burden to taxpayers, however, and believe the money would reward reckless Wall Street executives. They also are annoyed by the idea of helping people who took out larger home mortgage loans than they could afford and then were unable to pay for them.
Reuters