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WASHINGTON – Two days after an emergency financial rescue plan collapsed in the House of Representatives, the Senate 74-25 approved an amended but still flawed plan that includes a tax cut sweetener for businesses and renewable energy, changes to federal bank deposit insurance and a fix to the alternative minimum income tax that forces millions of Americans to pay higher individual income taxes.

Other than that, the Senate bill, which Congressman Dennis Kucinich called “a fraud,” almost was identical to a proposal rejected by the House on Monday. House passage was no foregone conclusion.

Back to the House
“The $700 billion bailout for Wall Street is driven by fear not fact. This is too much money in too short a time going to too few people while too many questions remain unanswered. Why aren’t we questioning the underlying premise of the need for a bailout with taxpayers’ money?” Kucinich asked from the House floor Monday.

“Why have we not considered any alternatives other than to give $700 billion to Wall Street? Why aren’t we asking Wall Street to clean up its own mess? Why aren’t we passing new laws to stop the speculation, which triggered this?aren’t we putting up new regulatory structures to protect investors? How do we even value the $700 billion in toxic assets?”

Black Americans weigh in
Offices of Congressional Black Caucus members were deluged with mostly Black constituents decrying the proposed $700 billion Wall Street bailout that failed on its first vote on Monday.

“My feeling is that if you’ve been making eight, 10, 12 or 20 million dollars a year, why should we bail you out? You should have saved something. I think we ought to be talking about saving people who have lost their homes,” said Rep. Eddie Bernice Johnson (D-Texas), a former CBC chair.

Johnson, like Florida representatives Alcee Hastings, Kendrick Meek and Corrine Brown and about half of the CBC members, voted for the bill. Still, pressure was on from CBC constituents who insisted that everyday taxpayers not bear the burden of Wall Street deficiencies.

House Majority Whip Jim Clyburn (D-S.C.) said the failure to do anything at all could be even more det

rimental. “This is not just about Wall Street. It’s about community bankers, local banks, credit cards, trying to buy a house, trying to buy a car, all of those things could get tied up if we don’t do something,” Clyburn said. “We’re trying to make sure that we can restore confidence in the market and that we protect the taxpayers as we do it.”

Financial analysts warned that even with a rescue plan, the economy appears headed for a recession, perhaps a prolonged one, with tightening credit, rising unemployment, and a decline in economic output.

Trust, not money
More than 200 economists wrote to Congress and said this bill might actually worsen the financial crisis. One financial expert, Karl Denninger of the web site www.fedupusa.org, said in an exclusive interview with the Florida Courier that Congress must address the trust problem, not throw money at irresponsible and even criminal bankers who created the mess.

Denninger says that foreign investors who invested in toxic mortgages believe Wall Street defrauded them. In effect, they want Americans to “eat” the loss to restore their trust in American markets. He believes that Wall Street and politicians won’t be honest with Americans and let them make a decision as to whether taxpayers should bail out foreign investors from China, Saudi Arabia, and other countries.

Denninger believes it would cost $5-7 trillion of borrowed money, an amount that would destroy the value of the dollar and double Americans’ cost of living, to fix the mess. He believes the $700 billion will never be recovered, and urges more irate phone calls to Congress to stop the House bill.

Tried and failed
“The real news is that the Federal Reserve pumped an additional $630 billion into the global financial system before the (Monday) vote, and yet the (stock market) tanked after the vote,” he said. “(Fed chief Ben) Bernanke (already) spent $630 billion, but failed to fix the problem.

“There are plans to solve this problem with a combination of accounting and regulatory changes and help for homeowners and which involve no or very little taxpayer money. It is time for those of us who have other ideas to be invited to Washington D.C., to discuss, debate and hammer out something that will actually work, then put that to a vote,” he explained.

“I am not suggesting we do nothing, but clearly that we cannot print money or borrow our way out of this,” Denninger said.

Hazel Trice Edney/NNPA and William Douglas and David Montgomery/ McClatchy Newspapers contributed to this report.