Play Live Radio
Next Up:
Available On Air Stations

How Do You Pass The Rescue Bill? Add Money

The financial rescue package that the Senate passed has some new provisions that sweeten the pot for individuals and companies that are far from the financial services industry.

So what's changed? The main alteration since the House defeated the bill on Monday is the addition of up to $150 billion in tax provisions — or sweeteners — aimed at helping the bill pass with bipartisan support. The Senate Finance Committee estimates that there would be $43.5 billion in offsets, which are ways to pay for legislative initiatives without adding to the national deficit, that will reduce costs in the overall package. That means that over the next 10 years, the Treasury will take on almost $110 billion in additional debt.

What started as a three-page proposal from the administration has become a 450-page piece of legislation. There are also changes that would boost federal insurance for bank accounts and expand health care coverage. The House is expected to vote on the bill Friday, and leaders say its chances of passing have increased.

The Senate "took the $700 billion bailout and then crammed this tax package on top of it, and they're hoping they can cram it down the House's throat," says Steve Ellis, vice president of Taxpayers for Common Sense, a Washington, D.C.-based taxpayer advocacy group. The group has compiled a list of the top 10 tax sweeteners in the bill.

Ellis says many of the provisions aren't new but have been the subject of an ongoing fight between the House and the Senate over whether they would receive funding. Meanwhile, other provisions were added to help tip some votes in favor of the economic rescue package, he says.

Increase In Bank Deposit Protection

The Senate bill calls for bank deposit insurance to increase from $100,000 per depositor to $250,000 for both the Federal Deposit Insurance Corp. and the National Credit Union Share Insurance Fund.

The tax provisions fall into three broad areas, including extending alternative minimum tax relief for middle-class taxpayers; alternative energy tax incentives; and an assortment of family and business incentives, including property tax relief and a health care provision.

Alternative Minimum Tax Relief

Twenty million taxpayers may benefit from the AMT relief. This measure would cost $64 billion. The original legislation dates from 1968 and was not indexed for inflation. As a result, it grabs more people at lower income levels. Congress created this patch to raise the income threshold so that it wouldn't continue to creep into middle-class families, says a spokeswoman for the Senate Finance Committee. The AMT fix, however, would only be in place for the current fiscal year, unlike many of the other provisions that have been extended for a longer period of time.

Clean-Energy Incentives

The energy tax incentives in the legislation total $18 billion. These include renewable energy, carbon reduction and energy conservation incentives, among others. The $18 billion in incentives are already paid for by a variety of methods, including a delay in tax deductions for American oil and gas companies and a tightening of rules for how these companies pay taxes on income from overseas, according to the Senate Finance Committee.

Mental Health Insurance Parity

The remaining $68 billion, which is partially paid for, would cover business and family tax cuts, as well as disaster relief, mental health insurance requirements and a variety of other areas.

The mental health parity provision would require private insurance plans to offer mental health benefits as part of their coverage universe, just as they do with medical and surgical benefits. Any limits on mental health benefits cannot be "more restrictive" than the limits on other medical services. This would take effect on Jan. 1, 2009, with an estimated cost of $3.9 billion over a decade.

NPR reports with additional reporting from The Associated Press

Copyright 2022 NPR. To see more, visit

What questions do you have about the Statewide General Election coming up on Nov. 8? Submit your questions here, and we'll try to answer them in our reporting.