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Senate gearing up for vote tonight

Congressional leaders talked optimistically of chances the Senate will pass the $700 billion financial industry bailout Wednesday night, but the message wasn’t resonating much with a still-skidding stock market.

Expectations on Capitol Hill were heightened when some leading players on the issue said they saw signs of a greater acceptance — if not a collective embrace — from constituents, based on e-mails, calls and letters in the wake the bill’s defeat on the House floor.

House Republican Whip Roy Blunt said calls and e-mails to congressional offices that were running about 90 percent against the measure earlier now are coming in about a “50-50” pace.

Even a 50-50 proposition might have been attractive on Wall Street, where the Dow Jones industrials at times lost more than 200 points in their third triple-digit move this week. Credit markets remained extremely tight and stocks also fell on a report that an index of manufacturing activity fell significantly in September.

President Bush was ready to call lawmakers asking for their support ahead of the crucial vote. And House Majority Leader Steny Hoyer, D-Md., said he thought the bill would go through there.

Democratic presidential nominee Barack Obama and his GOP rival, John McCain, planned to fly to Washington for the Senate vote, as did Democratic vice presidential nominee Joe Biden, adding to the political intrigue, and the White House continued to lobby hard for the legislation, both publicly and privately.

At the daily briefing Wednesday, spokesman Tony Fratto took the unusual step of waving a copy of the New York Times to cite stories in it as well as papers across the country that show evidence of the tightening credit squeeze on small businesses, municipal projects and jobs. “It is affecting real Americans out there,” he said.

The legislation essentially would allow the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believe, that would help lift a major weight off the already sputtering national economy.

The administration’s proposal has remained largely intact despite the House setback, and supporters said prospects for congressional enactment have been improved by, among other things, a provision that would increase from $100,000 to $250,000 the amount of federal insurance for deposits.

Not only that, there were more arguments that action by Congress was imperative light of troubled and erratic markets.

“No one is glad we have reached this critical point. … Now is our time to work not as Democrats, not as Republicans, but as guardians of the public trust,” said Sen. Harry Reid, D-Nev. He said he was hopeful the measure could clear Congress within days “so that by this weekend rolling around, we will have done what we need to do for the American people.”

Republican Sen. Mitch McConnell of Kentucky, the minority leader, said, “We believe that we have crafted a way to go forward and to get us back on track.”