WASHINGTON – The Senate strongly endorsed the $700 billion economic bailout plan Wednesday night, leaving backers optimistic that the easy approval, coupled with an array of popular additions, would lead to House acceptance by Friday and end the legislative uncertainty that has rocked the markets.

In stark contrast to the House rejection of the plan Monday, a bipartisan coalition of senators – including both presidential candidates – showed no hesitation in backing a proposal that had drawn public scorn, though the outpouring eased somewhat after a market plunge followed the House defeat. The Senate margin was 74 to 25 in favor of the White House initiative to buy troubled securities in an effort to avoid an economic catastrophe.

Only Sen. Edward Kennedy, who is being treated for brain cancer, did not vote.

The presence in the Senate of both presidential candidates in the final weeks of the campaign gave weight to the moment. The political tension was clear as Sen. Barack Obama walked to the Republican side of the aisle to greet Sen. John McCain, who offered a chilly look and a brief return handshake.

In the House, officials of both parties said they were increasingly confident that politically enticing provisions bootstrapped to the original bill – including $150 billion in tax breaks for individuals and businesses – would win over at least the dozen or so votes needed to reverse Monday's outcome and send the measure to President Bush.

Besides the tax breaks, senators also made a change that had drawn widespread support in recent days – an increase in the amount of bank deposits covered by the Federal Deposit Insurance Corp., to $250,000 from $100,000. And the entire package was attached to legislation requiring insurers to treat mental health conditions more like general health problems – a long-sought goal of lawmakers who demanded such parity.

As the shape of the new bill became clearer Wednesday, some House Republicans and Democrats indicated that the changes were enough to get them to take another look at the measure and perhaps change their minds – even though the new items being added would substantially increase the burden on taxpayers.

Rep. John Yarmuth, a Kentucky Democrat who voted no Monday, said he found the new proposal more acceptable, as did Rep. Jim Ramstad, a retiring Republican from Minnesota who voted in opposition as well.

"The inclusion of parity, tax extenders and the FDIC increases has caused me to reconsider my position," Mr. Ramstad said. "All three additions have greatly improved the bill."

Leaders of both parties in the House said they were identifying other potential converts as well, and were finding a more receptive audience for the revised measure because of the tax package and other changes.

While popular, the tax breaks, which had been the center of a bitter dispute between House and Senate Democrats, caused problems as well.

A coalition of centrist Democrats led by Rep. Steny Hoyer of Maryland, the majority leader, had refused to back the tax benefits unless they were deficit neutral – offset by tax increases or spending cuts elsewhere. The bill now includes the Senate version of the tax plan, which adds most of the cost to the deficit over the next decade.

But the Senate leaders decided to present the House with a take-it-or-leave-it choice, and it is possible some Democrats could desert the bill over the tactic.

In the end, Senate leaders decided to overcome some of the ideological and political resistance that doomed the measure in the House with the tried-and-true congressional approach of stuffing the bill with provisions that would make it hard for many lawmakers to resist.

"All I'm trying to do is get this thing passed," said Senate Majority Leader Harry Reid of Nevada, denying he was trying to jam the House by giving members no choice but to accept the tax proposal he favored or again reject the bailout.

The multiple tax breaks, called extenders in the Capitol because they renew or extend expiring tax benefits, appeal to many lawmakers and could provide a political argument for backing a bill that has otherwise been very unpopular.

Instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.

"This bill has been packaged with a lot of very popular things to give it even more momentum," said Sen. Jeff Sessions, R-Ala., an opponent.

The approximately $150 billion in new tax breaks, which offer incentives for the use of renewable energy and relieve 24 million households from an estimated $65 billion alternative minimum tax scheduled to take effect this year, would be offset by only about $40 billion in spending cuts or tax increases elsewhere.

Moreover, the increase in federal deposit insurance will not be financed over the short term, as the insurance program now is, by assessing premiums on banks that benefit. Instead, banks will get an open-ended line of credit directly to the Treasury Department.

But the Congressional Budget Office noted Wednesday that federal law requires the banks to eventually make up any shortfall and any loans to be repaid, though not until at least 2010.

The changes in the bill were measurable by volume. The initial proposal from the Treasury Department ran just three pages; the latest version is 451.

Beyond what they described as the fragile economy, lawmakers and aides said they saw another factor in the new drive to dispose of the bill and recess Congress for the elections. Polls suggest the economic fight is taking a toll on Republicans and their presidential candidate, Mr. McCain, and they want to put it behind them.

"We have to get out of here and get our guys back home campaigning," said a senior Senate Republican aide who did not want to be quoted by name expressing anxiety about his party's electoral prospects.

The Senate version of the federal financial rescue plan keeps the core of the plan that was rejected by the House on Monday but adds new provisions.

SENATE ADDITIONS

Taxes: Extends a number of tax breaks and credits.

ORIGINAL KEY POINTS

Purchase of assets: The Treasury Department will use the funds to buy troubled assets and purchase equity in distressed financial firms.

Oversight: Establishes a board to monitor the program regularly; requires the president to establish a plan to recoup the cost from the financial industry if, after five years, there are any losses.

Executive pay: Places restrictions on executive compensation for companies that benefit from the program.

SOURCES: The Associated Press; Bloomberg News; McClatchy Newspapers

In addition to increasing the limit on federal bank deposit insurance, the Senate hopes to attract votes from constituencies with some of the following sweeteners:

Provide business tax breaks, including for production of, investment in, and use of renewable fuels.

Require group health plans that include mental health or addiction treatment to provide coverage for those conditions that is equitable to other medical coverage.

Increase personal credits against the alternative minimum tax, shielding more than 20 million taxpayers from the tax.

Grant tax relief to victims of natural disasters, such as Hurricane Ike.

Extend through 2011 a program that funds rural schools and local governments that have low property-tax bases because they lie within or are adjacent to federal lands.

Extend until the end of 2009 the deduction for state and local general sales taxes.

Extend until the end of 2009 individual tax breaks, including deductions for higher education costs and teachers' personal expenses.

SOURCE: The Associated Press

How the vote broke along party lines. The two independent senators' votes aren't included.

33

YES

15

NO

40

YES

9

NO

YES

OBAMA

YES McCAIN

YES CORNYN

YES

HUTCHISON