• US Presidential hopeful John McCain (Getty Images)
Presidential hopefuls Barack Obama and John McCain are set to hurry back to Washington for a key Senate vote on the $700 billion Wall Street bailout.
1 Oct 2008 - 1:10 PM  UPDATED 23 Aug 2013 - 11:52 AM

US presidential hopefuls Barack Obama and John McCain are set to hurry back to Washington for a key Senate vote on the $700 billion Wall Street bailout plan after it was rejected by Congress.

Campaign aides said the two senators, rivals for the November 4 election, would take part in the Wednesday evening vote days after the House of Representatives sparked turmoil by rejecting the original package.

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Senator Joseph Biden, Obama's vice presidential nominee, was also returning to Capitol Hill, aides said after a day of angry barbs between the two tickets trading blame for the emergency bill's failure.

Obama noted the bill's collapse had triggered a bloodbath on world markets, with $US1.2 trillion wiped off New York share values alone on Monday before a partial rebound on Tuesday.

That was not just a crisis for Wall Street, but for millions of US workers with a pension investment and small companies reliant on lines of credit to stay in business, he said Tuesday in the battleground state of Nevada.

'Long and painful recession'

It was an "outrage" that taxpayers were having to foot the bill for financiers' folly, Obama said, but stressed that without action by Congress, "millions of jobs could be lost, a long and painful recession could follow".

"There will be time to punish those who set this fire," he insisted. "But now is the moment for us to come together and put the fire out."

McCain said Tuesday in Des Moines, Iowa: "Yesterday the country and the world looked to Washington for leadership, and Congress once again came up empty-handed.

"I am disappointed at the lack of resolve and bipartisan good will among members of both parties to fix this problem," the Arizona senator said.

"Congressional inaction has put every American and the entire economy at the gravest risk," McCain warned, citing individual companies and student groups now struggling to get loans because of the credit crunch.

Both Obama and McCain have said they will vote for the bill, which would allow the government to buy up to $US700 billion in bad, mortgage-related debts from financial firms endangered by the collapse of the US housing market.

Risk of economic disaster

Backers hope a successful Senate vote will prod the House to come on board, with both McCain and Obama stepping up their appeals to party colleagues to put the risk of economic disaster ahead of their own misgivings about the bill.

Some lawmakers expressed cautious optimism about winning over House rebels in a second vote, after both Obama and McCain called for federal deposit insurance for US bank accounts to be raised for the first time in 28 years.

House Republicans want less direct intervention from taxpayers, and more indirect support from the government through such insurance schemes.

The White House rivals raised the idea of boosting the Federal Deposit Insurance Corporation (FDIC) deposit protection, from $US100,000 to $US250,000, in separate telephone calls to President George W. Bush.

"The presidential candidates' support for increasing the FDIC cap is welcome news," said House Republican leader John Boehner, who only reluctantly voted for the bill Monday and struggled to control his recalcitrant members.

High-stakes dash to Washington

McCain said he also urged Bush to let the Treasury use a $US250-billion "exchange stability fund" to directly shore up Wall Street firms, and inject a separate fund of one trillion dollars to buy up distressed mortgages.

McCain has far more political capital invested in securing a congressional deal than Obama, both as a member of Bush's unpopular party and after intervening personally with a high-stakes dash to Washington last week.

But while McCain battled to seize back the initiative, there was new evidence that Obama is enjoying a healthy polling bounce as voters turn on the Republicans.

The latest Gallup tracking poll had Obama ahead of McCain by 49 percent to 43. Another poll by ABC News found voters blaming Republicans for the bailout bill's failure, rather than Democrats, by a margin of two to one.

Obama was to head to Washington after a campaign rally in La Crosse, Wisconsin Wednesday morning, and McCain after giving an economic speech in Independence, Missouri.