House is winning converts to bailout

Peter DeFazio, D-Ore., said he still opposed the bill despite Senate inclusion of a program that pays rural counties hurt by federal logging cutbacks.

Beyond the Capitol, the drumbeat of bad economic news rattled on.

One government report said orders to factories plunged by the largest amount in nearly two years. Another said claims for jobless benefits hit a seven-year high. Investors appeared to be pulling money out of Wall Street and bracing for lengthy economic hard times.

Bush, meeting with business executives at the White House, said increasingly tight credit markets are not just hitting big banks in New York City but threatening the existence of small businesses across the country.

The modified Senate bill would extend several tax breaks popular with businesses, provisions that are favorites for most Republicans. It would keep the alternative minimum tax from hitting 20 million middle-income Americans, which appeals to lawmakers in both parties. And it would provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.

Help for rural schools was aimed mainly at lawmakers in the West.

Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others. Ros-Lehtinen singled it out as one reason she changed her mind.

Democratic leaders circulated data showing which states benefit most from an extension of a tax break for homeowners who do not itemize their tax returns. Texas, Florida, California and Pennsylvania ranked among the highest. The leaders hope the measure will bring support from black lawmakers, many of whom voted "no" earlier this week, among others.

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Contributing: Terence Hunt, Ben Feller, Matthew Daly, Sam Hananel, Kimberly Hefling, Andrew Taylor and Erica Werner, Associated Press

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