Some House lawmakers rethink bailout, some don't

WASHINGTON (Reuters) - A move in the U.S. Senate to add a few tax sweeteners and other changes to a $700-billion Wall Street bailout bill was prompting a rethink on Wednesday in some corners of the House of Representatives, but not all.

"The Senate measure has changed my position from 'No' to 'Heck no,'" Texas Democratic Rep. Lloyd Doggett told Reuters through a spokesman. Doggett was among House members who voted 228-205 to reject the bailout in a stunning vote on Monday.

He said that with the Senate add-ons "the bailout has gone from bad to worse -- $105 billion more in public debt worse."

But another Texas Democrat who voted against the bailout two days ago was Rep. Henry Cuellar and he was reconsidering.

"I'm glad we smacked it down the first time. It looks like it's already a better product," Cuellar said in an interview.

"Now at least I'm willing to consider the bill. I'm not saying yes, but I think I'm more leaning to consider the bill now that they've made it more broad-based," he said.

The Senate was expected to vote on Wednesday night on a revised version of the massive bailout bill first proposed on September 20 by the Bush administration. It had already been amended previously with numerous accountability provisions but was defeated in Monday's House floor vote that sent markets tumbling.

The House was expected to vote again on the bailout on Friday, said House Democratic Leader Steny Hoyer of Maryland.

The Senate was expected to approve its reworked bill that adds on a handful of tax breaks for the middle-class and others, and provides more insurance -- a maximum $250,000 per account instead of $100,000 -- for consumer bank deposits.

One of the tax breaks would extend a federal tax deduction for state and local sales taxes -- a measure important in states with no income tax, such as Texas, Florida and Nevada.

An aide to one lawmaker who voted against the bill on Monday said state and local tax deductibility issue is a big issue back home, but added that changing position on the bailout would be tough given a flood of constituent comments.

"Constituents are overwhelmingly opposed to it," the aide said, adding that about 90 percent of thousands of phone calls and e-mails from home are opposed to the bailout.

A spokesman for another lawmaker who voted "no" on Monday said the office was getting more phone calls from small businesses finding it harder to obtain loans in recent days -- a shift that could influence the lawmaker's next vote.

Ohio Democratic Rep. Dennis Kucinich, a former presidential candidate, criticized the Senate changes in a statement.

"The Senate took a dreadful bill that failed on the House floor, made no substantive changes to help homeowners or enact substantive regulatory protections for investors, and instead attached tax provisions that have absolutely nothing to do with the underlying financial crisis," Kucinich said.

He said he does support the Senate's proposed increase in Federal Deposit Insurance Corp protection for bank deposits, and added that he wrote to House leaders on Tuesday asking addition to the bailout bill of language "that would empower the Treasury to compel mortgage servicers to rework the terms of mortgage loans so homeowners could avoid foreclosure."

(Reporting by Kevin Drawbaugh and Karey Wutkowski; Editing by Tim Dobbyn)