What's new in the second bailout plan?

Two big things. About 150 per cent more insurance for bank deposits and $100 billion of tax breaks

What does the beefed-up insurance scheme involve?

Wrapped into the new rescue Bill is a proposal to allow America's Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury. The funds would be used to insure far more of Americans' savings in the event that other banks go bust.

At the moment, anyone who has deposits in an American bank or a credit union has their savings insured by the FDIC, up to $100,000. But members of Congress have grumbled that while $100,000 covers the deposits of most Americans, it is less than a small business may have in a company bank account, and less than the savings of some wealthier middle class families across the US. Under the new plan, that insurance threshold would rise to $250,000 in a move designed to inject confidence in the banking system and stem the number of Americans withdrawing their savings.

Does the new insurance scheme represent a problem?

Yes. It means that Washington would have to pick up a much bigger bill in the very likely event that more banks fail. The current federal insurance fund is already running uncomfortably low, having been tapped by the string of 12 banks which have collapsed this year already. The fund only has $45 billion in it at the moment, compared with the $4.5 trillion worth of deposits it insures.

Is the bigger insurance scheme likely to be popular with voters?

Yes. The plan is expected to address the financial worries that ordinary Americans have about the banking crisis, to protect their money, rather than just bailing out well-paid bankers on Wall Street.

Who is supporting the new insurance scheme?

Both presidential candidates - Barack Obama and John McCain. It has also secured the support of Chris Dodd, head of the Senate Banking Committee. The Republicans had grumbled that the beefed-up insurance scheme should have been in the first rescue plan, and that they had asked for it, only to be rejected.

What's staying in the new scheme that was also part of the first, rejected bailout Bill?

The plan for the Treasury to buy $700 billion worth of toxic debts from troubled banks and sit on them until conditions improve and they can be sold back into the market. The right to increase the national debt to $11.3 trillion to pay for the fund.

What are the tax breaks being offered?

The Bill is proposing to reintroduce $100 billion of tax breaks for middle-class Americans and businesses that had expired or were about to expire. There are also tax breaks for entrepreneurs who are trying to develop alternative energy. The tax cuts will affect 20 million middle-income Americans who are already struggling to cope with rising food prices, persistently high petrol costs and increasingly limited credit facilities. Democrats are anxious about the tax cuts because there is no provision in the Bill to claw more tax revenues from elsewhere, and the national debt is set to rise to a record $11.3 trillion.

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