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THE NEXT STEP ON THE BAILOUT….It looks like the Senate will be taking up the bailout bill on Wednesday. How can they do this when revenue bills are required to originate from the House? Easy!

Apparently Harry Reid found some ancient mental health bill that the Senate had never acted on, dusted it off, and grafted the bailout legislation on top of it. Then he tossed in an increase in FDIC insurance limits to $250,000 (a bipartisan winner), loaded up a bunch of tax cuts that had already been approved by the Senate but hadn’t yet passed in the House, and voilà. Instant bailout bill.

So will it pass? Maybe so. After Wall Street’s reaction to the failure of Monday’s bill, public sentiment seems to be shifting:

On the morning after the sell-off, Congressional offices reported a shift in angry calls from constituents, with some demanding that lawmakers take some corrective action — a distinct change from the outpouring of public opposition that contributed to the defeat of the plan.

“I started hearing from a lot of people who lost money on their investments thanks to the big drop on Wall Street yesterday,” said Representative Steven C. LaTourette, Republican of Ohio, who voted against the plan.

This is not entirely unexpected. The original opposition, after all, probably didn’t reflect widespread sentiment so much as it did a narrow slice of highly motivated talk radio and Lou Dobbs fans. Nor is it unjustified. It’s true that the stock market isn’t a good proxy for the economy as a whole, but a plunging market does have an effect on the real economy. First, since corporations finance their operations partly through share offerings, dropping stock prices make it harder for companies to raise money. Second, although lots of rich people own stock, two-thirds of all stock is held in mutual funds and pension funds, which means a stock market plunge hurts a lot of very ordinary people too. Third, even though the market may not be a great proxy for the entire economy, it’s a pretty good proxy for the panic level among bankers.

And the current panic is hardly unwarranted. Our real problem is in the credit markets, and the credit markets are blinking fire engine red right now. Overnight bank lending rates have skyrocketed. Municipal bond markets have cratered. The two biggest providers of short-term credit to restaurant franchises, GE Capital and Bank of America, have exited the market. Rates on overnight commercial paper are up two points. This stuff doesn’t hit you or me in the pocketbook immediately, but it does eventually as spending drops, companies can’t get financing, and jobs get cut. You wouldn’t ignore a speeding truck just because it was still a few hundred yards away, and you shouldn’t ignore this either.

So sure: we should all hope that after the election we can pass legislation that attacks the roots of the financial crisis. This includes financial market regulatory reforms, macroeconomic stimulus, and broad relief measures. Maybe it even includes a better bailout program if this one isn’t enough. But right now, we have what we have, and complaining about it is like refusing to turn a fire hose on a burning building because you’re afraid the water is flouridated. It’s time to pass the bill.

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This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

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