The House of Representatives voted on Monday to begin debate on legislation for a financial markets rescue plan, clearing the way for a final vote later in the day that would send the measure to the Senate.

The plan would give the Treasury Department up to $700 billion in buying power to acquire mortgage assets from troubled financial institutions.

If the measure passes the House, it will be sent to the Senate for a vote that is expected by Wednesday. The legislation would then go to President George W. Bush for his signature and enactment.

Once the plan becomes law, the Treasury will have to establish the process by which it will buy the hard-to-trade assets that have clogged balance sheets and led to tighter lending. Policy-makers hope that by loosening credit markets, they can help restore the financial system to health.

House leaders are pushing for a vote by early afternoon, ahead of observance of the Jewish New Year which begins at sundown. Still, the debate could be prolonged by skeptics of the plan.

Under the plan, Treasury would focus on buying investments tied to the floundering housing market which has been battered by defaults and foreclosures.
(Reuters)