The US House of Representatives meets again tonight (Asia time) after a two-day Jewish new year holiday, and by all indications, it looks like the legislators are expected to salvage a modified version of the $700-billion US financial bailout bill that they rejected on Monday.

Investors are counting on the bill to alleviate the US credit crisis, prevent a financial and economic meltdown, and stabilise Wall Street and other markets worldwide.

ôCongress must act,ö according to US President George Bush. The political weight of those words are in question after Bush failed to secure the congressional vote in the first place even after his constant public pleas, a joint meeting at the White House with US presidential candidates John McCain and Barack Obama, and last-minute phone calls to dozens of lawmakers.

However, one would think that a historic 778-point drop on Wall Street on Monday in reaction to the HouseÆs unexpected rejection of the bill that was to save America from more financial distress and spare the world from further grief, would be enough to put things in perspective. Add to that sharp falls in stock markets worldwide.

The rescue plan put forward by US Treasury secretary Henry Paulson and Federal Reserve chairman Ben Bernanke was in the form of a three-page bill called Troubled Asset Relief Program. That bill was later modified, expanded to 110 pages by the House, and renamed the Emergency Economic Stabilization Act of 2008 û earning the distinction of becoming the largest economic rescue in the US since the Great Depression of 1929.

The bailout bill aims to unfreeze credit markets by having the Treasury buy problematic assets (mostly mortgage-backed securities) that are causing distress among financial institutions. The hope is that doing so would prevent more financial institutions from failing in the aftermath of Lehman BrothersÆ collapse. The justification is that the bill û while indeed amounting to hundreds of billions of dollars in US taxpayersÆ money û will end up costing the taxpayers and the whole economy less in the long run. On a best-case scenario, the problematic assets that the Treasury shores up now are expected to increase in value when the crisis abates and the markets turn.

The failure of the bailout bill to pass the House vote by a slim margin (228 in favour and 205 against) on Monday has made the legislators easy targets of the wrath of politicians supposedly looking out for the best interests of the country, financial market players looking for the solution û temporary or not û to the current mess, and everyone in America and elsewhere in the world affected by the current turmoil. The House will likely take action again on the bill on Friday, according to a spokesman for House Speaker Nancy Pelosi.

The fact that the Senate has swooped in to save the day by voting in favour of a modified bailout bill has made the House look even worse. Democratic and Republican leaders of the Senate have urged the House to drop their objections to the bill.

The anticipation of the passing of the bill in the Senate helped Wall Street regain a significant portion of the $1.2 trillion that it lost that eventful Monday after the House vote. That also kept losses in stock markets worldwide at bay. On Wednesday (US time), the Dow Jones Industrial Average closed at 10,831.07, up from MondayÆs close of 10,365.45.

The bill was passed in the Senate by a vote of 74 to 25 after more than three hours of floor debate on Wednesday night (Thursday morning Asia time). The core of the bill involved the plan to use $700 billion to buy troubled assets from financial institutions. The bill also contained some new provisions, aimed at attracting more votes in the House.

An example of a new provision in the bill passed by the Senate is one that temporarily raises the Federal Insurance Deposit Corporation (FDIC) insurance cap to $250,000 from $100,000. The bill allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit. The bill also includes tax breaks for individuals and businesses that could reduce federal tax revenue by $110 billion over 10 years.

How could the House turn its back on the bill now, for a second time, with the whole world watching? It appears improbable given the developments in the past two days, but after MondayÆs surprise rejection, what lies ahead remains far from certain.

True, the House has become an easy mark for all the displaced anger. ItÆs convenient to blame legislators whose votes appear to have been largely influenced by angry calls and emails from constituents upset at the idea of bailing out Wall Street. Never mind that this whole mess was created by those very financial institutions that are in need of saving.

Even if the bailout bill passes in the House, the mess in US financial markets remains. What the bill will do, at most, is help contain the situation. Anyone who thinks the bill will do more in the interim has lost a grip on reality. For sure, the mess will need months, if not years, to be cleaned up.

The US bailout should head off a continued meltdown in credit markets and gradually steer them to return to more normal conditions. It should take some of the pressure off shares by removing worst-case fears of economic depression.

What happens if the House fails to pass the bailout bill this time around?

Without a comprehensive approach to fighting the credit crisis in the US, the Federal Reserve, Treasury and other agencies will be forced to keep doing what it has been doing these past months û flooding the financial system with liquidity, cutting interest rates further, and dealing with the problems of financial institutions on a case-by-case basis, as we saw with Lehman Brothers, which was allowed to fail, and AIG, which was deemed more worthy of saving. In the absence of a comprehensive plan, thereÆs nothing to stop financial markets in the US and the rest of the world from continuing their downward spiral.