Senate urged to back crisis bill

Shares remain volatile ahead of Wednesday’s key vote

Democratic and Republican Senate leaders have appealed for a new version of a $700bn (£380bn) Wall Street bail-out to be approved in a key vote.

Republican Mitch McConnell said it would shield Americans from “shockwaves of a problem they didn’t create”.

The plan needs support in the Senate and House of Representatives, which rejected a similar bill on Monday.

Senate Democrat Harry Reid said he hoped a strong show of bipartisanship would “spark the House to do the same”.

President George W Bush has been speaking to senators ahead of the vote. The White House said it hoped to see “strong support for the bill”.

“It’s critically important that we approve legislation this week and limit further damage to our economy,” said spokesman Tony Fratto.

US presidential hopefuls John McCain and Barack Obama are returning from the campaign trail for the vote, which is due to begin late on Wednesday.

Revised proposal

Global shares were mixed in Wednesday trading ahead of the vote.

By early afternoon on Wall Street the Dow Jones was down 0.2% or 30 points.

CHANGES TO BILL Raises government’s guarantee on savings from $100,000 to $250,000 Tax breaks to help small businesses and promote renewable energy Expansion of child tax credit and help for victims of recent hurricanes

But hopes that enough changes had been made to get the bill through saw shares close up strongly in Asia on Wednesday.

In Europe, the UK’s FTSE 100 finished 1.1% higher at 4,959.6 points, France’s key index added 0.6% while German shares fell.

Changes to the rescue plan involve lifting the US government’s guarantee on savings from $100,000 to $250,000 and a package of targeted tax breaks.

They are designed to answer critics who felt the original plan was weighted too much in favour of Wall Street while not enough was being done to help struggling American families.

To get through the Senate, the bill will require backing by 60 of the 100 senators. It would then return to the House of Representatives for a vote on Thursday or Friday.

Some members of Congress continue to press for more fundamental changes to the bill.

President Bush has warned of “painful and lasting” consequences for the US should Congress fail to agree a rescue plan.

The House’s rejection of the earlier version of the plan on Monday led to sharp falls on world stock markets.

In other developments:

• The European Union outlines its own proposals for reforming banking regulation which, if approved, could see dramatic changes to the way in which banks operate
• Russian Prime Minister Vladimir Putin says the “irresponsibility” of the US financial system is to blame for the crisis
• Ireland’s government discusses a move to guarantee all bank deposits with the EU Competition Commissioner

‘Painful recession’

In election campaigning on the eve of the vote, Mr McCain and Mr Obama urged politicians of both parties to work together to pass the emergency legislation.

Speaking in Reno, Nevada, Mr Obama warned that without action by Congress “millions of jobs could be lost, a long and painful recession could follow”.

John McCain said inaction by Congress was putting the US at risk

He added: “There will be a time to punish those who set this fire, but now is the moment for us to come together and put the fire out.”

Mr McCain, who campaigned in Des Moines, Iowa, said inaction by Congress had “put every American and the entire economy at the gravest risk” and that Washington urgently needed to show leadership.

“I am disappointed at the lack of resolve and bipartisan goodwill among members of both parties to fix this problem,” he said.

The vote comes a day before a TV debate between vice-presidential candidates Joe Biden and Sarah Palin.

Mr Biden, Mr Obama’s running mate, is also expected to take part in the Senate vote.

Meanwhile, ex-President Bill Clinton is to hold his first rally for Mr Obama.

Mr Clinton, whose wife Hillary lost to Mr Obama in a fierce primary contest for the Democratic nomination, is due to appear in Florida, where he will encourage people to register as voters before a deadline on Monday.

Palin takes battle to Democrats

Palin takes battle to Democrats

John McCain’s running mate, Sarah Palin, has made a stinging attack on Democratic presidential runner Barack Obama at the US Republican convention.

She gave her first major campaign speech to an enthusiastic crowd at the convention in St Paul, Minnesota.

Defending her small-town roots, she attacked Mr Obama as having talked of change, but done nothing of substance.

Mr McCain made a surprise appearance on stage, with her family, saying: “Don’t you think we made the right choice?”

The Arizona senator has been formally nominated as the party’s presidential candidate in a roll call vote by state delegations. He is expected to accept the nomination on Thursday.

I’ve learned quickly… , that if you’re not a member in good standing of the Washington elite, then some in the media consider a candidate unqualified for that reason alone Sarah Palin

In a speech designed to rally the party base, she spoke of her family, including her elder son, who is about to be deployed to Iraq in the US Army, and her younger son, who has Down’s Syndrome.

The mother-of-five highlighted her background as a small-town “average hockey mom” and stressed that she was not part of the “Washington elite”.

In a salvo directed at media commentators who have questioned her qualifications, she said she was “not going to Washington to seek their good opinion” but to serve the people.

Mrs Palin praised the “determination, resolve and sheer guts” of Mr McCain and said she was honoured to help him.

Mrs Palin also attacked Mr Obama’s “change agenda” and suggested he was more interested in idealism and “high-flown speech-making” than acting for “real Americans”.

“In politics, there are some candidates who use change to promote their careers,” she said.

I liked the parliamentary-style jabs at Obama BBC North America editor Justin Webb

“And then there are those, like John McCain, who use their careers to promote change.”

She also targeted Mr Obama’s experience as a community organiser and remarks he made earlier this year when he spoke of “bitter” working-class people “clinging to guns or religion”.

“I guess that a small-town mayor is sort of like a ‘community organizer’, except that you have actual responsibilities,” she said.

“I might add that in small towns, we don’t quite know what to make of a candidate who lavishes praise on working people when they are listening, and then talks about how bitterly they cling to their religion and guns when those people aren’t listening.”

Mrs Palin – who supports drilling for oil in Alaska’s Arctic National Wildlife Refuge – said that while drilling “will not solve all of America’s energy problems”, that is “no excuse to do nothing at all”.

Democrats under fire

Former Governors Mitt Romney and Mike Huckabee opened the night by hailing Mr McCain and attacking the Democrats.

Mr Romney, a one-time rival of Mr McCain for the Republican nomination, used his speech to hammer the Democrats over their “liberal” agenda.

“We have a prescription for every American who wants change in Washington – throw out the big government liberals and elect John McCain,” the former Massachusetts governor said.

He also lauded Mr McCain’s national security credentials, saying he was the presidential contender who would defeat “evil” radical Islam.

Mr Huckabee, also a former rival of Mr McCain, joked that he had hoped to be giving the speech on Thursday night – when Mr McCain will accept the party’s nomination to run for president in November’s election.

But, he said, he was delighted to be speaking for his second choice, Mr McCain – “a man with the character and stubborn kind of integrity that we need in a president”.

He defended Mrs Palin against criticism from the media, saying its coverage had been “tackier than a costume change at a Madonna concert”, and attacked the Democrats’ vice-presidential candidate Joe Biden.

You need to face your enemy in order to defeat them. John McCain will face this threat and bring victory to this country Rudy Giuliani

“I am so tired of hearing about her lack of experience. She got more votes running for mayor of Wasilla, Alaska, than Joe Biden got running for president of the United States,” he said, referring to Mr Biden’s performance in the Democratic primaries.

Former New York City Mayor Rudy Giuliani followed Mr Huckabee on stage, calling the 2008 presidential election a “turning point” for the people of the US.

He charged the Democrats with being in denial about the threat from terrorism and said Mr McCain had the foreign policy, national security and leadership experience that counted.

“The choice in this election comes down to substance over style,” he said. “John has been tested. Barack Obama has not. Tough times require strong leadership, and this is no time for on the job training.”

Vetting questions

The Alaska governor’s speech comes amid scrutiny of her record and after two days dominated by the news her daughter Bristol, 17, is pregnant.

Mrs Palin and her family, including Bristol and her boyfriend, greeted Mr McCain at the airport as he arrived in Minnesota on Wednesday.

Ahead of her address, senior McCain campaign adviser Steve Schmidt issued a statement saying that media questions over how thoroughly Mrs Palin was vetted should end.

It has also been revealed that an attorney has been hired to represent Mrs Palin in an Alaska state ethics investigation involving alleged abuse of power.

Mrs Palin told US network CNBC she had “nothing to hide”. Her deposition is expected to be scheduled soon.

There have also been reports that Mrs Palin sought special financial favors for her city and state – something the McCain campaign is against.

She was elected governor of Alaska in 2006 and before that was mayor of the small town of Wasilla, Alaska.

Democrats await key Obama speech

Mr Obama has been preparing for the historic nomination acceptance speech

Barack Obama is set to address US Democrats at the party’s national convention, a day after being chosen as their candidate for the White House.

Mr Obama, the first African-American to be nominated for president by a major US party, will formally accept his historic candidacy in Denver, Colorado.

On Wednesday, he was resoundingly endorsed by ex-President Bill Clinton.

Mr Obama’s speech comes on the 45th anniversary of Martin Luther King’s historic “I have a dream” address.

The Illinois senator has won over many critics, analysts say, and is aiming to consolidate his standing within his party.

Hours before her husband publicly gave Mr Obama his unequivocal backing at the convention, in a moment of high drama his defeated rival Hillary Clinton cut short a roll-call vote to endorse Mr Obama’s candidacy by acclamation.

Coronation grandeur

Former Vice-President Al Gore is also due to speak on Thursday, along with Democratic National Committee Chairman Governor Howard Dean, but the focus will be on Mr Obama.

His much-anticipated speech, scheduled for 2015 (0215 GMT), will be the highlight of the party’s carefully choreographed four-day convention.

It is likely to have all the pomp and grandeur of a coronation.

It is only four years since the would-be president gave a headline-making speech at the previous Democratic Convention.

Questions remain as to whether Mr Obama can cement his standing within his own party, and reach out to those parts of the electorate that are yet to be convinced by him, our correspondent notes.

‘New approach’

Mr Obama made a surprise appearance on stage on Wednesday after his running mate, Senator Joe Biden, accepted his own nomination for vice-president in a speech that was sharply critical of the Republican candidate, John McCain.

Barack Obama is ready to be president of the United States Former President Bill Clinton

“We want to open up this convention to make sure that everybody who wants to come can join in the party, and join in the effort to take America back,” he said.

Mr Biden stressed the need for a new approach to help Americans struggling to make ends meet and to change US foreign policy in the rest of the world.

The 65-year-old foreign policy expert was chosen as vice-presidential candidate by 47-year-old Mr Obama partly on account of his experience.

Clinton factor

In an address that was bound to be closely scrutinized for signs of discord, Bill Clinton, the last Democratic president, struck a firmly conciliatory note and stressed that he believed Mr Obama was ready to be president.

He said he was proud of his wife, Hillary – who had battled Mr Obama for the Democratic nomination – but that her supporters should now back Mr Obama.

It was stunning – a moment of brilliantly produced political theatre and a moment to cherish forever BBC North America editor Justin Webb, on the Obama nomination

“Barack Obama is ready to honour the oath to preserve, protect and defend the Constitution,” said Mr Clinton. “Barack Obama is ready to be president of the United States.”

In American political parlance Mr Clinton “delivered”, and may now find himself playing a higher-profile role in the campaign to come.

Earlier, Mrs Clinton had halted a roll call vote – in which each state, in alphabetical order, declares how many votes were cast for each candidate in the primaries – to call for Mr Obama’s nomination by acclamation.

In a powerful show of unity, she said: “Let’s declare together in one voice, right here, right now, that Barack Obama is our candidate.”

The presidential election on 4 November will pit Mr Obama against Mr McCain, who will be nominated next week at his party’s convention in Minneapolis-St Paul.

The Republican senator has said he has chosen his vice-presidential candidate, and US media reports the running partners will appear together at a 10,000-strong rally in the swing state of Ohio on Friday.

Obama introduces Biden at rally

US Democratic presidential hopeful Barack Obama has introduced veteran Senator Joe Biden as his running mate at a rally in Springfield, Illinois.

Mr Obama hailed Mr Biden as a “man with a distinguished record and a fundamental decency”.

Mr Obama confirmed his choice of running mate overnight on his website and with a text message after the news began to leak to the media.

The two men were making their first appearance following the announcement.

The Democratic campaign will be hoping Mr Biden’s presence will reassure voters who are concerned about Mr Obama’s relative inexperience, particularly in the international arena, says the BBC’s Rachel Harvey at the rally.

Republican presidential hopeful John McCain’s camp called the choice of Mr Biden an admission by Barack Obama that he was not ready to be president.

His spokesman also picked up on a slip of the tongue Mr Obama made on stage when he introduced his running-mate as “the next president”.

Hugs and cheers

At the place where he launched his presidential campaign a year and a half ago, Mr Obama outlined Mr Biden’s accomplishments in the Senate, his blue collar roots and – above all – his experience on foreign policy.

OFFICE OF THE VICE-PRESIDENT Second-highest executive officer in the United States Assumes the top role if the president cannot continue in office One of four statutory members of the National Security Council

“He’s an expert on foreign policy whose heart and values are rooted firmly in the middle class,” Mr Obama said.

He also emphasized Mr Biden’s drive for change, despite his 30 years spent in the Capitol.

“For decades, he has brought change to Washington, but Washington hasn’t changed him,” Mr Obama said.

He recounted the personal tragedy that struck Mr Biden more than 30 years ago, within days of his election to the Senate, when his first wife and their daughter were killed in a car accident.

After being introduced, a shirt-sleeved Mr Biden ran on to the stage and was embraced by Mr Obama to cheers from the crowd.

In his speech, Mr Biden referred to his own short-lived bid for the White House against Mr Obama for the 2008 nomination, before dropping out in January:

“You learn about a man when you debate with him, you see how he thinks. Barack Obama has the vision and courage to make this a better place. He is a clear-eyed pragmatist who will get the job done.”

At one point, Mr Biden garbled Mr Obama’s name, calling him “Barack America”. The crowd yelled back “Obama”.

Veteran politician

Mr Biden, a 65-year-old veteran lawmaker, is highly respected on foreign policy and is a six-term senator who serves on the powerful Foreign Affairs Select Committee.

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He has represented the state of Delaware in the US Senate since 1972.

Crucially, Senator Biden appeals to working-class Americans and was born in Pennsylvania, a key swing state in this election, our correspondent says.

Hillary Clinton, the former first lady who narrowly lost to Mr Obama during the tense battle for the Democratic nomination, issued a statement calling Mr Biden “an exceptionally strong, experienced leader and devoted public servant”.

John McCain has reportedly not yet settled on a running mate.

Mr McCain’s spokesman, Ben Porritt, suggested that Mr Obama’s slip in describing his running-mate as “the next president” reflected on his own inexperience.

“Barack Obama sounded as though he turned over the top spot on the ticket today to his new mentor…” he said in a statement.

“The reality is that nothing has changed since Joe Biden first made his assessment that Barack Obama is not ready to lead,” Mr McCain’s spokesman said.

Obama picks Biden as running-mate

Mr Obama could benefit from Biden’s foreign policy clout, analysts say

US Democratic presidential hopeful Barack Obama has announced that Joe Biden will be his running mate in November’s election.

Mr Obama’s choice, confirmed on his website, comes ahead of next week’s Democratic Party convention.

Mr Biden, a 65-year-old veteran lawmaker, has over three decades of Senate experience and is highly respected on foreign policy issues.

Republican contender John McCain could announce his choice next week.

Speculation is mounting that Senator McCain may name his running mate on 29 August, his 72nd birthday and a day after the Democrats wrap up their convention.

‘Impressive record’

The announcement came shortly after several US media networks began reporting that Mr Biden had been chosen.

“Barack has chosen Joe Biden to be his running mate,” a brief statement on Mr Obama’s campaign website said.

“Joe Biden brings extensive foreign policy experience, an impressive record of collaborating across party lines, and a direct approach to getting the job done,” it said.

The two men are expected to appear together at a rally in Springfield, Illinois, later in the day.

Mr Biden has represented the state of Delaware in the US Senate since 1972.

He is known as a strong orator and chairs the Foreign Relations Committee – something analysts say would balance Mr Obama’s self-confessed lack of foreign policy experience.

The son of a car salesman, he is also expected to appeal to the blue collar workers with whom Mr Obama has struggled to connect.

OFFICE OF THE VICE-PRESIDENT Second-highest executive officer in the United States Assumes the top role if the president cannot continue in office One of four statutory members of the National Security Council

The senator ran against Mr Obama and Senator Hillary Clinton for the presidential nomination but dropped out after failing to gain enough support.

The McCain camp called the choice of Mr Biden an admission by Barack Obama that he was not ready to be president.

“Biden has denounced Barack Obama’s poor foreign policy judgement and has strongly argued in his own words what Americans are quickly realising – that Barack Obama is not ready to be president,” McCain campaign spokesman Ben Porritt said in a statement.

John McCain has reportedly not yet settled on a running mate.

Minnesota Governor Tim Pawlenty and former Massachusetts governor Mitt Romney are reported to be under serious consideration for the role.