A sharply divided Congress approved President Barack Obama’s $787.2 billion recovery plan late Friday night, a huge political gamble for Democrats but also a vital beachhead for the new administration as it tries to turn around the collapsing economy.

Wrapped into the final measure is legislation seeking to impose tougher and retroactive pay limits on executives at banks receiving bailout funds from the Treasury. Engineered by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) the provision is provoking concern in the industry, but also reflects real anger among voters over the bonuses enjoyed on Wall Street.

House passage on the package came on a 246-183 vote – with no support from Republicans. Senate action followed on a 60-38 roll call that stretched for five hours in a near-empty chamber as Sen. Sherrod Brown flew back on a government plane from his mother’s wake in Ohio.

Three Republican moderates-Sens. Olympia Snowe and Susan Collins of Maine and Sen. Arlen Specter of Pennsylvania – voted for the bill. But with Sen. Edward Kennedy (D., Mass) ill with cancer, Brown became the needed 60th vote, forcing him to shuttle back and forth between Washington and Ohio where his mother’s funeral is Saturday.

Obama is expected to sign the measure Tuesday in Denver.

Most striking was the stonewall of Republican opposition in the House, even after huge job losses in January and the many changes made in the package since it was first debated weeks ago.

New tax breaks have since been added in negotiations with the Senate. The proposed spending levels are substantially reduced and the overall cost of the package scaled back by more than $30 billion.

Republican aides had predicted this week that 10 to 20 party moderates could join in supporting the bill. But the grassroots pressure from conservatives has been immense, raising fears of Republican primary challenges. The result appears to be a hardening of positions – dramatized Thursday by New Hampshire Republican Sen. Judd Gregg’s withdrawal as Obama’s nominee as Commerce secretary.

The mood in the Senate was more tempered, given the three Republican defections and the huge influence they had on reshaping the Democratic package. But in a bit of political theater, Obama’s defeated rival, Sen. John McCain (R., Ariz.) was given the task of raising the crucial budget point of order against emergency spending in the bill. Gregg, just a day after withdrawing his name for the Cabinet, supported McCain. And even as McCain congratulated Obama on his anticipated victory, he was scathing in his comments.

“That this is bipartisan legislation is simply not accurate,” he said. “We want to work with the other side, and this is not the example that I think the American people wanted.”

(Source: Politico)