The negotiations regarding a second run at passing the TARP bill remain fluid, according to a note from RBS Greenwich Capital (RBSGC) just released.

RBSGC noted that to gain passage in the House, a net 12 votes need to be flipped. The strategy that Congressional leaders have adopted, economists from the firm said, is clearly to try to get more House Republicans. The Senate has tweaked the bill and will vote on it tonight after Rosh Hashanah ends at sundown.

So far, according to the firm, two main changes to the bill exist. The first is a proposal to increase the Federal Deposit Insurance Corp. deposit insurance limit from $100,000 to $250,000 temporarily (for 1 year). This was originally proposed by the House Republicans over the weekend, but there is not much resistance to it from Democrats.

The second change is to attach a tax extenders package that was caught in fighting between the House and the Senate over how much of the tax cuts should be offset. The House Democrats wanted more offsets, while the Senate, House Republicans, and the Administration wanted to pass the tax cuts with limited offsetting hikes.

"Indeed, most everyone seems sympathetic, so this can only help,” said Stephen Stanley, chief economist at RBSGC.

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