According to this Huffington Post by Tom D’Antoni, the reason Paulson was rushing to put the bailout deal through — and the reason Democrats are supporting the basic need for the bill — is because hedge funds come up for renewal on October 1st.
Without a shoring up of that market, D’Antoni explains, there would have been (and may still be) a run to pull out money from hedge funds that could have (and may still) spur a worldwide collapse:
During the White House meeting, it appears that Sen. John McCain had an agenda. He brought up alternative proposals, surprising and angering Democrats. He did not, according to someone briefed on the meeting, provide specifics. One of the proposals — favored by House Republicans — would relax regulation and temporarily get rid of certain taxes in order to lure private industry into the market for these distressed assets.
The real reason why there is such a [Democratic] clamor for [Paulson’s) bill, and a rush to get it passed is that there may be billions of dollars pulled out of the hedge funds…money that is due on October 1. This may be the famed October surprise, but one that nobody figured was coming. If that money is due and the hedge funds can’t pay, they will collapse.
But Paulson’s [Republican] Wall Street pals are clamoring for help to clean up the mess that their irresponsible lending and greedy practices brought us, with McCain only pouring fuel on the fire he and his GOP deregulatory cronies helped start.
More at this link: