The U.S. Senate easily passed a $700-billion financial rescue package last night, taking the first step toward easing a credit crisis in the United States two days after a congressional rejection of the package caused a global stock market selloff.

The 74-25 bipartisan vote in favour of the bill came after it was sweetened with a number of measures aimed at getting Republicans in the House of Representatives onside so the bill can receive full Congressional approval and head to the desk of U.S. President George W. Bush by tomorrow.

The so-called sweeteners will come with a steep price tag because they include a number of tax breaks that will add to the U.S. deficit and inflate the cost beyond $700 billion.

Passage in the House in a do-over is hardly guaranteed. Some conservative Democrats might now flip their support because of the unrestrained spending in the Senate version of the bill.

The goal of the legislation remains the same -- it would allow the government to spend billions of dollars to buy bad mortgage-related debt and other toxic assets held by teetering financial institutions.

It would free up $250 billion immediately to allow Treasury Secretary Henry Paulson to step in and take the bad assets off the books, allowing frozen credit to begin flowing again and keep the economy from a deep recession.

Both presidential candidates, Democrat Barack Obama and Republican John McCain, made rare returns to Washington to vote in favour of the package.

"There will be time to punish those who set this fire,'' Obama said on the Senate floor, where he had not cast a vote since July.

"But now is not the time to argue about how it got set ... right now we want to put out that fire, and now's the time for us to come together and do that."