The Senate leadership just blew an opportunity for adequately revising the bailout bill.

The Senate bill does nothing for people who need help the most: people who are facing foreclosure.

It doesn’t resurrect the Glass-Steagall act to divide regular banking from financial banking.

It doesn’t outlaw or even regulate the kind of swapping and trading that precipitated this mess.

As Senator Russ Feingold said on Sept. 30, “negotiators must address the deeply flawed regulatory structure that paved the way for this crisis. The administration and others have said such reforms must wait for another day, but once a rescue package is enacted, we lose the leverage needed to enact tough reforms to get the financial sector to clean up its act, and we risk having to deal with this same mess all over again.”

But the authors of the Senate bill discarded their leverage even before they brought the bill to the floor.

What the bill does is raise the limits on insured deposits from $100,000 to $250,000, which is being sold as way to help small businesses bank enough safely for payroll. But it will surely allay the fears of the wealthiest people in this country, who don’t want to be bothered to go to different banks to park their surpluses over $100,000.

And it gives this same group of people a break by revising the Alternative Minimum Tax, which was designed to make sure the rich pay their fair share.

Plus, it extends business tax credits.

Oh, it does a few good things—though they have nothing to do with the current crisis.

It expands the child tax credit.

It enshrines mental health parity for insurance, which Paul Wellstone pushed long ago.

And it provides incentives for renewable energy, which we also need.

But as for clearing the rot on Wall Street, it does nothing.

The Democrats in the Senate could have brought a bill to the floor that would have won over progressives in the House, especially in the Black Caucus and Hispanic Caucus, who insisted on some help for people facing foreclosure.

Instead, the Senate leadership decided to try to mollify reactionaries in the House.

Once again, Harry Reid blinked.