Less than a week after pushing through legislation to impose a 90 percent tax on the bonuses, the House Financial Services Committee prepared a considerably milder proposal that would let Treasury Secretary Timothy Geithner and financial regulators decide if employee compensation was "unreasonable" or "excessive."

The panel was expected to endorse the measure on Thursday, paving the way for a floor vote as early as next week.

The proposal, sponsored by Democratic Reps. Alan Grayson of Florida and James Himes of Connecticut, would not force employees of insurance giant AIG to give back money already paid to them. But it would empower the government to stop future payouts by financial institutions even if employees have been promised the money.

The bill would exempt firms willing to participate in a government-sponsored program aimed at buying up $1 trillion of bad debt, or "toxic assets," sitting on the books of major banks.

Republicans opposed the bill because they said it was too vague.

"Private investors need certainty that Washington will not change the rules of the game while the game is being played," said Rep. Spencer Bachus of Alabama, the committee's top Republican.

But Democrats said it was necessary to protect taxpayer dollars. They pointed to a provision that would require Geithner to set standards to measure an employee's performance and the stability of a financial institution before bonuses are paid.

The 9th U.S. Circuit Court of Appeals on Wednesday rejected an appeal from the administration, saying U.S. District Judge Thelton Henderson can proceed with the hearings.

The Schwarzenegger administration is refusing to turn over $250 million as a down payment sought by a court-appointed receiver. The receiver, J. Clark Kelso, wants up to $8 billion spent on new medical centers for prison inmates.

The appeals court decided the case on procedural grounds. It did not weigh in on the larger question of how far the federal government can intrude on states' control of their prisons.

Lawyer Peng Jian said the Xinhua District Court in the northern city of Shijiazhuang is the first Chinese court known to have accepted a lawsuit in connection with the scandal.

Peng said Wednesday the suit was filed by a parent from Beijing whose child was one of thousands sickened by milk deliberately contaminated with the industrial chemical melamine.

Peng said the suit demanded 31,000 yuan ($4,538) in damages from the now defunct Shijiazhuang-based Sanlu Group. Peng said the 11-month-old victim became ill after drinking Sanlu's infant formula.

Investors reignited the market's two-week rally, cheering the government's plan to help banks remove bad assets from their books. They're also pleased with a report showing a surprising increase in existing home sales last month.

The Dow has ended the day up 497 points at 7,775 after rising more than 500 just before the closing bell. That was its biggest point gain in more than four months.

The Standard & Poor's 500 index is up 54 at 822 and the Nasdaq composite is up 98 at 1,555.

More than 2,800 stocks rose on the New York Stock Exchange, while just 262 fell. Volume came to a very heavy 1.91 billion shares.

WolfBlock LLP has more than 300 lawyers. The firm announced Monday that the partners have voted to shut down, but not immediately. They plan to keep operating for several months so the transition will be orderly for clients and employees.

WolfBlock says its core practice is real estate law and the recession has hurt that greatly. The credit crisis is another factor it the decision to close.

In addition to its Philadelphia headquarters, WolfBlock has offices in Boston; Cherry Hill, N.J.; Harrisburg, Pa.; New York; Norristown, Pa.; Roseland, N.J., and Wilmington, Del.

But Al-Marri's third trip to the area comes under far different circumstances — facing trial on federal charges alleging he supported al-Qaida terrorists. His first court appearance is Monday.

Al-Marri, 43, was arrested in late 2001 while studying at Bradley University in Peoria after federal authorities alleged he was an al-Qaida sleeper agent tied to organizers of the Sept. 11, 2001, attacks. He was a legal U.S. resident but became the only "enemy combatant" in custody on American soil.

He was held without charges for more than five years at a Navy brig in South Carolina.

Then, last month, a federal grand jury in Illinois indicted al-Marri on charges of conspiracy and providing material support to terror.

The scant Feb. 26 indictment offers no details on the long-awaited charges and federal officials are not discussing al-Marri's case.

Under current law, felons can't vote until they have served their sentences, including the completion of any parole or probation, and paid all restitution and other court fees.

A measure to remove that payment requirement — opponents say it's akin to a modern-day "poll tax" — has passed the House and awaits action in the Senate. If it becomes law, felons could simply re-register to vote once they're no longer in state custody, including any parole or probation.

"The basic unfairness is that our system is currently based on someone paying off their legal obligations," said Rep. Jeannie Darneille, a Tacoma Democrat who sponsored the measure. "If you have money, you can get your rights restored, and if you don't have money, you won't."

Washington's neighbor, Oregon, automatically restores voting rights to felons once they're released from prison. Nearly 40 other states and the District of Columbia also have less onerous restrictions on restoring voting rights to felons.

But others argue Washington state is obligated to make sure felons complete all of their sentence, including all monetary obligations.

"Until they pay their fines and restitution, to me, they haven't carried out their entire sentence," said Rep. Ed Orcutt, a Kalama Republican who opposes the bill. "So their voting rights shouldn't be restored."

Sen. Jeanne Kohl-Welles, a Seattle Democrat who sponsored a similar measure in the Senate, said felons will still need to pay off their debts, but won't have to wait to vote while they're doing so.

"It's more an issue of fairness," she said. "I don't think the right to vote should be based on one's income."