For a quick, one-stop synopsis of the Mother of All Bailouts (as of this month), see this readable version at Clusterstock (we’ve become a recent convert to this site).
Reader and sometimes contributor Lune, who was once a Congressional staffer and still subscribes to the the inside-the-Beltway press, provided a wrap of their coverage of the bailout bill. It makes clear that everyone understands that turning Hank Paulson’s three pager into a 110 page draft made for a nice fig leaf but made virtually no substantive difference.
Well folks, we’re almost to a done deal (certainly closer than Thursday). The Hill papers are reporting that they’re getting closer in both the Senate and the House to the needed votes to pass the new bailout bill. Roll Call gives the most frank assessment of what happened over the weekend in an article entitled “Same Bailout, New Dynamic” (subtitle: Outrage Prompts Sales Effort).
All the late-night talks, last-minute demands and dramatic pronouncements aside, the fundamental structure of a $700 billion Wall Street rescue plan that Congress spent the weekend wrangling over has not changed significantly from the outline proposed by a bipartisan group of Senators and House Members last Thursday.
“This is in essence the same,” said Sen. Bob Corker (R-Tenn.), who attended those talks.
. . .
Assuming enough House Republicans agree to vote for the package, it appeared that the House could vote as early as today, while the Senate might have to wait to take it up Wednesday after Rosh Hashana on Tuesday.
“If it doesn’t pass, we shouldn’t be in Congress,” a confident Sen. Judd Gregg (R-N.H.) said on Sunday, adding that he thought the measure would pass with broad bipartisan support in both chambers.
Members and staff disagreed about why the bones of the package stayed the same but took so long to hash out.
Negotiators on Saturday added a mortgage insurance program to the proposal at the request of rebellious House Republicans, though that plan is unlikely to be used by failing companies given the Treasury’s ability to take bad debt off the books of troubled financial firms. That means the high-stakes negotiating sessions over the weekend served mainly to generate buy-in and political cover for Republicans and Democrats.
Some Democrats said the time between Thursday and Sunday was largely wasted on back-and-forth talks that yielded few changes. In addition, there was the distraction of presidential nominee Sen. John McCain (R-Ariz.) inserting himself into the mix, they said.
“They were very close to an agreement on Thursday,” one senior Senate Democratic aide said. “Then John McCain blew into town and blew things up for three days. Now, they have virtually the same agreement now that they had before, with a couple of options in it that [Treasury Secretary Henry] Paulson will never use.”
One Senate Democratic leadership aide echoed that notion, saying, “This is largely based on the draft we had Thursday morning. … Once we got past the McCain shenanigans, the legislative process took over and people worked very hard to work out an acceptable agreement.”
. . .
House Republicans proposed a mortgage insurance idea so Wall Street could fund its own bailout. House Democrats proposed a pay-as-you-go trigger requiring a fee on financial firms if the bailout results in losses for the Treasury.
The political goal was the same — both sides wanted to be able to tell constituents that Wall Street, not average citizens, would pay for the bailout.
But neither proposal won out — the mortgage insurance idea will largely be a side option for the Treasury secretary, and Paulson reportedly already rejected the proposal in internal Treasury talks this summer.
. . .
A senior House Democratic aide at press time estimated that Democrats could wrangle about 125 votes for the plan, meaning GOPers would need to find nearly 100 supporters in their ranks if the numbers remained unchanged.
All eyes are on the House. From another article in Roll Call entitled “House Moves Shakily Forward on Bailout“:
Both the House Republican Conference and House Democratic Caucus spent hours cloistered in closed-door sessions Sunday night as Congressional leaders tried to gather support for the package within their own ranks by putting outstanding questions about it to rest.
All eyes are on the House Republicans, who threw talks on a deal into disarray Thursday when they abandoned bipartisan, bicameral negotiations with the White House.
. . .
The bill filed tonight is “a giant improvement” over previous proposals, namely because it considerably reduces taxpayer risk, House Minority Leader John Boehner (R-Ohio) told reporters after the meeting.
“At the end of the day, there really is no taxpayer risk in this bill,” Boehner said, referring to mandated insurance provisions in the package.
Asked how many Members will vote for the bill, Boehner said he didn’t know but that GOP leaders “are working on it. … I made it pretty clear to our Members that we are supporting this.”
. . .
At one point, Rep. Mike Pence (R-Ind.) [Ed: chair of the Republican Study Committee, a conservative Republican caucus in the House which has been the primary roadblock to the bailout plan] received “a tepid response” when he proposed starting from scratch and coming up with a new bill, according to one aide.
. . .
Rep. Scott Garrett (N.J.), a member of the influential Republican Study Committee, told reporters outside the Conference meeting that at least some of the conservative group will back the plan, although he said he would be voting against it.
And finally, the wizard behind the curtain is revealed (“It’s Frank’s World, We Just Live In It“):
In case there was any doubt who was running the show over the past week, or how confused even most Members were about what was happening with the Wall Street bailout, a few lawmakers confirmed it for us.
A handful of Members — guys who are ostensibly getting briefings and actually sit in on meetings — were apparently so confused about the status of the bailout, they sunk so low as to actually join press scrums (those knots of lowly reporters crowding a particularly in-the-know Member) around House Financial Services Chairman Barney Frank to try to get a clue.
Is it any surprise that Congresspeople elected for their ability to clear brush or deliver sound bites with a photogenic smile are about to cast one of the most important votes of their careers without a clue about what they’re voting for? Winston Churchill once said “The best argument against democracy is a five minute conversation with the average voter”. The American corollary to that adds a 5 minute conversation with the average elected representative…