Bailout Bill in Turmoil
The Battle of the Bailout has taken a strange turn. Yesterday afternoon, Sen. Chris Dodd (D-CT), the chairman
of the Senate banking committee and the man largely responsible for writing the nation's banking laws, together
with his House counterpart, Rep. Barney Frank (D-MA), announced that he was pretty close to a consensus on what
should be in the bill. Later in the afternoon, a number of leaders met at the White House to discuss the details.
Sen. Richard Shelby (R-AL), emerged from the meeting and
blasted the bailout
saying: "There's still a lot of different opinions. Mine is: It's flawed from the beginning."
Earlier this week at a hearing Shelby said:
"The Treasury's plan has little for those outside of the financial industry.
It is aimed at rescuing the same financial institutions that created this crisis with
their sloppy underwriting and reckless disregard for the risks they were creating."
Shelby was originally elected to the Senate in 1986 as a Democrat but switched to the GOP after the Republicans
took control in 1994. He is now the ranking Republican (i.e., minority leader) on the Senate Banking committee
and generally a proponent of tighter government regulation (in other words, while he can be labeled an
opportunist for jumping ship in 1994, deep in his heart he is a still populist Southern Democrat).
All in all, the Republican Party is deeply divided on this bill. While Democrats can stomach the idea if
the taxpayers get something (like stock) in return for their money and certain other conditions are met
(like limiting CEO salaries to that of the President),
Republicans fundamentally oppose government intervention in the markets and even wrote this
opposition into their
three weeks ago. In fact, yesterday a group of Republican congressmen
led by minority leader John Boehner (R-OH) floated an
that would have the banks set up (with their own money) an insurance system to guarantee troubled mortgages and
leave the government out of the loop. Such a plan would be fully in keeping with the traditional Republican
principle of having the free market police itself. Only then the banks wouldn't get a $700 billion freebie
from the taxpayers, something that a few of them have suggested they could live with, principles or no principles.
Secretary of the treasury Henry Paulson opposes this alternative plan. Barney Frank basically said that unless the
Republicans can agree on a bill, there will be no bill. Democrats were not about to stick their necks out
and vote for a highly unpopular bill just before an election and then have the Republicans hammer them for it
unless the Republicans also vote for it.
All the meetings ended at 10:30 P.M. with no agreement. The NY Times
headline on the story starts with
Talks Implode During Day of Chaos.
That about sums it up.
Curiously enough, although John McCain came roaring into Washington to solve the problem, he has been
quiet as a mouse since getting there. In particular, he has not given any indication whether he supports
Boehner's plan or Paulson's plan. If he could forge a compromise, he might look good, although Democrats would
surely note that all he had done was bring warring factions of the Republican Party together, not working
with the Democrats.
Washington Mutual Goes Belly Up
As if to underscore, the problems banks are having with bad motgages,
the U.S. government
the failing Washington Mutual yesterday and sold off pieces to J.P. Morgan.
This is the largest bank seizure in U.S. history, and there may be more to come, depending
on what happens on the bailout front.
Psychological Warfare, Friday Edition
When John McCain abruptly paused his campaign and flew to Washington,
he also put the presidential debate scheduled for tonight on hold. Barack Obama has called his bluff and
said he will be at the University of Mississippi in Oxford, MS
tonight and looks forward to debating McCain there. McCain, in turn, has said he
won't go to Mississippi until the economic crisis is solved.
To a large extent, McCain has taken a riverboat gamble because (1) he is not even on the Senate banking
committee and Dodd won't give him the time of day, let alone a real role in shaping the bill, (2) the
ranking member of the banking committee (Shelby) opposes the bill, and (3) the House Republicans are in
open revolt against the President. If McCain tucks his tail between his legs and flies to Mississippi to
debate Obama at Ole Miss, he will hardly look like a man of action who flew to Washington, banged heads together, and
got a bill. On the other hand, if he stays in Washington to work on the bill (meaning fighting Dodd, Shelby,
and the House Republicans) Obama will ask the moderator, Jim Lehrer, to
town hall meeting
with questions from the audience. That would
be an unmitigated disaster for McCain. Obama would get at least an hour of free TV time and look like
a President at a press conference fielding questions in a mature way and McCain would look like
just another squabbling congressman. Of course, McCain knows this very well so he will try really, really
hard to get a bill today so he can fly off to Mississippi in triumph.
Dodd, of course, knows all this, too, and will try to extract huge concessions from McCain
(which he knows Boehner will never swallow)
in return for a bill today. It's all high-stakes poker with Paulson, Bush, Dodd, Boehner, McCain and
Obama all having different interests. Anything is possible at this point.
Americans Want the Debate Tonight
A new SurveyUSA
yesterday shows that 74% of Americans want the tonight's debate to be held on schedule.
About 23% want it postponed. Only 3% don't know, a fairly low percentage that
indicates almost everyone is tuned into the metadebate about the debate. Thirty-one percent want the focus changed
to the economy. There is no significant difference between men and women. Whites are evenly split on hold the debate
vs. cancel the debate whereas blacks favor holding it 66% to 17%. Latinos want it 60% to 21%. There are two
possible causes for the large number of blacks who favor the debate. First, Obama wants to hold it as scheduled.
Second, Mississippi has the highest percentage of blacks in the country (37%) and some blacks may see canceling
a debate in a state with such a large black population as an insult.
Sen. Ted. Stevens Trial Has Started
Sen. Ted Stevens (R-AK) trial started with prosecutors trying to first establish that he received
additions to his home worth $250,000, which he then concealed on official Senate forms. Stevens claims
he was in Washington and wasn't in the loop concerning renovations to his house or who was paying for them.
CQ Politics has
Straniere Stays on the Ballot in NY-13
A day without news about the zany congressional race in NY-13 (Staten Island and a bit of Brooklyn) is
no fun at all. The latest update: Republican candidate Robert Straniere was nominated to be on the New York
supreme court and he
turned it down.
He said that he won his primary 2 to 1 and fully intends to become the next congressman from NY-13. So it
will be New York city councilman Mike McMahon (D) against Straniere. Given how divided the Republican party
is over their candidate and how unified the Democrats are, McMahon is the odds-on favorite to win the open seat.
We have 20 presidential polls today.
One very ominous poll for John McCain is in North Carolina,
which is a statistical tie (Obama 49%, McCain 47%). North Carolina
is not supposed to be a tie. It is supposed to deliver a crushing blow to
Obama. Bush won it by 12 points in 2004 and 13 points in 2000. Even the
southerner Bill Clinton didn't win it. If McCain is going to have to fight
hard for bulwarks like North Carolina and Virgina*, that is going to take
time, energy, and money away from the true swing states like Ohio and Colorado.
Also of note today are the blue states where Obama has been having problems.
He has small leads in New Hampshire, Pennsylvania, and Wisconsin. Michigan is
another story. This is a really a must-win state for Obama and McCain had been making
inroads there. There are three Michigan polls today. Mason-Dixon says it is tied,
FD puts Obama ahead by 8 points, and the legendary Ann Selzer puts it at Obama 51%, McCain 38%,
a huge margin. That's quite a difference.
We also have 5 Senate polls. Two are especially noteworthy. In North Carolina, state senator
Kay Hagan (D) is again leading Sen. Elizabeth Dole (R-NC). In three of the four most recent polls,
Hagan has been ahead. The fourth was a tie. Dole was expected to win this one easily, but she has
a real fight on her hands. DSCC Chairman Chuck Schumer has been pouring money into this race and
it is clearly having a big effect. On the other hand, Democrats thought they had a good challenger
to Sen. Susan Collins (R-ME) in Rep. Tom Allen, but his campaign has fizzled. Collins looks like
she is on her way to reelection.
|| Joe Biden*
|| Christine O\'Donnell
|| Sep 22
|| Sep 23
|| John Kerry*
|| Jeff Beatty
|| Sep 23
|| Sep 23
|| Tom Allen
|| Susan Collins*
|| Sep 22
|| Sep 23
| North Carolina
|| Kay Hagan
|| Elizabeth Dole*
|| Sep 23
|| Sep 23
|| Jeff Merkley
|| Gordon Smith*
|| Sep 22
|| Sep 23
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