Bipartisan Ship Sinks: Bailout Fails 9.29.08

In a decisive vote on Monday September 29^th, the US House of Representatives voted down the 110-page Emergency Economic Stabilization Act of 2008.  Following the surprising floor vote, the stock market in New York fell over 700 points.  A gasp from the Congressional leadership could be heard on Wall Street, K Street and over at the White House.    The Treasury Secretary Paulson, whose name was informally on the bill was very disappointed.    So what happened?   Why did the Members of Congress veer off the appointed script presented in press conferences by their leadership (both parties)?     Even the presidential candidates had to rewrite their speeches on the campaign trail.  And the pointing fingers of blame were out in force as the Members surveyed the vote results.

            The simple “blank check” for the US Treasury Secretary began as a three-page solution to the looming financial crisis was cooked up by the Bush administration, working with Secretary Hank Paulson (former Goldman Sachs executive) and the Democratic leaders in Congress.   The minority Republicans were excluded from the process.    While bipartisan by definition would include both the House and Senate (Democratic and Republican), in this case the majority lawmakers and the “lame duck” President were ready to cut a deal.    So confident were the Democrats in Congress that the initial talks to hammer out the Bail Out Bill were held with a just a few key Congressional leaders.    The minority Republicans could come along later, but didn’t need to be (as per the Dems) involved in negotiating the bill language.  

            But as the pig was being readied for market, a few things happened that slowed down and changed the original script.    First, while the folks on Wall Street were desperate for quick action by the politicians in Washington DC, the folks on Main Street were livid that a blank check from the taxpayers was being considered for the financial players in New York.    For the past 10 days, the taxpayer calls and communications from back home have been overwhelming in their “non-support” of the Bail Out Bill.     Second, the majority Democrats realized that they needed cover (a bipartisan vote) to pass the bill.    The final vote outcome indicates that most freshman (Dems & Reps) opposed the bill, so did those in tight races back home or those Members like the Democrat Udall cousins  (Mark from Colorado and Tom from New Mexico) who are running in contested races for the US Senate.  Third, presidential politics entered in as both McCain and Obama took differing approaches to the bail out package and debate.    In a grand gesture, Senator McCain suspended his campaign to head back to Washington to help broker a deal.    Senator Obama continued to campaign and prepare for the debate, but eventually flew back to Washington to be involved.    Finally, despite a plea from the President at a joint leadership meeting at the White House last Thursday, the tension and partisanship in Congress continued to mount going into the weekend. 

            So what about the bipartisan support, talked about by all sides but barely practiced in the process?    The House Republicans, who originally were considered not relevant by the House Democratic Leadership, were inspired by their Presidential candidate (John McCain) and began to weight in on the bill.    The House Democrats had to give nearly 100 of their members a “pass vote”, that is if the individual Members in tight reelection races forced them to do so, they could vote “No”. Thus, the Democrats realized that they still needed a number of GOP House Members to vote in favor of the bill.    As the Speaker of House delivered her prepared remarks on early on Monday afternoon, she departed from the script and delivered partisan diatribe on the eight years of Bush and GOP “fiscal irresponsibility, combined with an anything goes economic policy”.   For a video clip of Speaker Pelosi’s ad lib remarks, see www.politico.com or www.realclearpolitics.com In a city that is “all politics, all of the time”, the Democratic Leader iced the cake of bipartisan defeat.   40% of her own members voted “No” and the Republicans voted “No” by a 2 to 1 margin.  Congress maintained their 10% voter approval rating as Congressional leadership began the “blame others” debate immediately following the Bail Out Bill failure.   A call has gone out to the US Navy for a salvage vessel to come to Wash DC to refloat the bipartisan ship.   Maybe Obama or MaCain would be willing to captain that ship?

© 2008, Four Corners Media,  Jasper Welch   www.jasperwelch.org