So a 700billion $ bailout is just a big stunt.
Um, that's what the Senators are for, to handle situations LIKE THIS when they arise. Someone needs to let BO know that. He was hired by the people to be a Senator and handle these situations, he wasn't hired just so he could run for POTUS 143 days into his first term.
WOW, you truly can't make this stuff up.
No, the bailout is not a stunt.
But McCain running to Washington was.
On Tuesday, that is the day before he made his announcement to suspend his campaign and run back to Washington if you didn't catch that date, McCain stated publicly that he had not even read the treasury proposal yet. Must have been a quick read. But then, they do things fast in that campaign; realize that the essentially strong economy may not really be, foreign policy experience in a day, etc. etc, etc.
The bipartisan group was just about at agreement before McCain swooped in. They ended today bitterly divided because McCain/Bush sprung a conservative alternative, excluding Paulson.
So, he actually did more harm than good by inserting presidential politics into the discussions. It actually nauseates me that he had to politicize something that was working just to boost his own poll numbers.
And your right, you can't make this stuff up.
White House Summit Ends on Sour Note
(Sept. 25) - A high-profile White House meeting on Treasury's $700 billion Wall Street rescue plan ended Thursday on a sour, contentious note, with no joint endorsement by the two presidential candidates, Sens. John McCain and Barack Obama.
Democrats complained of being "blindsided" by a new conservative alternative to the plan first put forward by Treasury Secretary Henry Paulson.
And the outcome casts doubt on the ability of Congress to move quickly on the matter, even after leaders of House and Senate banking committees reached a bipartisan agreement Thursday on the framework for legislation authorizing the massive government intervention.
It was McCain who urged President Bush to call the White House meeting attended by House and Senate leaders as well as Obama, his Democratic rival. But the candidates left without commenting to reporters outside,
and the whole sequence of events confirmed Treasury's fears about inserting presidential politics into what were already difficult negotiations.
Wall Street had posted a gain of 197 points earlier in the day, buoyed by hopes of an agreement. The markets had closed by the end of the White House meeting, but Friday could bring turmoil, and there will be immense pressure now by Treasury to get back on track before Monday.
McCain could feel that same pressure, and having called for the meeting, he will have to show if can deliver the votes of House Republicans, many of whom have been leery of him in the past. Mindful of this, the senator's campaign issued a brief statement an hour after the breakup of the meeting.
"We're optimistic that Sen. McCain will bring House Republicans on board without driving other parties away, resulting in a successful deal for the American taxpayer."
By the end of the day, Paulson appeared bruised on two fronts. He was not part of the Capitol discussions in the morning, which stretched to nearly three hours and will now require extensive follow up with Treasury. At the same time House Financial Services Committee Chairman Barney Frank (D-Mass.) said he feared McCain was undercutting Paulson by appealing to conservatives in the House.
"McCain and the House Republicans are undercutting the Paulson plan, talking about a wholly different approach," Frank said prior to the meeting. "This is the presidential campaign of John McCain undermining what Hank Paulson tells us is essential for the country."
Wisconsin Rep. Paul Ryan, the ranking Republican on the House Budget Committee and one of the authors of the conservative alternative, said that McCain had yet to sign onto the proposal. But Ryan confirmed that he and other House Republicans had met with the Arizona senator on the issue prior to the White House meeting in the offices of House Minority Leader John A. Boehner (R-Ohio).
"Our goal is not to derail. Our goal is to break the logjam. It's a Plan B if Paulson can’t pass," Ryan said. "This is such a crisis I'm not going to draw some line in the sand. We can't leave without doing something, but we don't think the votes are here for Paulson."
From Frank's perspective, this can be a self-fulfilling prophecy since Republicans will be able to peel off the administration plan and claim they are still taking action. "Nancy is not going to pass a bill with Republicans having an excuse to vote against it," Frank said of House Speaker Nancy Pelosi (D-Calif.). And given the cost of the Treasury plan, Democratic leaders have warned that they will want at least a healthy Republican showing of 80 to 100 votes if they are going to ask their members to vote with the president.
Frank is among those members closest to Paulson. And while the secretary wasn't included in the Capitol meeting earlier in the day, the House chairman and leading senators in both parties saw those talks as providing a real bipartisan foundation for progress this weekend.
"We think we have fundamental agreement on a set of principles," said Senate Banking Committee Chairman Chris Dodd (D-Conn.). "We're very confident we can act expeditiously, and we've done a good job arriving at that kind of consensus."
Those principles will include improved oversight of the program, as well as a plan to phase in the $700 billion investment in stages, while still assuring the administration a virtual free hand for at least the first $350 billion.
There is a greater emphasis on efforts not just to relieve Wall Street firms of their bad debts but also to help homeowners threatened by foreclosure. Companies that benefit from the plan would be expected to limit pay and severance packages for their executives, and community banks are expected to benefit from a new $3 billion tax break as a result of their stock losses in the government takeover of the two mortgage finance giants, Fannie Mae and Freddie Mac.
Prior to the White House meeting, Sen. Bob Bennett (R-Utah) predicted legislation could be finalized in time for Congress to act this weekend. Sen. Judd Gregg (R-N.H.), who participated in the talks and has close ties to the White House, conceded that portions of the package won’t be to Treasury's liking, but the agreement was a step forward.
"There are things they won’t be comfortable with — obviously there was a lot of give on both sides," Gregg said. "I think they may be very concerned about some sections of it, but the overall thrust of it will be to give them the authority they need to address the underlying problem, which is to get these securities out of the blocking pattern that they are in relevant to the credit markets. This will allow the Treasury secretary to go and clean up the credit markets using basically tax dollars."
Paulson had asked for the $700 billion funding authority as part of his initial bill, arguing that the large number is an important signal to the markets of the government's commitment. Nonetheless, the administration has since paid a heavy political price for not better explaining its initiative as an "investment" by taxpayers — and one which will surely be repaid to some level as the economy improves.
The whole debate has exposed an angry anti-Wall Street cultural divide, and Paulson, a former Goldman Sachs CEO, has been the target of critics who argue that "Main Street" taxpayers are being asked to aid other wealthy bankers. Getting the full $700 billion, without any encumbrances, has become almost impossible politically in Congress.
The proposal agreed to in the Capitol meeting would allow $250 billion immediately followed by another $100 billion, for a total of $350 billion. What happens to the second $350 billion is sure to be the subject of intense bargaining still with Treasury. But lawmakers signaled that Congress would have the authority to deny any more money through a joint resolution—but that would have to overcome a presidential veto to do so.
Apart from Treasury, much will depend on how the markets react to this phased-in approach to the funding.
In testimony this week, Paulson and Federal Reserve Chairman Ben Bernanke have emphasized that the government will proceed carefully — suggesting that not all the money is needed up front, in fact. But the administration and Federal Reserve officials argue that the psychological impact of the $700 billion commitment is important in itself, and Treasury will want to be sure it has access to the second $350 billion.
The cost debate illustrates just how nuanced the massive intervention will be. Paulson has often stumbled this week when trying to describe its intent, and the clearest voice has been Bernanke, a former college professor who casts the whole effort as an unprecedented experiment in "price discovery" that will add not just capital but also precious knowledge to jump-start the credit markets.
With the bursting of the U.S. housing bubble, mortgage-related securities are caught in a vicious downward cycle, commanding only "fire sale" prices, Bernanke says. The government purchases, through a series of novel auction mechanisms, will help the market value these assets, he says. And this could be the spark needed to get markets working and the economy’s engine turning over again.
This explanation is very different from the "bailout" imagery that surrounds the debate. And the great challenge for both sides has been to find some path in between these two poles — able to satisfy the anger voters feel for Wall Street but also leaving enough room for Bernanke's experiment to function.
One issue where this comes up is the question whether Treasury should demand warrants or options to hold stock in the companies — a way, perhaps, to turn a profit for taxpayers in the future. Many Democrats argue that this is only fair given the risk the Treasury is assuming by buying up the bad debts. But Bernanke worries that it will be seen as a punitive step and discourage companies from participating — and thereby reduce the competition in the market.
He is a terrible debater
