Posts Tagged Harry Reid

Washington’s game of chicken on Wall Street crisis

September 26, 2008 at 2:41 am · Filed under Economy, Politics, domestic policy ·Tagged , , , , , , , , , , , , ,

First there was agreement – in principle – on a bailout package, and now there is not.  Why?

Secretary Paulson delivered his sweeping three page proposal to Congress last Friday.   Congressional leaders on both sides of the capitol (and the aisle) began negotiating the parameters of a retooled deal. They debated priorities like, does Paulson really need this much money upfront?  How do we know how much is needed?  Will taxpayers be left holding the bag, or is there a way to structure potential buyouts in such a way that taxpayers get any profits and Wall Street CEOs get chastened (with limited compensation packages).  And is there a way to help stop more home foreclosures?

All the while that the bipartisan, bicameral negotiators defined and addressed these questions, John McCain was refusing to take any clear position on the deal.  On Tuesday he claimed to not have read the Paulson proposal yet.  By Wednesday, a deal was in sight.  Word was most Senate Republicans would support it, thus Senator Bennett’s comment today that they had an agreement.

But while McCain waffled, House Republicans, led by the most conservative of them, were balking. They are up for re-election and a taxpayer bailout fundamentally violated the absolutist free market principles to which they adhere.  So even if John Boehner was open to the agreement taking shape in negotiations, it doesn’t mean the caucus is with him.  And even though Paulson reportedly reached out to McCain on Wednesday (the excuse to suspend the campaign), it’s not clear McCain can bring the caucus along either.  Speculation was (and still is) rampant that the rank and file GOP want to oppose the deal, while the Democrats grudgingly sign off.  It could pass, just barely, Bush would sign the bill, and Republicans would bludgeon Democrats over the next month as the party that used taxpayer money to rescue an unrepentant Wall Street.

And so that is the dynamic that took over in today’s meeting in the White House, in which John McCain reportedly took no stand and said little at all.  Neither House Minority Leader John Boehner nor John McCain can deliver the party, or afford to break with it.  And Nancy Pelosi and Harry Reid aren’t willing to risk being backed into a corner and locked into a deal with Washington’s least popular Republican, when $700 million dollars are at stake.  The question arises, should they just hold their nose, do the right thing and hope to talk taxpayers through why this was this right thing to do?  I’m not holding my breath on that one.

So what we have here is a game of chicken.  The upside to McCain will be if he and his renegade Republicans can force some of their alternative ideas onto a deal that gains bipartisan consensus. But no one has explained these ideas and McCain hasn’t backed them.  As I understand it a group including Eric Cantor (R-Va) and Jeb Hensarling (R-TX) want Wall Street “to pay for its bailout” by offering them government backed insurance, sort of like a homebuyer might buy mortgage insurance.  But if it is government backed – whatever that means – it still sounds a lot like our tax dollars at work, and I don’t see any potential profit at the other end, either.

So, could this all fall apart?  McCain has staked — rather, suspended — his campaign on getting a deal.  If he really wants a deal, can he force Republicans to move to the middle?  After the White House meeting with the candidates and congressional leaders, it wasn’t looking good.  Paulson later pleaded – reportedly on one knee?? – to Democrats, ”Please don’t blow this up!”  To which Pelosi said, ‘We’re not the ones trying to blow this up; it’s the House Republicans!” “I know, I know,” Paulson sighed.

Maybe it will turn out that Paulson, Democrats and Senate Republicans were being too easy on Wall Street and the sky won’t really fall without this bailout.  Maybe there is a better way to restore confidence without the government footing or fronting the bill.  No one is crazy about the idea of buying “toxic waste,” especially with Ben Bernanke admitting in Q and A on Capitol Hill, he can’t guarantee this will work, and that he’s “been wrong quite a few times before.” If there is a better way, I’d sure like to hear it.

It is equally possible that the Republican party (minus, unbelievably, President Bush), with a little help from the Democrats, gambled the stability of our capital markets today — and thus ordinary Americans’ access to home, car, construction or school loans for the forseeable future — for the sake of this election.  What else could we have expected them to do?

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Will they, or won’t they debate?

September 25, 2008 at 2:33 pm · Filed under Economy, Politics, domestic policy, foreign affairs ·Tagged , , , , , , , , , , , , , , , ,

Yesterday, John McCain suddenly announced he would be suspending his campaign, and returning to Washington to help broker agreement on the rescue/bailout package that congressional leaders and Secretary Paulson have been negotiating.  He also called to cancel tomorrow night’s debate.

David Letterman was miffed that McCain blew off a scheduled appearance on his show last night, in his “race to the airport,” but sat for an interview with Katie Couric instead.  So, Letterman rolled live footage of McCain getting his face powdered before the interview.  “Hey, I’ve got a question for you,” Letterman yelled at the onscreen image of McCain.  “Need a ride to the airport?!”

For his part, Barack Obama wasn’t having any of it.

“With respect to the debates, it’s my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess. And I think that it is going to be part of the president’s job to deal with more than one thing at once . . .”

“I think there’s no reason why we can’t be constructive in helping to solve this problem and also tell the American people what we believe and where we stand … So in my mind, actually, it’s more important than ever that we present ourselves to the American people and try to describe where we want to take the country and where we want to take the economy.”

President Bush went on the air last night to calm us all, and to explain why we won’t be able to get a car, home or school loan next year, even with a great credit record, if we don’t act now to stabilize our capital markets.  He’s right, actually.  But George Bush isn’t exactly someone most Americans feel confident in.

We are looking to the guy who, just over a month, is going to inherit this mess.  So, as Obama said, there is no better time to hold a nationally televised debate than now.

Senator Lindsey Graham, McCain’s debate negotiations pointman, had this to say yesterday: “We need a solution on this crisis more than we need a foreign policy debate.”  Oh, really?  I wonder what Mr. Graham had to say today, after Pakistani and American troops exchanged fire — with eachother — and Pakistan’s Prime Minister had this to say:

“We will not tolerate any act against our sovereignty and integrity in the name of the war against terrorism,” Pakistan’s prime minister, Yousaf Raza Gilani, told reporters on Wednesday. “We are fighting extremism and terror not for any other country, but our own country.”

And that’s not all.  Terrorist violence in Pakistan has been escalating,  and there are now reports that a “grim” new National Intelligence Estimate on the situation in Afghanistan is ready, but that it won’t be released until after the election.  Iran’s nuclear development activities aren’t on hold while Washington works to rescue Wall Street.  The North Korea deal still hangs precariously on the cliff of failure.  A new Israeli Prime Minister may or may not be able to hold a coalition government together to continue peace talks with the Palestinians, and with the Syrians.  Hugo Chavez gallivants off to see his new BFFs in Moscow every other month.  But hey, no biggie.  All that stuff can wait.

I agree with Financial Services Committee Chairman Barney Frank (never one to mince words) that McCain’s announcement was “the longest Hail Mary pass in the history of football or Marys.”  The negotiations include Senate and House leadership and the Senate Banking and House Financial Services committes.  John McCain will not be in the room at 10:00am this morning when the negotiators hammer out their remaining differences.  In fact, the negotiators will have to take a break from the actual business of negotiating to troop over to the White House and have a meaningless photo op with the President.  The president has little juice left for effective arm-twisting, and whatever lines in the sand he wants to express, are obviously represented for him by Hank Paulson.  The only thing that meeting could be good for is if Congressional leaders and Paulson have reached an agreement by the time they all arrive at the White House, and President Bush announces the deal when the “meeting” wraps.

At this stage, the arms that still need twisting are those members who don’t want the government, and thus the taxpayers, to have to front this money for Wall Street.  They are understandably angry, but they need to realize that things will only get far worse if we don’t act to stabilize the markets.  So the parameters really are around how much money truly needs to be fronted (Paulson is erring on the side of as much as he can have the authority to move around), what measures will be taken to penalize those at fault (limiting CEO pay, for example), what measures can be put in place to increase the likelihood and the amount of profit the taxpayer, and not the bailed out companies, will get later for fronting the money now, and, is there anything Congress can do to prevent more homes from being foreclosed (I have read about a proposal to allow bankruptcy judges to reset mortgage terms, but I doubt that would fly).

If John McCain wants to be useful, he should march over to Jeb Henslaring’s (R-TX) office and twist his arm.  “Jeb, I don’t like this anymore than you do,” he should say.  “But I need the caucus with me on this one.  I don’t want to be responsible for the deal failing, and Reid and Pelosi are threatening not to move if the GOP sits back on this one.  It sure would be nice to all buck the president, vote no and let the Democrats pass a socialist government takeover of Wall Street, but Harry and Nancy aren’t going for it.  So, I’ve come back to save the deal, right?  Seriously, I need you to shut up and fall in line.  You know, as if I were the leader of the Party now and I carried some real sway with you jerks?”

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McCain tries to ice the kicker

September 24, 2008 at 8:46 pm · Filed under Politics ·Tagged , , , , , , , , , ,

We’ve come to that point in the game.  There’s 7 minutes left in the 4th quarter, and team Obama is up by 10 points.  It’s Obama’s ball, fourth down.  It’s a little long, but a field goal is within his reach.  If Obama makes the points, the game is pretty much over; it’s just not that likely that McCain could come back with TWO touchdowns, let alone one.  So, stopping the Obama momentum is key.  So what does John McCain do?  He does the only thing he can–calls a time out, to ice the kicker.

Today McCain magnanimously announced he planned to stop campaigning as of tonight, urging Senator Obama to cancel Friday’s big debate, and to join him in a Kumbaya with President Bush and congressional leaders to get agreement on the stalled out bailout package, and get it through Congress this week.  [Nevermind that Senator Obama called Senator McCain at 8:30am to (according to the Obama campaign) seek a joint statement from the candidates, outlining principles and must-have's to get the bailout package moving, or that Senator McCain didn't call Senator Obama back until 2:30 this afternoon, minutes before announcing his bold new idea.]

On the face of it, this seems like classic McCain- in a good way.  When he sets his mind to it, he gets in there and brokers a deal.  Notably, he was one of the Gang of 14 in the Senate in an endrun around then-Majority Leader Bill Frist, who was threatening to change longstanding Senate rules to ram judicial nominations through the chamber (without the 60 votes normally necessary).  McCain likes a good fight, which is why he can be an effective negotiator.  Of course, he doesn’t win every battle (immigration reform), and he infuriates a lot of people with his belligerent manner (Senator Thad Cochran once said it sent a “cold chill” up his spine to imagine McCain with his finger on the nuclear button).

But classis McCain behavior is shaping up to be something other than the morally uncorruptible (since repenting his role in the Keating Five scandal) maverick the media loved so well eight years ago.  As loyal Reaganite conservative commentator George Will put it in yesterday’s Post:

For McCain, politics is always operatic, pitting people who agree with him against those who are “corrupt” or “betray the public’s trust,” two categories that seem to be exhaustive — there are no other people . . .

. . . the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either . . .

. . . It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency.

You might extend Will’s Queen of Hearts metaphor and call him a drama queen.  But his drama schtick didn’t stick over the last 10 days.  In fact it has backfired.  He’s come off as bobbing, weaving and raving, while his opponent, in comparison, kept a cool head.  After McCain ran an ad that falsely describes former Fannie Mae CEO Franklin Raines as an Obama advisor, his sudden offer of a bipartisan truce during the financial crisis rings hollow.

Senator McCain wants to drop everything for a couple days because he doesn’t want millions of Americans to turn on that television Friday night and take the measure of the men on a stage together at the end of what has to be McCain’s worst week since the near-death of his campaign last summer.  As Jonathan Capeheart writes, McCain desperately needs to change the subject.  Obama is up by 9 points in the Washington Post/ABC poll released today.  And while his campaign has, predictably, been trying to raise expectations that McCain needs to deliver a knockout punch on Friday to gain back the momentum, camp McCain might be worried about taking that punch itself.

UPDATE: According to Ole Miss officials, the show will go on.  Around 4pm today, Senate Majority Leader Harry Reid waded in (after which Obama also made a brief statement and declined to postpone the debate, noting that now more than ever, Americans need to hear from the candidates who will inherit the crisis just 40 days from now):

This is a critical time for our country.  While I appreciate that both candidates have signaled their willingness to help, Congress and the administration have a process in place to reach a solution to this unprecedented financial crisis.

“I understand that the candidates are putting together a joint statement at Senator Obama’s suggestion.   But it would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process or distract important talks about the future of our nation’s economy.   If that changes, we will call upon them.   We need leadership; not a campaign photo op.

“If there were ever a time for both candidates to hold a debate before the American people about this serious challenge, it is now.”

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