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. But Corker said it was a necessary process.
“The last three days have been good for the American people,” Corker said. “It’s given the American people a chance to think about what’s going on. … It’s been a healthy process.”
As of press time Sunday, negotiators were waiting to announce a formal agreement, and House Republicans were meeting to decide whether to officially sign on to the package that was negotiated late Saturday night and early Sunday morning. It appeared that House and Senate leaders were not going to be able to announce an official deal until after the financial markets in Asia opened; they had sought to tamp down any world-market turmoil by doing so.
Corker said the fact that Minority Whip Roy Blunt (Mo.) was the chief negotiator for the House GOP would help to win support in that caucus, and Corker noted that he, too, was calling around Sunday to push the measure among House Republicans.
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 Financial Services Chairman Barney Frank (D-Mass.) explained earlier in the week that negotiators had to thread the needle between the neuroses of Wall Street and the neuroses of lawmakers who were being asked to vote for a politically difficult bailout weeks before an election.
Wall Street and Paulson demanded lots of cash in a hurry to bring confidence back to the frozen credit markets. But, lawmakers need help in explaining their votes to irate constituents who have been calling Member offices.
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 &*#8212; 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.
The Democrats’ trigger punts the idea of a fee on Wall Street to the next president and Congress four years from now.
But it appeared that the deal would still allow each side to claim victories — Paulson will have to deal with a labyrinth of oversight and auditing provisions and some restrictions on chief executive officer pay were adopted, although not nearly as much as was sought by liberal Democrats.
Unless the deal collapses, Paulson will get what he wanted: up to $700 billion to bail out Wall Street.
House Republicans pushed back on the notion that the deal they initially rejected on Thursday was the same deal that they appeared poised to embrace Sunday afternoon.
House Minority Leader John Boehner’s (R-Ohio) press office sent out two documents Sunday noting the key differences between what they called the “Frank-Dodd deal” from Thursday and the deal reached Sunday morning.
A document titled “MYTH vs. FACT on the Economic Rescue Legislation” states “Myth: Treasury will never use the insurance option. Fact: Treasury is mandated (Section 102) to establish an insurance program and set risk-based premiums. This will protect taxpayers by requiring the beneficiaries of the insurance program to pay risk-based premiums.”
House Democratic leaders also spent Sunday selling the plan to different factions in their Caucus — including sit-downs with the moderate New Democrat Coalition, the fiscally conservative Blue Dog Coalition, the Progressives and the minority TriCaucus.
Frank, walking into the office of House Majority Leader Steny Hoyer (D-Md.), explained that leaders wanted to make sure different wings of the Caucus understood the plan and were comfortable with it.
After the New Democrats broke, their chairwoman, Rep. Ellen Tauscher (D-Calif.), said 60 percent of her group supported the package and aimed to persuade the holdouts over the course of the day.
But others in Democratic leadership warned that Republicans would have to deliver as well. “One thing we’re not going to do is have this be a lopsided vote,” said Rep. Debbie Wasserman Schultz (Fla.), a chief deputy whip for Democrats.
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.
“I don’t know why there’s this perception that our Members want to vote for this,” the aide said. “We view this as the Republicans’ fault, and we’re having to vote for a package that looks like we’re giving $700 billion to Wall Street. That’s not what it is, but that’s what it looks like.”
John Stanton, Jennifer Bendery and Tim Taylor contributed to this report.