Rank-and-file Members on both ends of the political spectrum fearing a voter backlash are resisting the deal between Congressional leaders and the White House for a $700 billion Wall Street bailout package.
Negotiations between the White House and House and Senate leaders hit snags Monday on the policy and politics front.
House Minority Leader John Boehner (R-Ohio) has urged Republicans to back the bailout to prevent a financial collapse and urged Democrats to avoid packing it with add-ons.
And Democrats do not want to be seen as blocking an economic rescue.
But leaders in both parties also faced insurrections, as Rep. Mike Pence (R-Ind.) sought to rally Republicans against the bailout.
Nationalizing every bad mortgage in America is not the answer, Pence said in a letter to his colleagues. We should demand consideration of free market alternatives to massive government spending and we should fight to pay for the solution through budget cuts and reform instead of more debt or taxes.
Rep. Brad Sherman (D-Calif.) also was organizing a group seeking to put numerous conditions on the new fund, including the creation of a three-person panel that would have the authority to veto purchases.
Why should the Department of the Treasury have total carte blanche? Sherman asked. This is just a license to hand out money in return for trash. Cash for trash.
Divisions among Democrats were palpable Monday, as Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) and House Financial Services Chairman Barney Frank (D-Mass.) worked on two different bills and the two chairmen appeared not to be talking to each other about what would pass in their chambers.
Dodd said Monday that Franks decision to begin negotiating with Treasury Secretary Henry Paulson before having talks with Senate Democrats could cause more problems than it solves.
Its a risky way to proceed in my view. Its far better to spend your time and find out how your colleagues feel over here, Dodd said. My approach has always been before you negotiate with the White House always get your act together up here. ... Announcing youve got a deal that doesnt pass muster with your colleagues youre running into a buzz saw.
Dodd said Mondays volatility on Wall Street was more the result of the unrealistic expectation that a deal would be announced Monday than a reaction to Democrats decision to call for more oversight. A speedy announcement that also gets rejected tell me how the markets going to react to that, Dodd said.
Dodd said his initial attempts to negotiate with Frank and Paulson ran into opposition from his fellow Senate Democrats.
Still, Dodd acknowledged that he would not likely get all the taxpayer protections and assistance for homeowners that he is asking for.
I realize at the end were going to have something pared down. Its not going to be as much as I want or something someone else would want. But thats how it works, he said.
Democrats were generally united in pushing for taxpayer protections, an oversight committee and controls on bank executives compensation, while also angling for leverage to pass a $50 billion stimulus package and other measures long resisted by Republicans.