The Bush administration’s forceful lobbying effort failed Tuesday to win support from rank-and-file Republicans or Democrats for a $700 billion Wall Street bailout package, though GOP and Democratic leaders still planned to move a bipartisan bill by the end of the week.
The administration deployed Vice President Dick Cheney and Office of Management and Budget Director Jim Nussle to appeal to restive House Republicans, but rank-and-file Members aren’t embracing it. And Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke faced deep skepticism from the Senate Banking, Housing and Urban Affairs Committee, despite warning that failure to act promptly could provoke a steep recession sparked by frozen credit markets.
The rank and file in both parties expressed deep concerns about anything resembling the $700 billion that the White House wants, and leaders struggled to keep their Members open-minded in the face of surging outside opposition from a diverse range of voices from former Speaker Newt Gingrich (R-Ga.) and the Club for Growth on the right to liberal bloggers on the left.
The dynamic had GOP and Democratic leaders hunkered down and in the same boat — they all support moving forward quickly but are being pulled in opposite directions by their rank and file.
Senate Majority Leader Harry Reid (D-Nev.) referenced what he called the “disarray” among House Republicans and indicated that he saw a similar situation developing in the Senate. Reid said Democrats on the Senate Banking Committee were not confident that more than one Republican would vote to support the plan.
“We need some Republican votes, and they’ve got to start lining those up,” Reid said. He hinted that uncertainty over Republican presidential nominee Sen. John McCain’s (Ariz.) position on the issue was causing problems in shoring up GOP support.
“We need the Republican nominee for president to let us know where he stands on what we should do,” he said.
Reid said he was committed to staying in session beyond this Friday if that would result in a bipartisan consensus.
“We’re going to finish this at the right time, not some arbitrary date,” Reid said. However, Senate Democratic aides indicated that the majority was looking to finish all of its work before the start of the Rosh Hashana, which begins at sundown Monday.
Despite Reid’s remarks, Republican leaders said they broadly agree on an economic response, and Senate Minority Leader Mitch McConnell (R-Ky.) announced that his Conference is largely in favor of limiting the compensation of CEOs whose companies avail themselves of a government bailout — a proposal Democrats first floated.
“We’re anxious to act, and to act quickly, to restore confidence in the markets and in our country,” McConnell said.
But several GOP Senators acknowledged that Republicans are having a hard time getting comfortable with what has been called the largest bailout in history.
“This is the last thing anybody wants to do. If we do it, it’s because it has to be done. This isn’t Republican philosophy being advanced. This is solving an emergency problem,” Senate Minority Whip Jon Kyl (R-Ariz.) said.
Senate Republicans sought to turn the debate around from one about a taxpayer-financed bailout for Wall Street to one of “market stabilization” that would benefit average Americans seeking small business or car loans.
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