Whats important to remember here is that if we dont take this type of stabilizing action, the cost to the taxpayer in lost jobs, lost savings, lost opportunity, is huge, Budget ranking member Judd Gregg (R-N.H.) said.
Democrats werent immune from divisions as well. Senate Banking Chairman Chris Dodd (D-Conn.) reiterated his concern that House Financial Services Chairman Barney Frank (D-Mass.) was making a deal with the White House without Senate input.
You cant go off on this one side doing something that the other side doesnt know about, Dodd said.
But when asked why he wasnt present in the room with Paulson and Frank, Dodd said it was because of the nature of the institutions. Pressed further about why he didnt insist on being in the room, Dodd said, Were not going to get into that.
But some Senate Democrats said they felt Paulson was finally willing to make a deal on the package, after hearing from him and Bernanke earlier in the day.
Sen. Charles Schumer (D-N.Y.) said he was heartened that Paulson and Bernanke reacted favorably to his suggestion that the industry pay into a fund that would partly finance the plan, similar to Federal Deposit Insurance Corp. for bank deposits.
This is almost the beginning of a negotiation, Schumer said. I do think theyre open to suggestions. The fact that they went along and said theyd be open to an [industry-funded program] that I asked them about. Thats a big step because that means some of the money will come from the industry.
Schumer also floated the notion of giving the Treasury a portion of the $700 billion now and revisiting the success of the program in January. But Paulson was not as supportive.
I think that would be a grave mistake, the secretary said. This is about market confidence, and we need to have the tools to do it right.
House Democrats were warning that Bush would have to line up significant GOP support to pass the package and said the president needs to use the bully pulpit.
The president needs to sit down in the Oval Office and talk to the American people, House Majority Whip James Clyburn (D-S.C.) said.
But a GOP leadership aide complained Democrats havent reached out yet.
Until the Democrats start negotiating on a bipartisan basis, it is hard to know exactly what we will be considering, or what level of GOP support it would garner, the aide said.
Democrats, however, said Republicans have been invited to every meeting and have been given every draft proposal.
This is a Republican package, said Nadeam Elshami, spokesman for Speaker Nancy Pelosi (D-Calif.). We took their package, and we are taking steps to make it more accountable to the taxpayers, add transparency and oversight, add protections for homeowners and deal with the executive compensation. ... The Speaker has said we are going to insulate Main Street from this Wall Street crisis, and we are moving forward.
But both sides face heat internally, with liberals upset with what some see as a handout to Wall Street cronies and with conservatives who are appalled at the unprecedented intervention in the free market.