If Rescue Passes, Here’s Who Gets Credit and Blame

Posted October 1, 2008 at 3:50pm

Staring into the abyss of economic ruin — to be followed quickly by political ruin — America’s political leaders are struggling to come together on a financial rescue package.

[IMGCAP(1)]With President Bush seemingly unable to convince anyone of anything, Sens. Barack Obama (D-Ill.) and John McCain (R-Ariz.) have abandoned ambiguity to call wholeheartedly for passage of a package.

And Congressional leaders once again are scrambling for a formula that will gain the 12 votes needed to pass the rescue in the House.

It’s emphatically true that the House’s 23-vote rejection Monday of what was widely tagged as a “$700 billion Wall Street bailout” constituted a massive, bipartisan failure of leadership.

Still, certain Members stood out as profiles in courage while their colleagues headed for the high grass. And some leaders deserve credit for trying to save the day — and for continuing to try.

Of 41 Members considered to be facing the toughest re-election races, only nine — six Democrats and three Republicans — bucked inflamed public opinion and voted to save the economy from ruin.

The roll of honor deserves to be called: Democratic Reps. Bill Foster (Ill.), Paul Kanjorski (Pa.), Tim Mahoney (Fla.), Jim Marshall (Ga.), Jerry McNerney (Calif.) and Christopher Murphy (Conn.).

And, even more so, the three Republicans, who did the right thing in the face of a Democratic tide raging against them: Reps. Mark Kirk (Ill.), Jon Porter (Nev.) and Christopher Shays (Conn.).

Kirk recommended to GOP leaders a political pact that might have saved the rescue package Monday — and might help pass a new one.

It is: Have the House campaign committees agree not to mount campaign ads against Members favoring the “bailout.” So far, the idea has gone nowhere.

Another standout is Rep. John Campbell (Calif.), whose support for the rescue may have cost him leadership of the conservative Republican Study Group. Other Members also deserve credit for their roles in trying to save the financial markets from lockdown — and the economy, from collapse.

Certainly Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, is at the top of the list for working with Treasury Secretary Henry Paulson to craft an acceptable rescue package — unsuccessfully, as it turned out.

Paulson was widely deemed the financial sector’s savior — a Wall Street David Petraeus — when he brokered the takeovers of Bear Stearns and the American Insurance Group and nationalized Fannie Mae and Freddie Mac.

Now, he’s being pilloried as a political George Custer for presenting Congress with a plan for massive government intervention in the economy with too few safeguards.

No question, Frank and Paulson erred in not fully consulting House Republicans as they worked up fixes, even though Speaker Nancy Pelosi (D-Calif.) had decreed that the GOP was expected to deliver at least 90 votes to pass the package and share ownership.

Even though McCain has been legitimately criticized for grandstanding when he announced he would “suspend campaigning” and perhaps postpone his debate with Obama last week, he did play a constructive role in gaining traction for House Republicans.

Kirk, a longtime McCain backer, gives his candidate credit for increasing the number of Republicans who voted for the package from 20 or 30 to 65 — far short of enough, but better than double its original support.

Facing a massive revolt, House Minority Leader John Boehner (R-Ohio) resorted to a Lincolnesque “team of rivals” strategy to recoup, appointing Minority Whip Roy Blunt (Mo.) as chief negotiator with Democrats and adopting the agenda of Chief Deputy Minority Whip Eric Cantor (R-Va.).

Cantor’s policy proposal was the work of Rep. Paul Ryan (Wis.), one of the smartest conservatives in Congress, and key Ryan ideas — chiefly, a loan option for banks alongside Paulson’s government buy-up of securities — were included in the final package.

Ryan also recommended the increase in Federal Deposit Insurance Corp. guarantees that’s now an agreed item, and introduced the proposal to suspend mark-to-market accounting rules, which he describes as liable to throw banks into “a death spiral” because no market now exists for their assets.

Ryan made one of the two best floor speeches of the day on Monday, declaring, “this bill offends my principles. But I’m going to vote for this bill in order to preserve my principles, in order to preserve the free enterprise system. This is a Herbert Hoover moment. He made some big mistakes in the Great Depression, and we have lived with those consequences for decades. Let’s not make that mistake.”

The other best speech — actually, the best — was that of House Majority Leader Steny Hoyer (D-Md.), who said, “When it comes to our economy, none of us is an island. We are all bound together in boom or bust, in growth or collapse, from the bankers on Wall Street to the smallest rural community that we represent.”

He went on to paint a vivid picture of the wide destruction that financial panic would cause to ordinary people and went out of his way to praise the work of all the Democrats and Republicans who had tried to save the day.

Hoyer’s speech was in utter contrast to that of Pelosi, who departed from her prepared remarks to rail against Republicans for causing the crisis before asking for their support in containing it.

GOP leaders lamely tried to blame her for the package’s defeat, when in fact they never could garner more than 70 GOP votes and ended up five short of that. Evidently, they failed to tell Democrats how short they were — else, why bring a loser up for a vote.

With both presidential candidates — and the lame-duck president — now working the problem along with bipartisan leaders in both the House and Senate, a rescue package should prevail.

If it does not — or even if it does — mark down the names of those who vote “no.” They are risking economic disaster for the country for the sake of ideology or politics.

But some people also are risking their careers to save the country, and they deserve due credit.