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Politics and the Bailout

John Moe

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Senators Harry Reid Chris Dodd work on the bailout
(Photo by Mark Wilson/Getty Images)

The market meltdown on Wall Street converged with Presidential politics this week. CQ Politics reporter Jonathan Allen takes us to the high drama unfolding in Washington as members of Congress wrestle with the the biggest bailout in American history.


John Moe: Where are we today in terms of this legislation?

Jonathan Allen: Well, right now you've got staff for a lot of the principals who have been negotiating this: The House Financial Services committee chair Barney Frank's staff; the Senate Banking Committee chair Chris Dodd's staff; and then on the Republican side, Senator Judd Gregg's staff and House Minority Whip Roy Blunt's staff all sort of getting together and trying to write this thing. They're negotiating some points, they're simply working on language on things that have been agreed upon. And at some point, I think they'll bring the members of Congress back into the room and let them work out the final sticking points.

Moe: And what are you hearing about last night's debate? Because the bailout and the economy were discussed pretty heavily.

Allen: Well, there's been a lot of partisan sniping on Capitol Hill about the inclusion of the presidential candidates, particularly Senator John McCain - whether that was something that helped move the process along, or was a detriment to the process. Democrats in particular saying it was a bad idea and that it blew apart an initial framework for a deal; Republicans saying that John McCain was helpful in bringing some concerns that House Republicans had to the fore and maybe then getting some Republicans on board. Democrats in the House don't have the votes to pass this on their own but wouldn't want to be on the hook for all that responsibility. It remains to be seen a little bit what the effects of last night's debate will be. I mean, we saw both candidates sort of dodge the question at first of whether they were eventually going to support a bailout. And then we heard John McCain say that he would vote for one. Without, by the way, seeing the final details.

Moe: This past week, there's been a lot of hastily called meetings, a lot of special trips, a lot of photo opportunities, too. What is the sense of urgency this weekend in terms of getting something done? How much on fire is people's hair this weekend?

Allen: Earlier this week, I feel like there was panic but no urgency, in that everyone was saying Wall Street was burning and Main Street would soon be on fire - and yet nobody was really urgent about getting anything done. I think as time passes and we get closer to the opening bell Monday on Wall Street, you're seeing more urgency to get a deal in place, or to at least send the signal that it's very, very close to being in place so that the market doesn't respond negatively to inaction in Congress.

Moe: And thus Barney Frank's statement that he hoped to have something in place on Sunday. This is really a weekend story, isn't it?

Allen: You know it does still hold that they are attempting to get something done by Sunday. The good news for them is that while this legislation deals with a lot of complicated issues, it's not the biggest legislation. It won't end up being the most pages. We're not talking about a 600 or 700 page bill. And that will help them with their speed because all of the little mechanical things that need to happen - putting it through the Legislative Counsel's office, getting the bill actually written, getting copies out to people - all of that is made easier by the bill being relatively small by Congressional standards. I think it's certainly possible that they may have something to vote on tomorrow. I wouldn't bet the farm on it.


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