Republican Revolt Spiked Bailout Deal

President Bush is urging Congress to pass a bailout for Wall Street, and congressional negotiators are back at the table. Republican opposition derailed a deal that appeared to be in the works on Thursday.

Copyright © 2008 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

ALEX CHADWICK, host.

From the studios of NPR West, this Day to Day, I'm Alex Chadwick.

ALEX COHEN, host.

And I'm Alex Cohen. Coming up it is on. With less than 12 hours to go the McCain campaign says Senator McCain will go to Mississippi for tonight's presidential debate.

CHADWICK: And they'll certainly have plenty to talk about. President Bush was scheduled to make a statement this morning about the financial crisis and the breakdown and negotiations over what to do. He appeared very briefly outside the White House and said this.

President GEORGE W. BUSH: The legislative process is sometimes not very pretty, but we are going to get a package passed. We will rise to the occasion. Republicans and Democrats will come together and pass a substantial rescue plan. Thank you very much.

CHADWICK: And indeed congressional negotiators are back at work. NPR's David Welna joins us from Capitol Hill. David, where are things?

DAVID WELNA: Well, Alex, Senate Majority Leader Harry Reid said today that he thinks a progress is still being made, despite all the bad blood that got spilled yesterday over a deal on the bailout plan, that seemed to come apart. We have meetings going on at the Capitol today that follow up on a meeting last night with Treasury Secretary Paulson and Fed chairman Bernanke. And the whole idea is to draft some legislative language today, so that negotiations can proceed. So the message today seems to be that a bailout plan maybe on life support, but it's still alive.

CHADWICK: So, tell me, how did all this unravel yesterday? Because I heard on a usually reliable source, which is to say this program, that the deal was done?

WELNA: Oh well, so it seemed like. I think the problem with the deal that they hit on yesterday at lunch time was that they did not have buy in from House Republicans who've been the most critical of the bailout, since many House Republicans think it's max of socialism. So when congressional leaders got to the White House with this supposed deal they struck, and where they've been summoned by President Bush and have both John McCain and Barack Obama sitting there at the table as well.

House Republican leader John Boehner who did not take part in the negotiations in the morning, sort of knocked over the chess board saying he had a whole new plan to propose, with John McCain sitting right next to him. And congressional Democrats are now blaming McCain for things falling apart and they're demanding that President Bush step in. Here's Senator Charles Schumer of New York this morning on the Senate floor.

Senator CHARLES SCHUMER (Democrat, New York): The president must get his Republican House in order by getting the House Republicans in line and asking Senator McCain respectfully to leave town, because without Republican cooperation we cannot pass this bill.

WELNA: And Senator McCain did leave the Capitol earlier this morning and went to his campaign headquarters. He's off Capitol Hill now and it seems that his staff had the perception at least that he's being here was more a liability than an asset to his campaign.

CHADWICK: But tell me, what do House Republicans want?

WELNA: Well, they're proposing that instead of a bailout that the federal government set up a kind of mortgage insurance scheme that would be similar to the Federal Deposit Insurance Corporation that protects people's savings in banks, and they figured that would save a lot of money. But Treasury Secretary Paulson has indicated he doesn't think that this would avert that kind of financial meltdown - or collapse that he fears may be coming, unless there's a big rescue effort that's backed by Congress.

CHADWICK: Isn't that basically what Fannie Mae and Freddie Mac are now?

WELNA: It is and at the same time this would be a new program, something that would be meant to instill more confidence in the market. But there's a lot of skepticism about whether that would really do the trick.

CHADWICK: OK. How does this get resolved over the weekend?

WELNA: Well, one positive development today is that the number two House Republican, Roy Blunt, is joining negotiations and there's a sign that these House Republicans are getting engaged. And Majority Leader Reid in fact says, that this whole thing could end up moving much faster than anyone thought that it could.

Senator HARRY REID (Senate Majority Leader, Nevada): We could have this done by midnight tonight, they can start drafting it all day tomorrow. We could vote on it Sunday or Monday without any question, of course we could get it done.

WELNA: Of course, the question is how many Republicans would actually vote for a final product and Democrats don't want to be the only ones who's voting for it. So, that's still remains a mystery.

CHADWICK: NPR's David Welna from Capitol Hill. Stay tuned. Thanks, David.

WELNA: You're quiet welcome, Alex.

Copyright © 2008 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Support comes from: