Gossip Corner: Bailout Vote

When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away.

Congress is poised to vote on the biggest government intervention in the financial markets since the Great Depression, but it’s unlikely that any of the three senators vying for the White House will be there — even though all three have talked of little else for over a week.

President Bush joined key supporters of a Wall Street bailout package today, prodding lawmakers to approve the plan, hours ahead of a difficult House vote expected later in the day.

“While it creates a gimmicky $700 billion installment plan, attempts to improve transparency, and has new provisions cloaked as taxpayer protections, its net effect is still a huge bailout of the financial sector that will snuff out the free market system,” said Representative Connie Mack, Republican of Florida.

Indeed, the Senate bailout vote could fall on Friday, creating a huge logistical headache for both candidates even to make sure they’re onstage when the curtain goes up at Ole Miss.

The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.

Congress is poised to vote on the biggest government intervention in the financial markets since the Great Depression, but it’s unlikely that any of the three senators vying for the White House will be there – even though all three have talked of little else for over a week.

Indeed, the Senate bailout vote could fall on Friday itself, creating a huge logistical headache for both candidates even to make sure they’re on stage when the curtain goes up at Ole Miss.

Late Sunday afternoon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid held a news conference with Senate Banking Committee chairman Chris Dodd to announce that Congress would vote quickly on the legislation.

One, Representative Jim Marshall, a Georgia Democrat facing a re-election contest, told his colleagues in their private meeting that he would vote for the measure to bolster the economy.

Sen. John McCain has no plans to return to Washington this week, even though on Monday he expressed discomfort with Treasury Secretary Henry Paulson ’s trillion-dollar bailout plan and has offered his own rescue proposal.

On Wednesday, McCain contradicted Senate Majority Leader Harry Reid, who said the Republican presidential hopeful would support the bailout.

Arizona Sen. John McCain has no plans to return to Washington this week, even though on Monday he expressed discomfort with Treasury Secretary Henry Paulson’s trillion-dollar bailout plan and has offered his own rescue proposal.

With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of the world and the markets on Congress, said Republican Rep. Paul Ryan of Wisconsin.

Neither Obama nor McCain returned to Capitol Hill for an important economic vote on July 26, when the Senate passed a massive housing bill to shore up mortgage markets and prevent hundreds of thousands of foreclosures.

Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.

Obama, meanwhile, said “the power to spend $700 billion of taxpayers’ money cannot be left up to the discretion of one man, no matter who he is or which party he is from.

One of the more contentious issues was how to limit the pay of executives whose firms seek government aid, a top priority for Democrats and even some Republican lawmakers.

Treasury Secretary Henry Paulson, center, House Speaker Nancy Pelosi and Harry Reid, the Senate majority leader, announcing in Washington a tentative deal on a $700 billion rescue of the financial sector.

In effect, the government would guarantee some bad debts without having to fork over taxpayer money immediately.

Senior Obama strategist Robert Gibbs said the campaign would also be monitoring the process as it unfolds, but as of Monday, the campaign would not commit to Obama’s making the trip back to Washington — even though the bailout proposal has taken a central role in Democratic presidential nominee’s stump speeches.

Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home.

Besides purchasing troubled assets such as mortgages, the current agreement would require the government to offer insurance at a cost to the Wall Street companies on some home loans instead of buying them.

It lets the government buy sour assets mostly mortgage-backed securities from struggling financial institutions in a bid to clear out clogged avenues of credit for businesses and individuals alike.

Senior Obama strategist Robert Gibbs said the campaign would be monitoring the process as it unfolds this week, but as of Monday, the campaign would not commit to Obama making the trip back to Washington – even though the bailout proposal has taken a central role in Obama’s stump speeches.

Obama did, however, return to the Senate on July 10 to vote in support of stalled Medicare legislation, which had failed on an earlier attempt to clear the 60-vote filibuster hurdle.

“Inaction would paralyze our economy,” Reid said.

The architects of the plan said they realized they were calling on Congress to cast a tough vote since lawmakers might not get credit for averting a financial crisis since some constituents will not believe one was looming.

Clearly, the looming first presidential debate is the major factor in encouraging the top-ticket candidates to stay put.

Earlier the Democratic Chairman of the House Financial Services Committee, Barney Frank, said the House would “definitely” begin debate Monday on the rescue package.