Wall Street Bailout: The McCain Conundrum

Congressional Democrats have discovered another possible wrinkle in their negotiations with the Bush administration on the proposed $700 billion Wall Street bailout, and that wrinkle's name is John McCain.

Senior Democrats on the Hill are worried that Sen. McCain, R-Ariz., will "demagogue" the bill, continue to voice opposition to it, use it to run against both Wall Street and Congress, as well as to distance himself from the Bush White House. Democrats worry McCain will not only vote against the bill, he will provide cover for other Republicans to do so, leaving Democrats holding the bag for the Bush administration's deeply unpopular proposal.

A Democratic congressional leadership source says that Treasury Secretary Henry Paulson went so far as to assure Democratic leaders that McCain "won't be a problem" -- in other words, that McCain will vote for the proposal.

This afternoon, Senate Majority Leader Harry Reid, D-Nev., said, "I was told, yesterday afternoon, by the secretary of Treasury, that McCain was in favor of the program.  We heard, all through the night, that he wasn't sure.  And we don't know, this morning, where he stands on the issue."*

McCain spokesman Tucker Bounds says McCain has not made a decision one way or another.

"John McCain has been very clear that he has certain reservations about the details of the agreement that has been released at last notice," Bounds said. "There is no final agreement to review, but when there is, John McCain will weigh in responsibly and appropriately."

McCain has expressed concerns about the original proposal's lack of sufficient oversight. He has said whatever plan emerges should eliminate golden parachutes for executives, and protect homes, family savings, and student loans. McCain also expressed the view that executives of any company that receives government aid, should not be compensated more than the highest-paid government employee, which is the president, who makes $400,000 a year.

- jpt

* This post has been updated with the quote from Reid.

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