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Stephanopoulos: What's Next? Congress Mulls Four Options

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September 29, 2008 7:05 PM

ABC News' George Stephanopoulos reports: There are meetings going on right now on Capitol Hill to try to figure out what to do about the $700 billion Wall Street bailout bill that failed to pass the House today.

Congressional sources tell ABC News that what they're talking about right now are three or four basic baskets of options:

# 1 -- Muscle Bailout Bill Through House: Some leaders suggest those House Republicans on the fence will be swayed by seeing what the markets do tomorrow, which could be more bad news. The Dow Jones Industrial Average dropped over 700 points today as the administration's bailout bill failed in Congress  This option would see House leaders try again to muscle through the votes they need to get the $700 billion bailout bill passed.

#2 -- Pass Bailout in Senate First: Some Senate and House leaders have been talking about letting the Senate go first and pass the bailout package, ABC News has learned. There appears to be broader support in the Senate for the bailout package. This option would see the Senate vote first which would increase the pressure on the House to pass the Bush administration's bailout bill.

#3 -- Make Small Tweaks to the Bill: Congressional leaders wonder if perhaps there are a couple of small tweaks they can make to the package that would bring along the 12 votes they lost the vote by. Option A, sources say, could be adding a line that some economists have said is absolutely necessary for the FDIC to guarantee all deposits in transaction accounts, not just up to $100,000.  That would deal with the credit crunch and it would be quite popular, some on Capitol Hill argue. Option B would be eliminating the mark-to-market rule that many Republicans and conservatives complain about, which ensures financial decision-makers must show their losses in real time.

#4 -- Get More Democrats On Board: Finally, one other unlikely option talked about on Capitol Hill is to try to pass the bill almost entirely with the Democratic majority in the House. That would require adding a major stimulus package favored by Democrats, infrastructure spending, unemployment insurance spending, and heating and food stamp assistance for low-income Americans.

All of that is being discussed right now. We're not likely to hear members have landed on any single proposal until at least tomorrow.

Nothing will be done for at least a day and a half as Congress is in recess because of the Jewish New Year. The Senate won't be back until Wednesday afternoon and the House of Representatives is adjourned until Thursday.

However the bigger sell to Congress to do something may be the consequences of not acting. More bad news through the end of the week that might do it.

Bailout Politics

Everyone knew it was going to be a close vote, but we've never seen anything like this.

There was a Republican president, a Democratic Speaker of the House,  a Democratic majority leader,  the entire Republican and Democratic leadership from both sides of Congress and both presidential candidates Barack Obama and John McCain arguing for this package.

But a peek at the upcoming congressional races of the people who voted against this package provides some insight.

We calculate there are about 31 competitive House races divided between Democratic and Republican House members, and 24 of the 31 members in competitive districts voted against this package.

No one wants to vote for this. Even those who were arguing for it on the House floor today said 'we know this package is painful, we know it's hard to argue that we should be spending up to $700 billion in a way that might end up benefiting the banks.' It's a hard pill to swallow despite the arguments about what's its going to mean for Main Street.

However the fundamental problem for Republicans is that in an election year when the incumbent is not on the ballot, but you've had eight straight years of Republicans in the White House, any bad economic news is likely to fall harder at this point on Republicans.

Obama called on Congress to get the bill passed and McCain blamed Obama and House Speaker Nancy Pelosi for injecting what he called "unnecessary partisanship" into the equation.

Many Republicans are complaining about a floor speech Pelosi gave prior to the vote, where she laid so much of the blame on eight years of Republican economics and President George Bush's policies.

The Democrats are arguing it's unbelievable that hurt feelings would prompt the Republicans to switch their vote and perhaps cause an economic disaster.

Neither presidential candidate has given any indication that they are going to suspend their campaign and run back to Washington, DC to deal with this. However it's likely well see both Obama and McCain in Washington in person when that vote finally comes.

 

September 29, 2008 in McCain, John, Obama, Barack, Vote 2008: Democrats, Vote 2008: Republicans, Washington | Permalink | User Comments (458)

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By the end of the day the corrupt media will surely blame John Mc Cain for the fact 96 democratic house members voted NO for this bill.

My question is this. Why bother even have elections if the media is hell bent on rigging the outcome anyway ?

Posted by: infoseeking | Sep 29, 2008 7:13:26 PM

i oppose a bailout at the middle class' expense. we have heard doom and gloom scenarios from this administration since iraq. and i don't buy em anymore. the market will correct itself and those who made poor choices will be penalized, period. that is free enterprise.

Posted by: ron | Sep 29, 2008 7:14:09 PM

Here is the deal... are their seats SAFE come election time?

Among 38 incumbent congressmen in races rated as "toss-up" or "lean" by Swing State Project, just 8 voted for the bailout as opposed to 30 against

Posted by: Libratine | Sep 29, 2008 7:17:57 PM

um, 2/3 of Dems voted for it, 2/3 of reps voted against it, McCain is the leader of their party, and was already claiming credit for having brought the thing together. Country first indeed.

Posted by: Danny | Sep 29, 2008 7:20:07 PM

Republicans need to do their share and get 12 more House members.

Posted by: Sandra | Sep 29, 2008 7:23:49 PM

.
AS much as this bailout package makes me ill, I see it as a necessary evil. We have no choice. Otherwise, I see a depression coming our way....I'm stocking up.

Posted by: jen | Sep 29, 2008 7:24:26 PM

the media is not rigging anything. Let's calm down and remember that a Republican, Bush, has been sitting in the WH for 8 years! Re-elected, I might add, after starting a widely unpopular war! So, if the media has a true liberal bias, I'm sure they could have ensured a Kerry victory. This has nothing to do with the media. It has to do with the sheer incompetence of the GOP, Bush and now McCain. Nobody put a gun to his head and asked him to declare that he was going to troop to DC. Nobody asked him to march back to Ole Miss for the debate. He could have skipped it if he wanted to. Nobody forced him to pick Palin. If she can't answer the Alaska/Russia question for the 3rd consecutive time, that's the fault of the "liberal" media?! C'mon. Sometimes we need to get our head out of the sand and get a clearer look at what's happening in the world.

Posted by: Truth17 | Sep 29, 2008 7:24:33 PM

McCain and his campaign are a team of the most prolific liars in modern political history... and it appears they are spinning out of control!!!!!!!!!!!!

Posted by: Libratine | Sep 29, 2008 7:25:04 PM

Why is there no television coverage of the protests in the streets?

The banksters and the complicit politicians are losing their grip because the people don't believe their lies anymore.

Let the uber rich bail themselves out. The rest of us will need to take care of each other because it is very clear that nobody else will.

Posted by: Pamela Cosmo | Sep 29, 2008 7:26:35 PM

... A sweet ‘bailout’ alternative. A plan all Americans would be proud of.

Assumptions:
Financial bust is NOT caused by Democrats and/or Republicans – but is systemic and has been evolving for decades.
Today’s poor financial conditions are symptoms of a failed system (only) and has fueled a never ending and escalating cycle of consumerism and indebtedness among a majority of Americans. Not good.
Fixing a broken system is the only ‘real’ solution while ‘bailing’ out or creating more debt will simply broaden the pain in the short and long term – not to mention devalue the already declining dollar.

Based on these assumptions, the mere suggestion of what follows will stun the planet and awake Americans in ways no one has ever experienced. Invest in the American people. A conjured up political solution in Congress will never work.

7 Point Rescue, Security & Freedom Proposal
1. Emergency and immediate troop redeployment to the homeland - bare minimum skeletal staff to remain in sensitive zones
2. Ensure all Veteran benefits are in place and fully operational to support troops and families
3. Red alert spending freeze all federal non-essentials
4. Invest in new grid system to deliver wind and solar energy from the heartland to all points east and west to be fully installed in 6 years
5. Invest in new transportation systems to include natural gas, hybrid mass transit systems and automobiles with a goal to phase out ALL combustion engines in 8 years.
6. Abolish the Federal Reserve - Federal government to assume responsibility to maintain and create currency. Consider value based currency such as the GOLD standard.
7. Abolish the IRS and federal income taxes to allow the ingenuity of Americans to meet ALL said objectives.

Thanks for listening.

Posted by: dave | Sep 29, 2008 7:27:59 PM

pelosi, Obama and Dean have spent years
throwing Propaganda around to "Blame Bush" Blame the Government" for everything, even as they moved forward on destorying the nation.

If Pelosi and the Democratic/chicago machine want to take over the government and business and industry they will have to work at it, and not have it handed to them.

Posted by: seah | Sep 29, 2008 7:30:27 PM

Reality will hit and they will pass something.

Fact of the matter is they will not want to face the public when they are out of work and in 4 weeks a lot will be out of work if there isn't a BIll.

They will be able to say I voted against it, but the economy trumped my concern, etc.

Posted by: Thinking | Sep 29, 2008 7:31:13 PM

I believe Paulson was right, the consequences of not passing a bill and passing it quickly is worse by far than just passing the bill. No one really wants to do it, but it is clear that not only the U.S. market, but markets overseas are responding to this financial problem. Speaker of the House Nancy Pelosi should learn to keep her mouth shut. There was a basic agreement to put aside partisanship and do what was in the interests of the country. She apparently did not get that memo. Just could not wait to point the finger at the Republicans. From my recollection, the Democrats are the ones that instructed Fannie Mae to put 50% of its mortages in the low-income to low-middle income group, a group as a whole who could not otherwise qualify for a new home with NOTHING down. There are other underlying causes, so there is plenty of blame to go around. What really stands out in voters minds right now is the extremely low approval rating of the Congress, now controlled by the Democrats. That approval rating is lower than that by far than President Bush. Congress, in the House vote did nothing to disprove or improve the approval rating. It is well-deserved, for Republicans AND Democrats. Please get off your gluteus maximi and do the republic's business, please.

Posted by: curtis41 | Sep 29, 2008 7:31:23 PM

McCain and his campaign are a team of the most prolific liars in modern political history... and it appears they are spinning out of control!!!!!!!!!!!!

Posted by: Libratine

where have youe been?..is this your first campaign?

Posted by: LordHelpLiberals | Sep 29, 2008 7:31:29 PM

i'm confused..earlier in the week liberals were complaining about Bush's plan for 700 billion and bailing them out...using tax payers money , etc...now they are blaming REPS for not passing it..what the H E L L do you people really want?..do you know?

Posted by: LordHelpLiberals | Sep 29, 2008 7:33:52 PM

Don't any of you use your brain? President Bush inherited a mess left over from Bill Clinton, who was a colossal disgrace to our presidency. His administration reaped the benefits of President Ronald Reagan's efforts. As for the war, are you idiots not remembering the attack on September 11th?!? It was unprovoked and the retaliation was UNANIMOUSLY voted YES!!!And don't forget--President Bush has been fighting a liberal Democratic Congress at every turn.

As for the McCain/Palin ticket - God Bless them both! They are our only hope. When America becomes so gullible that they believe the rehearsed lines from Obama and whats-his-name we are in a sad sad state.

Posted by: Carol | Sep 29, 2008 7:35:43 PM

Carol ..well said..

Posted by: LordHelpLiberals | Sep 29, 2008 7:39:08 PM

Add a provision that eliminates golden parachutes for the execs of failed and failing companies (not just tax them) and the bailout will pass.

Posted by: In_Indiana | Sep 29, 2008 7:40:35 PM

@ infoseeking

I think the Republicans wrote the book on rigging the outcome of elections. You all must be running scared, all the old tactics are comming out. Blame the media, if the media was liberal, Bush and Co. would be in jail

Posted by: fearforthefuture | Sep 29, 2008 7:47:16 PM

@ infoseeking

I think the Republicans wrote the book on rigging the outcome of elections. You all must be running scared, all the old tactics are comming out. Blame the media, if the media was liberal, Bush and Co. would be in jail

Posted by: fearforthefuture | Sep 29, 2008 7:47:18 PM

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