Couric & Co.
September 29, 2008 7:22 PM

Sticks, Carrots And A Failed Bailout

Jill Jackson is a Capitol Hill field producer for CBS News.
Early this morning, members of the House were starting to think they might actually pass an economic rescue package hammered out in late night negotiations over the weekend. But democrats and republicans were not going to take any vote for granted – especially when the bill would commit up to $700 billion of taxpayer money. Plus, it's an election year and members are getting hundreds of calls and e-mails from constituents urging their congressmen to vote "no."

Both democratic and republican leadership committed their support to the final package. But everyone knew the vote would be tight. And that's why there are whips in the House – members of leadership who count the votes and use carrots and sticks to get members to vote a certain way. Sometimes it's arm-twisting. And sometimes they just a promise of a favor down the line. Sometimes it's an appeal to party unity.

After three hours of debate on the bailout, it was time for a 15-minute vote. Members were keenly aware that voting one way could cause more trouble in the economy, perhaps even a deep recession. Vote the other way and it's a Wall Street bailout. Republican Congressman Chip Pickering of Texas called it a "legacy vote."

As the clock started to tick down, republican minority whip Roy Blunt made the rounds on the republican side of the chamber. He would casually walk around and sit with a member or two, whisper something in their ear and then get back up. His deputy whip Eric Cantor did the same.

On the democrats' side of the chamber, Majority Whip Steny Hoyer and conference chair Rahm Emanuel ran around trying to manage their party's vote since they did not want democrats to vote overwhelmingly for the package. Speaker Nancy Pelosi's made clear that this bailout, or economic recovery package, had to pass with both democrats and republicans.

The vote moved slowly. Pelosi and Minority Leader John Boehner had one quick exchange in the front of the chamber. The Speaker looked like she wanted folks to vote faster. Boehner just shrugged.

And then, the vote froze at 207 yeas to 226 nays. The clock had run out, but democrats kept the vote open hoping enough republicans would change their votes. The tension spiked when it was clear that votes would change, but only by two votes over to the nay category.

Members stared grimly up at the tallies. Democrats, along with Pelosi and Rep. Barney Frank, crowded around the leadership and committee tables and stayed pretty stationary. Hoyer crossed over to Blunt on the republican side to get a read on if there was any hope left.

When it was clear the whips could whip no more. The vote was closed. Final vote: 205 yeas to 228 nays.
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by gsegreto-2009 September 29, 2008 8:39 PM PDT
The failure is in the court of the executive branch. Paulson knew of this for many months and likely for several years. He failed to take steps to avoid this. Then he compounded the crisis by announcing a made up deadline. We can easily place the blame for this on the shoulders of Paulson and Bernake.
This bill is necessary only if we refuse to consider alternatives. Scrap the Paulson plan and start over. Since the concern is to get loans flowing to American businesses, find a way to fund regional and local banks all across the country and cut out those who perpetrated this debacle. The market will hand them their verdict.
We need options for those in default of the mortgage. I further suggest that every adjustable rate loan in the country be given the option to renegotiate into a fixed rate without qualification so long as their payments are on time. If homeowners are making what ever sacrifice they need to in order to keep their home then we need to allow them to continue to do that.
As for Paulson and Bernake, they need to be stripped of their positions. There is no way that they were ignorant of this situation more than 12 months ago. I suspect they knew it was coming for several years. But they did nothing. They allowed it to brew to a crisis and then used it as an attempt to grab still more power. Replace Paulson and begin the process of minimizing the power of the Federal Reserve.
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by dakotasun2 September 29, 2008 8:43 PM PDT
I was very frustrated with your TV report on the bailout. It''s obvious that CBS news wants billions to be wasted. Most Americans do not want the bailout. Government actually represented it''s people, how rare. If the government really wants to help the economy all they have to do is give the 700 billion to the people in an economic American people bailout. That would help our economy more than helping save a few poorly run companies. Most of the stock rising and falling is based on hype. CBS has made the economy worse by the way it reported the bailout story. It''s a simple issue. Most American''s don''t want a bailout of a few huge companies.


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by roncos2 September 29, 2008 8:44 PM PDT
I am sick and tired of Katie Couric''s heavily partisan "news" coverage. She can''t resist slamming George Bush, the Republican Party or Mc Cain / Palin. She''s not a news person, she''s an entertainer and just like all "entertainers" is biased. I officially "quit" watching her "news" show today.
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by realidad-2009 September 29, 2008 9:35 PM PDT
In a market economy capitalists justify their profits by the risk of losses that they take. Gamblers cannot keep their profits and pass their losses to the taxpayers. They have to take responsibility for their bad decisions.

Much of the toxic (garbage) debts were based on fraudulent practices %u2013 opaque financial instruments unrelated to real assets (but which generated huge commissions). Bailing out swindlers only encourages more swindling.

The US Treasury will purchase worthless paper, the private banks will retain any assets of value. We buy the lemons, they drive the Cadillacs.

The chance of the Treasury recovering any value from their purchases of bad debt is near zero. The taxpayers will be stuck with paper with no buyers.

The long-term effect of a bailout will be to double the public debt and undercut funding for Social Security, Medicare, Medicaid, education and public health programs while increasing the tax burden of future generations.

The dollar will devalue as the government debt will decrease its attractiveness overseas, increasing the cost of imports and resulting in an inflationary spiral which will further undermine working people%u2019s living standards.
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by drirvin September 29, 2008 9:38 PM PDT
The House Republicans who killed this must think that the American public collectively fell off of the last turnip truck into town.

The killing of this version of the bill was designed to do just what it did - drive the market down.

Their institutional supporters will now buy into the market, and as soon as those buy orders are filled, "hard work and devotion to the public good" will suddenly produce a consensus that looks very much like what they killed; the market will recover; and those institutional supporters will have done very well, indeed. If others accomplished the same thing, it would be "conspiracy to manipulate the market", but since congress members were the actors, it will just be politics as usual.
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by donnanjohn September 29, 2008 9:44 PM PDT
We saw the interview Katie did with Obama and then we saw the interview she did with Palin. Katie I''m sure Obama was really challenged with the questions you asked him(LOL)...It was So obvious you were thrilled to get to interview him and you were gushing all over yourself. But when you interviewed Palin you could see the animosity toward her all over your face. And the questions you asked her were the type of questions you should have asked Obama also, not the foo foo questions he was asked! If you want to be a News Anchor start acting like one...Stop being so biased.
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by skeezix06 September 29, 2008 10:10 PM PDT
Off topic reply. Injecting Obama into this more or less makes him irrelevant.

On topic: Even if I wanted to pay for someone else''s lack of judgment we cannot afford this, especially on top of tax cuts for the wealthy, never ending war in Iraq, Afghanistan, saber rattling or worse at Iran, threats aimed at North Korea, revival of star wars, military arms and race in space against China, and all the other boondoggles Bush is inventing even now.
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by lstone65 September 29, 2008 10:21 PM PDT
Katie- your comments on tonight''s newscast about the failed bailout today were so BLATANTLY obvious that you blame the Republicans for today''s failed decision. I thought you were supposed to be an UNBIASED reporter and not pushing your pro-Democrat spin down the public''s throat. Your question to Boehner was downright rude and disrespectful. You should turn that question back on yourself- what is your problem? The Republicans are listening to the millions of angry American citizens, including myself, that don''t want the first thing that is quickly, and mind you I say sneakly being attempted to be passed by us before we have a chance to review what we are signing off on. If any party is being deceitful, it is your obvious party of choice the Democrats, that are trying to sneek in a lot of unnecessary garbage, all in the ruse of trying to save our failing economy.
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by drjack0040 September 29, 2008 10:33 PM PDT
I am very concerned with the direction the country is going and especially worried about the trend in this election cycle. The economic condition is getting worse and failure of both parties is pushing us to the brink of collapse. Raising taxes will surly push us over the edge. Here is a sample headlines if Obama Wins,

BREAKING NEWS
Americans read of Obama''s victory while standing in soup line across the country while the depression expands beyond our boarders. Unemployment reachs 20%.
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by margaret289 September 29, 2008 11:14 PM PDT
Check your facts. Pickering is from Mississippi.
Reply to this comment
by ratherbias September 30, 2008 1:22 AM PDT
Is there a single person at CBS who isn''t pushing Obama and Panning Palin and McCain?

Just one. There obviously isn''t on on the TV or blogs. Maybe a janitor?

Pelosi can''t even get her own party to vote for the bailout and they have the MAJORITY. If she had kept her mouth shut it might have passed. Maybe Katie should have played that up.

Why Republicans lower themselves to speaking to Couric and Crew is beyond me.
Reply to this comment
by citizenproud September 30, 2008 2:53 AM PDT
Wall Street Bailout Suggestion: This morning a viewer presented a new idea to help the economy......Our government wants to give 700 billion dollars to wall street and have tax payers pay the price. Why don''t they give every tax paying American a one million dollar stimulous check out of the 700 billion? This would only be 300 million dollars. Then require each tax paying American to pay off debts ie..mortgages, credit cards, etc. In addition, they would have money to spend (which would stimulate the economy) and money to save & invest which would help the banks and wall street. The viewer who presented this was a genious and I don''t know who he is. I would vote for him for President!
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by vmroad089 September 30, 2008 11:01 AM PDT
I would hate to interfere with the markets while they are adjusting to the terrible policies Bush has been enacting. No Republican will admit that, but as I see it, it is true.

What needs to be done, is responsible oversight of the bailout with absolutely NO HIGH CEO payoffs at end of year. Can anyone think of a reason why the American taxpayer would want a CEO to walk away with a huge package after what they have done? This is the issue. ABSOLUTELY NO CEO BUYOUTS, PAYOFFS OR GOLDEN PARACHUTES! LET THE BANKS FIGURE THIS OUT AS FAR AS THEY CAN! LET THE MARKETS ADJUST. NO WALL STREET BAILOUT!
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by hhfarm6 September 30, 2008 11:16 AM PDT
Pelosi couldn''t get 95 of her own party to vote for the bill. Barney Frank couldn''t get 12 members of his own banking committee to vote for the bill. Blame the Republicans? I don''t think so. Just another example of the failed Democratic leadership. Bush is a failure but these clowns in congress are worse. On the plus side, a majority of the Republicans and 95 Democrats actually listened to the people and did their job of REPRESENTING the people by voting this very bad legislation down. I hope it is dead for good. By the way, yesterday was not anywhere near the worst day on Wallstreet. 777 points was only a 7% drop. Black Monday in 1987 was a 22% drop and we survived that. Also, when is CBS going to report the criminal conflict of interest Sec. Paulson has in this. He is a former CEO of Goldman Sacs. Goldman Sacs has 20 billion invested in AIG. They were in the bailout meeting for AIG. And we are suppose to trust this guy with 700 billion to save "us"??? I think not!!!
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by klinsoco September 30, 2008 11:42 AM PDT
Katie,

Neither the 41,000 lobbyists who know our House of Representatives, our Congresspeople, and the President so very well NOR the House, Congress, or our President represent us taxpayers in any way shape or form.

I, like the majority of Americans, are disgusted with all of them. I believe that we should have NO bailout for any of these failures/CRIMINALS on Wall Street. Yes, "my money/Main Street''s money" is on Wall Street, and yes, so is my parent''s money as they are at retirement age and dealing with issues of their own (i.e. health) at home - I understand that all VERY clearly.

I also understand that Wall Street is NOTHING what it was in 1933 nor is it ANYTHING that it was just 15 years ago.

One more thought - Why doesn''t the House and Congress and the President give an estimated 200 million taxpayers who are over the age of 18 years EACH $3,500.00 (or more, if a "bail-out" is all it takes!) for their individual debt, if those "leaders" of ours truly care about our, the Americans, financial well-being or truly want to spend OUR money to get us out of this mess. Here''s an answer "why", Katie...because those Representatives, those Congress people, that President of ours have all been - other than those who voted AGAINST this package - the puppets of the exact big companies, big lobbyists, and big criminals who need this bailout plan to save their own rear ends....those people care NOTHING about your or me, Katie.

Thanks for all you do, Katie. STAY VOCAL!!!
Reply to this comment
by dennaberri September 30, 2008 1:01 PM PDT
Ensuring "Main Street" is protected
Here''s my bailout proposal...
The Federal government should take the tax payers money to pay off the tax payers high risk mortgages.
The money - current market value of home - would still go to the financial institution where the mortgage is held, which will help them out of their situations.
The Fed. Government could then put a Fed "lien" on the property - again based on current market value. Tax payers could pay off the "lien" every year as an addition to their property taxes. Instead of making 2 payments a year, we could make 4, two of which would go the Fed. Gov.
When the property is sold, the buyer could have the choice of taking over "lien" or taking out a conventional mortgage which would pay off the Fed. %u201Clien%u201D. The seller would only be entitled to the equity.
This bailout would put cash in the hands of the consumer, thereby sparking the economy and hopefully lifting the hiring freeze. CEO%u2019s will not get large bonuses from the checks the government writes and the government will still eventually %u201Cget most, if not all%u201D of the money back.
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by hjedtyj September 30, 2008 1:05 PM PDT
Congress Should Recuse Itself
Increase Decrease

September 30, 2008 (LPAC)-- All Congressmen whose personal investments would be affected by the bailout bill should recuse themselves from voting on the plan, in order to avoid a conflict of interest. That alone should be enough to kill the plan.
Reply to this comment
by dennaberri September 30, 2008 1:09 PM PDT
Ensuring "Main Street" is protected
Here''s my bailout proposal...
The Federal government should take the tax payers money to pay off the tax payers high risk mortgages.
The money - current market value of home - would still go to the financial institution where the mortgage is held, which will help them out of their situations.
The Fed. Government could then put a Fed "lien" on the property - again based on current market value. Tax payers could pay off the "lien" every year as an addition to their property taxes. Instead of making 2 payments a year, we could make 4, two of which would go the Fed. Gov.
When the property is sold, the buyer could have the choice of taking over "lien" or taking out a conventional mortgage which would pay off the Fed. %u201Clien%u201D. The seller would only be entitled to the equity.
This bailout would put cash in the hands of the consumer, thereby sparking the economy and hopefully lifting the hiring freeze. CEO%u2019s will not get large bonuses from the checks the government writes and the government will still eventually %u201Cget most, if not all%u201D of the money back.
Reply to this comment
by dennaberri September 30, 2008 1:09 PM PDT
Ensuring "Main Street" is protected
Here''s my bailout proposal...
The Federal government should take the tax payers money to pay off the tax payers high risk mortgages.
The money - current market value of home - would still go to the financial institution where the mortgage is held, which will help them out of their situations.
The Fed. Government could then put a Fed "lien" on the property - again based on current market value. Tax payers could pay off the "lien" every year as an addition to their property taxes. Instead of making 2 payments a year, we could make 4, two of which would go the Fed. Gov.
When the property is sold, the buyer could have the choice of taking over "lien" or taking out a conventional mortgage which would pay off the Fed. %u201Clien%u201D. The seller would only be entitled to the equity.
This bailout would put cash in the hands of the consumer, thereby sparking the economy and hopefully lifting the hiring freeze. CEO%u2019s will not get large bonuses from the checks the government writes and the government will still eventually %u201Cget most, if not all%u201D of the money back.
Reply to this comment
by dennaberri September 30, 2008 1:19 PM PDT
Ensuring "Main Street" is protected
Here''s my bailout proposal...
The Federal government should take the tax payers money to pay off the tax payers high risk mortgages.
The money - current market value of home - would still go to the financial institution where the mortgage is held, which will help them out of their situations.
The Fed. Government could then put a Fed "lien" on the property - again based on current market value. Tax payers could pay off the "lien" every year as an addition to their property taxes. Instead of making 2 payments a year, we could make 4, two of which would go the Fed. Gov.
When the property is sold, the buyer could have the choice of taking over "lien" or taking out a conventional mortgage which would pay off the Fed. %u201Clien%u201D. The seller would only be entitled to the equity.
This bailout would put cash in the hands of the consumer, thereby sparking the economy and hopefully lifting the hiring freeze. CEO%u2019s will not get large bonuses from the checks the government writes and the government will still eventually %u201Cget most, if not all%u201D of the money back.
Reply to this comment
by khhammerle September 30, 2008 1:25 PM PDT
The so-called leaders of both parties are not in touch with the real people out there. That is the people who did not make or take buydown or subprime loans, their house reflected its real value as a home when purchased and are still able to pay their bills because they did not overextend themselves. Any thing that transfers money from these people to the gamblers and unqualified borrowers is morally and ethicaly wrong approaching the level of felony fraud even if imposed by the government. They made their bed and should be made to lie in it. No ammount of the Chicken Little chant the sky is falling, the sky is falling by self-serving politicians and media talking heads can change the truth. The groups advocating a goverment bailout gambled and don''t want to accept their losses.
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by khhammerle September 30, 2008 1:30 PM PDT
Where is Pelosi''s resignation. In most other countries She would have submitted it this morning as the first order of business. Of course acceptance of personal responsibility for failure in not in her or the liberals of either parties list of proper behavior.
Reply to this comment
by dennaberri September 30, 2008 1:46 PM PDT
Ensuring "Main Street" is protected
Here''s my bailout proposal...
The Federal government should take the tax payers money to pay off the tax payers high risk mortgages.
The money - current market value of home - would still go to the financial institution where the mortgage is held, which will help them out of their situations.
The Fed. Government could then put a Fed "lien" on the property - again based on current market value. Tax payers could pay off the "lien" every year as an addition to their property taxes. Instead of making 2 payments a year, we could make 4, two of which would go the Fed. Gov.
When the property is sold, the buyer could have the choice of taking over "lien" or taking out a conventional mortgage which would pay off the Fed. %u201Clien%u201D. The seller would only be entitled to the equity.
This bailout would put cash in the hands of the consumer, thereby sparking the economy and hopefully lifting the hiring freeze. CEO%u2019s will not get large bonuses from the checks the government writes and the government will still eventually %u201Cget most, if not all%u201D of the money back.
Reply to this comment
by dennaberri September 30, 2008 2:37 PM PDT
Ensuring "Main Street" is protected
Here''s my bailout proposal...
The Federal government should take the tax payers money to pay off the tax payers high risk mortgages.
The money - current market value of home - would still go to the financial institution where the mortgage is held, which will help them out of their situations.
The Fed. Government could then put a Fed "lien" on the property - again based on current market value. Tax payers could pay off the "lien" every year as an addition to their property taxes. Instead of making 2 payments a year, we could make 4, two of which would go the Fed. Gov.
When the property is sold, the buyer could have the choice of taking over "lien" or taking out a conventional mortgage which would pay off the Fed. %u201Clien%u201D. The seller would only be entitled to the equity.
This bailout would put cash in the hands of the consumer, thereby sparking the economy and hopefully lifting the hiring freeze. CEO%u2019s will not get large bonuses from the checks the government writes and the government will still eventually %u201Cget most, if not all%u201D of the money back.
Reply to this comment
by dennaberri September 30, 2008 3:47 PM PDT
OMG - I am so sorry my post was added so many times. This is a glitch and I only meant for it to be posted once.
I apologize!
Reply to this comment
by hieroweb September 30, 2008 9:09 PM PDT
So we should be okay with a government that comes out and tells us this bill needs to be passed right NOW without any checks and balances in place? Does anyone have any idea why a government would come out and make such an unbelievable request? Why are they trying to shove this down the throat of every American? Could it be that Paulson wants to take care of his own base? Paulson who is an ex Chairman and Chief Executive Officer of Goldman Sachs with ties to AIG and other recently taken over companies. Is the man pulling the strings? It seems that the hurry to get this bill approved is more about not finding out certain details about Paulson%u2019s past and his affiliations to big business then it is about helping our country. This administration has never been up front with the American people so why would they start now. Americans should be in an UPROAR over what is going on right now! If this isn''t proof that Bush stands for BIG BUSINESS then what the hell does?
Reply to this comment
by stormyhailey October 2, 2008 3:06 PM PDT
No to bail out! The gov taught us in school, USA is a capitalist country, it is all about the mighty dollar you make it any way you can. The Fannie/Freddie need to lower interest rates n stop doing the floating interest rates to set people up for failure. Recall as many foreclosures as possible n refinance the houses the honest right way, for once. Products n services should be valued for what they really are, instead of valued for greed. The gov should stop lending money out to other countries as if we got it to give. My mom always said to take care of home first. That should be the first law for USA to live by. The following should occur: CEO, etc. should invest their paycheck n 35 mil bonus that they receive every quarter back into their co. Their personal items, jets, condos, homes, etc. should be put up as collateral. Families that are in foreclosure homes should be evaluated at the correct cost-n taxes should be lowered, put what they are behind at end of note, n start them afresh on a 4.9 fixed rate for the next 15 years. Stop overpricing these matchbox homes that only cost 20 to 44 thousand to build. When I applied for a credit card, these same banks deny others n me because of credit score. I AM SORRY STOCK MARKET - I AS A TAX PAYING CITIZEN DON''T CONSIDER YOU A GOOD INVESTMENT FOR MY TAX MONEY - APPLICATION DENIED - SEE US TAX PAYERS WHEN YOU GET YOUR CREDIT n ETHICS SCORE UP. THERE IS NO APPEAL PROCESS.
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