No Deal As Bailout Talks Break Down

Republican Revolt Against Proposed $700 Billion Taxpayer-Funded Lifeline Stalls Negotiations

(CBS/AP)  A Republican revolt stalled urgent efforts to lash together a national economic rescue plan Thursday, a chaotic turnaround on a day that had seemed headed for a success that President Bush, both political parties and their presidential candidates could celebrate at an extraordinary White House meeting.

Weary congressional negotiators worked into the night, joined by Treasury Secretary Henry Paulson in an effort to revive or rework the $700 billion proposal that President Bush said must be quickly approved by Congress to stave off potentially "a long and deep recession."

They gave up after 10 p.m. EDT, more than an hour after the lone House Republican involved, Rep. Spencer Bachus of Alabama, left the room. Democrats blamed the House Republicans for the apparent stalemate. Those conservatives have complained that the plan would be too costly for taxpayers and would be an unacceptable federal intrusion into private business.

Talks were to resume Friday morning on the effort to bail out failing financial institutions and restart the flow of credit that has begun to starve the national economy.

After six days of intensive talks on the unprecedented package proposed by the Bush administration, with Wall Street tottering and presidential politics intruding six weeks before the election, there was more confusion than clarity.

The day's earlier apparent breakthrough, announced with fanfare at midday, was followed by a White House summit bringing together President Bush, presidential contenders John McCain and Barack Obama, and top congressional leaders. But that meeting, aimed at showing unity in resolving a national financial crisis, broke up with conflicts in plain view.

Inside the session, House Republican leader John Boehner expressed misgivings about the emerging plan and McCain would not commit to supporting it, said people from both parties who were briefed on the exchange. They spoke on condition of anonymity because the session was private.

The earlier agreement by key members of Congress from both parties - but not top leaders - would have given the Bush administration just a fraction of the money it wanted up front, subjecting half the $700 billion total to a congressional veto.

The proposed bill, largely crafted by Democrats with only modest Republican input, would also likely have included caps on the pay of executives of firms that take federal assistance, mortgage relief for families facing foreclosure, equity stakes for taxpayers and an oversight board to hold the Treasury secretary accountable, reports CBS News correspondent Bob Orr.

But conservatives were still in revolt, balking at the astonishing price tag of the proposal and the hand of government that it would place on private markets.

Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, emerged from the White House meeting to say the announced agreement "is obviously no agreement."

One group of House GOP lawmakers circulated an alternative that would put much less focus on a government takeover of failing institutions' sour assets. This proposal would have the government provide insurance to companies that agree to hold frozen assets, rather than have the U.S. purchase the assets.

Rep Eric Cantor, R-Va., said the idea would be to remove the burden of the bailout from taxpayers and place it, over time, on Wall Street instead. The price tag of the administration's plan to bail out tottering financial institutions - and the federal intrusion into private business matters - have been major sticking points for many Republican lawmakers.

There is wide agreement the U.S. economy is in peril, with financial institutions going under or near the edge and recession looming along with the resulting layoffs and increased home foreclosures.

There had been hopes for broad agreement, too, on a prescription by now, with a confident White House announcement by the president, McCain, Obama and congressional leaders.

But the best Senate Republican leader Mitch McConnell would say afterward was, "It's clear that more progress is needed and we must continue to work together quickly to protect our economy."

Democrat Obama and Republican McCain, who have both sought to distance themselves from the unpopular Bush, sat down with the president at the White House for an hourlong afternoon session that was striking in this brutally partisan season - but also, according to one participant, "a full-throated discussion." By also including Congress' Democratic and Republican leaders, the meeting gathered nearly all Washington's political power structure at one long table in a small West Wing room.

"All of us around the table ... know we've got to get something done as quickly as possible," Bush told reporters, brought in for only the start of the meeting. Obama and McCain were at distant ends of the oval table, not even in each other's sight lines. Bush, playing host in the middle, was flanked by Congress' two Democratic leaders, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.

McCain and Obama later said they both still expected an agreement could be reached.

Under the accord announced hours earlier among key lawmakers, the Treasury secretary would get $250 billion immediately and could have an additional $100 billion if he certified it was needed, an approach designed to give lawmakers a stronger hand in controlling the unprecedented rescue. The government would take equity in companies helped by the bailout and put rules in place to limit excessive compensation of their executives, according to a draft of the outline. .

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Read text of the bailout principles agreed upon by the Senate Banking Committee

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As negotiations continued Thursday night, Michele Davis, the chief Treasury spokeswoman said, "There are still open issues to be resolved, and we are committed to resolving them."

The plan's centerpiece still is for the government to buy the toxic, mortgage-based assets of shaky financial institutions in a bid to keep them from going under and setting off a cascade of ruinous events, including wiped-out retirement savings, rising home foreclosures, closed businesses, and lost jobs.

Layered over the White House meeting was a complicated web of potential political benefits and consequences for both Obama and McCain.

Former President Bill Clinton told CBS' Early Show that he'd bank on Obama over McCain to lead the country back to economic prosperity.

"I think that he (Obama) personally, and our party generally, tend to produce better economic results for ordinary people. And I think that, while Sen. McCain - I like him and he's a friend of mine, and I trust him in many ways - but the Democratic economic philosophy and Obama's specific proposals, I think, will produce better results for ordinary Americans," he said.

McCain hoped voters would believe that he rose above politics to wade into successful, nitty-gritty dealmaking at a time of urgent crisis, but he risked being seen instead as either overly impulsive or politically craven, or both. Obama saw a chance to appear presidential and fit for duty, but was also caught off guard strategically by McCain's surprising gamble in saying he was suspending his campaigning and asking to delay Friday night's debate to focus on the crisis.

[nicholasma]

NO! No bailout, I never got the chance to own a 500,000.00 house and bull *** my way to that kind of loan!

Please tell me... 700 b in bad loans this years means what ??? in 4 years their still bad loans !! let then eat there loans. Dot tell me to eat cake!

[praiseallah1]

Don''t Let Bush bailout Wall Street with $700 Billion in Tax Payer money!

Email your States Senators, Congressperson, House Representatives and DEMAND that they vote NO on any Bailout because this money will just be used to pay off Wall Streets debt that they created themselves through their own greed by marketing bundled bad mortgage loans!

We have also sent sorning emails to George Bush, Nancy Pelosi, Harry Reid, Chris Dodd, Barney Frank, McCain, Obama saying we will vote them OUT of Office.

Watch this video which show which lawmakers are responsible for the sub-prime mortgage mess at http://wallstreetmarketnews.blogspot.com/2008/09/who-is-to-blame-for-wall-streets-700.html

[riddelup]

Bring this to a vote so we will know who not to vote for. Here is a clue we will not vote again for anyone who vote for a bailout.

[djelramees]

Obama knows, the Rep''s have set our economy on feet of clay and a micrometer political manuver into these financial wows will shatter the purses of the upper class. This will reshift the targeted fracturing of the middle class. Yes, let''s keep ignoring the poor and shooting for the stars...we''ve gotten ourselves into financial global mess. Obama and his camp made an accurate assessment: Missing an opportunity to debate the issues won''t fix the problem.

Onthewall

[drprescrip]

The Democommunists and Redumplicans are at it again. The super ultra rich still control all processes of government and it makes no difference who is elected. The super ultra rich will still be in control of the slave masses. Slavery is where most people are situated. When most all the slaves lose their positions what will the super ultra rich do with them? Without the need for the slaves the super ultra rich can start their elimination policies...

[grvmstrj]

mymtldme1

I like it! But those with $$$$ and in charge will view it as an attempt to undermine the country''s financial system-go figure!

[tibu987]

I oppose the bailout in any form.
Let the chips fall where they may.
A recession or depression will allow the country to regain its position with time and in better shape.
Put a freeze on mortgage payments until it gets sorted out.
Many Wall Street and mortgage companies made hundreds of millions of dollars in their usurious positions and took obscene salaries and bonuses, some in the hundreds of millions of dollars.
I would not now like to see them rewarded for their avarice and mismanagement.

[ioweign]

Today''s Candidate Schedule

Fri Sep 26, 2008

Where will the candidates be today?

Barack Obama: Oxford, Mississippi - Presidential Debate

Joe Biden: No public events scheduled

[Michelle Obama and Jill Biden have no public events scheduled]

John McCain: To Be Determined: Details may emerge during one of the many media interviews McCain is doing during his "suspended" campaign.

Sarah Palin: Protecting America from Russian invasion.

[aaabee-2009]

top 5% will own 95% of the wealth.
Posted by frankie2fing at 10:44 AM : Sep 26, 2008

The top 1% own 50% of it now, and they are hoarding it. There is no trickle down. The kind of luxury they buy for themselves usually doesn''t come from US workers. It comes from luxury dealers in Europe, hence the money goes to Europe.

Mansions, yachts, bank accounts, off-shore investments, European sports cars, vacation paradices, Paris clothes, jewelry...all garnering the millions that the rich spend, much of it outside the US. Inside the US, we are becoming a service industry, serving the rich, like the $273,000 McCain pays for household help.

Every time we buy celebrity endorsed products, brand-names, or from national chain stores/restaurants, that takes the money out of local circulation and sends it to the Corporate Headquarters in some other state (or nation).

[frankie2fing]

Sorry. :) I know which side you are on. It feels odd to be advocating for Republicans, but I don''''t want to give up on that party just because some corrupted people represent it at the moment.

Respectfully.

Posted by AaaBee

Unfortunately, it is not just the moment. The current redumblican party chants the mantra ''WWRD''
''What Would Reagan Do.'' They have deified this senile man, one who shrunk government by growing it, tripled the national debt and single handedly destroyed labor protection in this country. Of couse he screwed up a lot more, but I am limited to 1500 characters. Plus, my typing is not that good.

[tomc1232]

PLEASE!!!
When was the last time what a politician said during an election match what he/she did once in washington?!? They are few and rare. Most of the time, the get elected by saying they are against gay marriage, because *** will destroy the family unit and turn your kids gay.
Posted by frankie2fing

When this latest mess (Bailout Proposal)was announced, I emailed all my elected officials and expressed my thoughts. Apparently, others did as well. Somebody listened. There''s not an elected official that doesn''t know the vast majority of taxpayers think this bailout plan stinks. It''s failure will not lead to "Financial Destruction of the Masses".

[frankie2fing]

How curious that posters on a network news website, with their VAST access to the latest financial information, experience in government, and their EXTENSIVE knowledge of the stock market and banking are convinced that THEY have the perfect solution to the economic crisis. Guess Congress should get in touch with those here who just KNOW that they have the answer to the crisis.....

Posted by raflin01

I have seen not one post of a solution to this Bush made problem. I have seen alot of SARCASM, but I guess that is wasted on redumplicans.

[aaabee-2009]

You misunderstand my sarcasm. Posted by frankie2fing at 10:33 AM : Sep 26, 2008

Sorry. :) I know which side you are on. It feels odd to be advocating for Republicans, but I don''t want to give up on that party just because some corrupted people represent it at the moment.

Respectfully.

[frankie2fing]

Sometimes on a bad night, I want McCain elected so that the American people can see once and for all that Republicans cannot make America a Utopia.
Posted by AaaBee

Great idea, problem is, 4 years of McSame we will be all slaves, the top 5% will own 95% of the wealth.

[aaabee-2009]

and point and say, ''''See what those Democrats did!''''
This noe-con group is just about the lowest life form on Earth. Posted by frankie2fing at 10:26 AM : Sep 26, 2008

There aren''t many folks left that Bush HASN''T sold out.

McCain will have to deal with all this mess if he gets elected. Bush is leaving the mess for whomever gets elected. I have never thought the Republican party as bad, its the Bush Administration that is deadly corrupt.

Sometimes on a bad night, I want McCain elected so that the American people can see once and for all that Republicans cannot make America a Utopia. Republicans see a necessary half of the issues of a society: the free market, development, the traditions of family and God. Liberals see the other half of necessary issues: social justice and environment and future planning.

Our founders knew...it is in the compromise of the two parties that makes this country prosper and thrive for everyone. One party is never 100% wrong nor is the other party 100% right. America is built on the two-party 50/50 principle and it still works.

[mymtldme1]

If we''re going to do an $85 billion bailout, let''s bail out
every adult U S Citizen 18+!

As for AIG - liquidate it. Sell off its parts.

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it
up.

Here''s my rationale. We deserve it and AIG doesn''t.

Sure it''s a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85
Billion "We Deserve It Dividend" more than I do the geniuses at AIG or
in Washington DC.

And remember, The Birk plan only really costs $59.5 Billion
because $25.5 Billion is returned instantly in taxes to Uncle Sam.

And theoretically with the boost to the economy most of these
people would be more productive and pay enough in additional taxes over
a 5 to 10 year period to repay the $59.5 Billion.

Ahhh...I feel so much better getting that off my chest!

[frankie2fing]

Not because it the right thing to do, but because they are running for re-election.
Posted by frankie2fing at 10:17 AM : Sep 26, 2008

Uh, isn''''t that why they''''re "elected" to "represent" their constituents.

Posted by TomC1232

PLEASE!!!
When was the last time what a politician said during an election match what he/she did once in washington?!? They are few and rare. Most of the time, the get elected by saying they are against gay marriage, because *** will destroy the family unit and turn your kids gay.

[mymtldme1]

A husband and wife has $595,000.00.

This even takes care of the AIG employees that lose their job.

What would you do with $297,500.00 to $595,000.00 in your
family?

Pay off your mortgage - housing crisis solved.

If you had insurance from AIG, now you have the money to replace
it with a more stable company.

Repay college loans - what a great boost to new grads

Put away money for college - it''ll be there

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs

Invest in the market - capital drives growth

Pay for your parent''s medical insurance - health care improves

Enable Deadbeat Dads to come clean - or else

Remember this is for every adult U S Citizen 18+ including the
folks who lost their jobs at Lehman Brothers and every other company
that is cutting back. And of course, for those serving in our Armed
Forces.

If we''re going to re-distribute wealth let''s really do
it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic
incentive that is being proposed by one of our candidates for President.

[mymtldme1]

I''m against the $85,000,000,000.00 bailout of AIG.

Instead, I''m in favor of giving $85,000,000,000 to America in a
We Deserve It Dividend.

To make the math simple, let''s assume there are 200,000,000
bonafide U.S. Citizens 18+.

Our population is about 301,000,000 /- counting every man,
woman and child. So 200,000,000 might be a fair stab at adults 18 and
up..

So divide 200 million adults 18 into $85 billon that equals
$425,000.00.

My plan is to give $425,000 to every person 18 as a "We Deserve
It Dividend".

Of course, it would NOT be tax free.

So let''s assume a tax rate of 30%.

Every individual 18 has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18 has $297,500.00 in their
pocket.

[slim1h2o]

SORRY!! Allow me to correct my typo. Some industries should never be deregulated--banks and pharm come to mind. Thank you for seeing that--too bad you didn''''t read the rest in context and realize I must have left out the prefix. :)


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Posted by stoplying08 at 10:09 AM : Sep 26, 2008

I re-read your post, it still sounds the same as my 1st thought. That you wanted de-regulation of the banking, Big Pharma, and the health care system.

I guess you should have re-worded your whole post if meant something entirely different;)