Financial Bailout Talks Head Into Weekend
Progress Reported As Key Democrat Sees Deal By Sunday; Republicans Not As Optimistic
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Senate Majority Leader Harry Reid, D-Nev., left, holds up draft legislation as Sen. Chris Dodd, D-Conn., looks on, Sept. 26, 2008 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)
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President Bush walks out of the Oval Office to deliver remarks on the economic rescue plan negotiations, Friday, Sept. 26, 2008 in Washington. (AP Photo/Pablo Martinez Monsivais)
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Sen. Richard Shelby, R-Ala., emerging from the bailout meeting at the White House Thursday, accounced, "That agreement is obviously no agreement." (AP Photo/Haraz N. Ghanbari)
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my bailout?""/> Dara Blumenthal of Brooklyn holds up a sign during a protest in front of Wall Street's New York Stock Exchange building on Thursday, reading, "I've Got a 4.0 GPA, $90,000 in debt, & no job. Where's my bailout?" (AP Photo/Mary Altaffer)
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Protesters with Code Pink demonstrate on Wall Street in front of a statue of George Washington and Federal Hall, Friday, Sept. 26, 2008 in New York. (AP Photo/Mark Lennihan)
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Play CBS Video Video Senator: No Bailout Deal Yet "CBS News RAW:" After an emergency meeting with President Bush at the White House, Sen. Richard Shelby (R-Ala.) said that a financial bailout rescue agreement has not yet been reached.
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Video McCain Defends Bailout Tactics Katie Couric speaks with GOP presidential candidate John McCain about his negotiations with the White House and rival Barack Obama in order to create a bill to ease the current financial crisis.
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Video Obama On Bailout Plan Democratic presidential candidate Barack Obama tells Katie Couric about his historic emergency meeting with President Bush and John McCain which focused on solving the economic crisis.
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
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Timeline Credit Crunch Feeling the squeeze? Here's a look at actions and statements from key players in Washington.
Still, the Dow Jones industrials rose 121 points for the day as investors anticipated a weekend agreement.
In days of negotiations, the administration has accepted demands from lawmakers to give Congress considerable authority to oversee the bailout and require that the government try to renegotiate the bad mortgages it acquires so more borrowers could keep their homes. Paulson also relented to requests to limit the severance packages that corporate executives can receive from firms benefiting from the government bailout.
In addition, rather than provide $700 billion up front, as Paulson initially requested, Congress would approve the funds in stages. Under one approach, $250 billion would be made available at once, with the president able to certify the need for an additional $100 billion on his own authority. The final $350 billion would become available with a second presidential certification, although this time Congress would have authority to block it.
Any compromise is also expected to require the government to obtain partial ownership of any company it invests in.
Democrats, too, signaled they were ready to jettison some of their priorities.
Frank indicated they might ultimately drop a requirement that a portion of any profits from the rescue be funneled to a fund to build housing for low-income people. That mandate, deeply unpopular with Republicans, "is not an essential," Frank said.
While Democrats control a majority of both the House and Senate, their leaders have made it clear they will not force their rank and file to vote without Republican support on a bailout advanced by an unpopular president on an unwilling public.
In an Associated Press-Knowledge Networks poll, only 30 percent of those surveyed expressed support for Bush's package. Forty-five percent were opposed, with 25 percent undecided. The survey was conducted Thursday and had a margin of error or plus or minus 3.8 percentage points. It was conducted over the Internet by Knowledge Networks, which initially contacted people using traditional telephone polling methods and followed with online interviews.
Aides to lawmakers in both parties say telephone calls from constituents are running heavily against the bailout - in some cases nearly 100-1 against, making the vote a potentially tricky one for a candidate in a competitive race.
Sen. Richard Shelby, R-Ala., and the ranking member of the Senate Banking Committee, called the Paulson proposal "badly structured," and backed it up with the opinions of over 200 economists who said the administration proposal to take on the bad debt of financial institutions is the wrong way to go.
"We need to do something to put liquidity in the market," he told Early Show anchor Maggie Rodriguez, but added, "If we adopt the Paulson plan or something close to it, we're making a big mistake."
Frank, who chairs the House Financial Services Committee, said there was a compromise agreed to by lawmakers, but that fell apart. "I signed on for a lot of jobs, [but] I didn't know I was going to be the referee for the independent Republican Civil War," Frank told Rodriguez.
Frank even suggested that the Republican infighting will only make the financial crisis worse by refusing to heed the warnings of imminent disaster by the President's top economic advisors. "Even if it hadn't been true, and I think it probably was, they make it true."
Frank said he was surprised that late yesterday the House Republicans come up with an entirely new plan, which he dubbed "an ambush plan." Frank blasted the Republicans who faced Secretary Paulson at committee hearings earlier this week and never brought their proposal to the table. "None of the Republicans now backing this new plan even mentioned it to him, because they knew he would say it wouldn't work," Frank said.
Frank conceded that the initial Paulson proposal had problems, which he and other Democrats sought to fix: "Some of the points Senator Shelby made we were also making. We wanted to amend the bill to provide some real needs to mortgage holders. I'd like to further amend the bankruptcy law to do it. They are still fighting over it. We want to curb some of the extreme authority the Secretary has. We want to put some language in there to protect the taxpayers but we did feel we had to negotiate in this framework."
Shelby said, however, that he was looking at neither President Bush nor Senator McCain for leadership in the crisis. "I'm looking at the economists that know more about the economy than Senator McCain and Senator Obama and President Bush and me and anybody else that I know of," he said. "They say we need to take some time - I don't mean a lot of time - and look at another structure or plan.
"I believe they're right."
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
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See all 691 CommentsCont.
Instead of government being able to devote the time necessary to solve the problems that they should be solving, we have come to expect it to care for us, and baby us from the crib to the grave. With ever added control and regulation that is enacted, we create a new level of bureaucracy that in the long run creates more problems than it solves.
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Every time there is a problem, whether it be at a local, state or federal level, we add a new level of bureaucracy to handle the problem instead of using agencies already in place to solve the problem, we have come to a point where we no longer know what agency and level of government actually has the controls and the powers to deal with the problem. Hence what we have is a situation where our government at all levels has become gridlocked.
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The further that this whole crisis goes, the more we come to realize that there is something that smells awful in Washington, and it isn''t the garbage. Over the past eight years, one crisis after another in America has become so common place that we have become a crisis driven society. We have been bouncing from crisis to crisis here in the United States faster than a super ball bounces on a hot concrete drive. It would take me a week to mention them all, but what has become clear is that our government, and the various departments that should be protecting us from these crisis is failing miserably. We can hardly think of any department within the federal government that has not had its share of turmoil, and scandal. What should be plainly evident to every American is that our government is failing miserably at both protecting us, and doing the job that it is there to do. These crisis, in reality are the fault of both parties, and their origins can be traced from one administration to another as far back as we want to look. Anyone that believes that our government is not failing miserably, must either be wearing blinders, or hiding in a closet.
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http://www.youtube.com/watch?v=H5tZc8oH--o&eurl=http://blogsforjohnmccain.com/
Take the time to watch and you will want to flush everyone in congress from their housing legislation to the "farm bill".
Posted by Simon9999 at 08:33 PM : Sep 26, 2008"
And they have tried - it''s called Obama/Biden.
http://www.endthefed.us/
Call it anything you want, it is still a "bailout"
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,lid 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.
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