Financial Bailout Talks Head Into Weekend

Progress Reported As Key Democrat Sees Deal By Sunday; Republicans Not As Optimistic

(CBS/AP)  There were fresh signs of urgency at both the White House and the Capitol, one day after the rancorous White House session and the collapse of Washington Mutual, the largest failure in U.S. banking history. The Seattle-based institution had invested heavily in the now-moribund mortgage market.

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."

[azindep64]

Early stock markets today showing downward pressures. Republican House members are the holdout on the credit relief valve plan and I do hope reason steps in and they can find compromise for the mess their party has gotten the country into. McCain''s stunt is a distraction to the campaign and the economy, simply reckless

[brianbwb-2009]

We are still 180 degrees apart on the whys, but I am comforted to know that even neocons have their limits to greed and corruption, especially when they are not the beneficiaries.

Whatever their motivation, the bottom line is that the bailout is folly. If they aould stall, or derail it, I''ll take it...

[creeper00]

Get grip, CBS! Republicans are not to blame for the collapse of this bailout...the American people are. They are livid at the prospect of a bunch of fat cats being bailed out with our tax dollars (and make no mistake--this will cost us) while we struggle to fill our gas tanks.

Read the comments on stories like this. John Q. Public has had it. He is not behind this giveaway and he will hold any legislator who votes for it accountable.

[martin9p2]

You really need to read the analysis at electoral-vote.com today. In part:

If McCain tucks his tail between his legs and flies to Mississippi to debate Obama at Ole Miss, he will hardly look like a man of action who flew to Washington, banged heads together, and got a bill. On the other hand, if he stays in Washington to work on the bill (meaning fighting Dodd, Shelby, and the House Republicans) Obama will ask the moderator, Jim Lehrer, to moderate a town hall meeting with questions from the audience. That would be an unmitigated disaster for McCain.

[martin9p2]

GW should be proud of his legacy .. as the anti-Christ.

[tbuckl]

Thomsa Jefferson knew something about bankers and the banking system. His opposition to the Bank of the United States was fierce: "I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." Boy o Boy did he know the truth, I certianly feel swindled on large scale, pass me another fake American dollar please.

[sleepyric]

and just what did i miss?? explain yourself.

[babooph]

I thought only one thing could be done& it had to be asap ?

[laurainlex]

Republicans are NOT for golden parachutes - get your facts straight. The Republicans don''t want any of the profit going to ACORN, which is what the democrats are proposing. If you don''t know about ACORN - just google it. You will find how dishonest and completely inept this group is - and, by the way, where Obama worked while a community organizer.

Also, for those complaining about spending 10 billion in 7 years for keeping our country safe - I don''t hear one complaint that the ANNUAL economic burden of tobacco use is more than $75 billion in medical expenditures and another $80 billion in indirect costs.

We''ve lost 5000 lives in Iraq in 7 years - but we lose more than 15,000 lives ANNUAL in gang warfare here in our own country. I don''t hear about that either.

Get your priorities straight. No wonder the Obama machine is definitely a bridge to no where but in the taxpayers'' pockets!

[observantx]

I believe the message from the people is starting to sink in. That message is:

There should be no blank check given to Wall Street. If you give a blank check to Wall Street we WILL vote you out.

That''s what started this "ambush plan". Now both sides are waiting to see who will pick up the hot potato and take the blame and the consequences.

[yeswecan09]

The entire article can be boiled down to this paragraph:

**The meeting revealed that Mr. Bush''s proposal to combat the worst financial crisis in decades had been suddenly sidetracked by fellow Republicans, saying they want a free market solution, not a government bailout.**

I understand the need for alternate solutions; however, we are running out of time.

[mccaino8nc]

Posted by tuckerndfw at 09:37 AM

Right on, as usual, Tucker.

Posted by Centerfall93
--------------------------------------------------------------------------------

Obama''s plan sit on his A** do nothing vote present and when the ***** hits the fan say I never really supported that any way it was Bush''s plan. Or if it succedes say see what happens when dems take action everything works out just fine.

Do libs do realize the Dems are trying to give to 20% of this Bailout to Acorn? You do know that orginazation was found guilty of voter fraud right.

[j_flood]

Get private equity funds - not taxpayer funds - funny it didn''t take Warren Buffet long to step up with $5bn - I''m sure others are standing back thinking the bailout is a done deal ------ offer up the equity to private parties and see what happens, perhaps then the taxpayer could make up the shortfall only with equity in return.

And - help the distressed homeowners and small merchants --- tax payer money is okay there!

[FHMullane]

I believe this needs to be turned over to financial experts and NOT politicians. Let them come up with non partisan ideas. We do need to do something... What is the question. How soon... probably pretty soon.

Meanwhile, for those of you who think McCain can lead this country.... take a look at his performance here... and now he wants to suspend his campaign, put off the debates... THIS IS A PERFECT EXAMPLE OF WHAT THE WHITEHOUSE WILL LOOK LIKE IF HE IS ELECTED. Don''t do it. Vote for Obama. He can be forced more to the middle. He has the energy and the brain power. Sadly, McCain has had it and picking Palin for a VP makes it all the more scary and not possible. This is America.. we don''t have to settle for this dog and pony show they are putting on. Obama and Biden have run a good honorable campaign that shows the ability to multitask and handle situations. Obama spends time thinking and does not do knee jerk reactions... we cannot afford that. Put aside your personal issues... vote for Obama...

[kenammons]

let us all hope and pray that house conservatives hold tough and stop the evil bush administration from spending so much more money little george the terrible has done enough damage to this great nation. thank god in 116 days he is gone

[omega40]

This is the inevitable outcome of sending your well paying manufacturing base overseas and replacing it with a low paying service sector economy that attempts to maintain it''s standard of living through credit. For those of you that live frugally and have no personal debt, you still own part of the national debt and our record trade deficits. There is nobody that would like to see the millionaires on wall street fail more than me, but the reality is the rich will continue to live comfortably, they will just have considerably less. The rest of us will be unemployed and standing in soup lines if the economy is allowed to fail.

[mccaino8nc]

That''''s pretty much it. I don''''t agree with the bailout, Republicans want a blank check with no oversight and the democrats wouldn''''t give it to them, so the republicans refused to compromise. So the republicans may have killed the deal, but it''''s the democrats, as usual, looking out for the common man.
Posted by Centerfall93

--------------------------------------------------------------------------------

Your reading that pretty well except what the Repubs are proposing is not a bailout of a 700 billion dollar gift to these people. They want them to barrow the money from the government to save their teails and then pay it back at a rate of 2%. How much money would the government make on 2% of 700 billion.

You libs are so gun ho for a larger socialized government you don''t care what it cost.

[petro49l]

George W. Bush has brain damage from hard liquor and street drugs. His Doctor should perform a modified frontal lobotomy to relieve symptoms of paranoid schizophrenia. Bush needs psychiatric medication and bed rest.

[joker1944-2009]

Go Republicans! Stop the bailout!

[mccaino8nc]

Your only purpose here is to spread misinformation, innuendo and slander. Everyone knows this. Not sure why you continue, but feel free. It''''s not like anyone takes you seriously, you know.

Posted by Centerfall93
--------------------------------------------------------------------------------

I''m sorry I dsagree with you but tell me what has Obama done in this situation that shows any leadership charactoristics. "Call me if you need me I''ll make my self available". Is this what he is going to do as president sit on a beach in florida and say you all handle it and if you can''t, call me I''ll see if I can work you into my schedule.

[gop_will_win]

John McCain saved taxpayers 700 billion today. He flew to Washington to save us all from the greedy liberals who were going to soak us to save their elitist wall street buddies. We should all be grateful to him for his gallant efforts.

[jb20084]

The fact is this problem is one the Republicans have allowed with all of the deregulation and looking out for the rich. Now they want to throw McCain and Bush under the bus. Welcome to the club!

[joker1944-2009]

You libs are so gun ho for a larger socialized government you don''t care what it cost.

Posted by McCainO8NC at 09:49 AM : Sep 26, 2008

Not this lib! I oppose the bailout totally and without any reserve whatsoever - in fact I''ve written and called my representative several times to tell them to STOP THE BAILOUT!

[gop_will_win]

Haha liberals! Your foolish plan to raid us taxpayers one last time before you got booted out of office has failed! Now we can elect a majority republican congress and President McCain and we will make America great again.

[gop_will_win]

The DOW is only down 113 now. Put away your party hats libs, its not Doomsday yet.

[mccaino8nc]

George W. Bush has brain damage from hard liquor and street drugs. His Doctor should perform a modified frontal lobotomy to relieve symptoms of paranoid schizophrenia. Bush needs psychiatric medication and bed rest.
Posted by Petro49L

--------------------------------------------------------------------------------

Saddest part is I agree with on on this Bush is brain damaged if he thinks this a good plan. The problem is the dems want to blindly follow him off the cliff. That is the crazy part is that it is the repubs saying this deal stinks not the dems. I know the world is coming to an end when the dems agree with Bush.

[omega40]

REALITY CHECK:

NOT EVEN THE PRESIDENT OF THE US CAN FORCE CONGRESS TO DO ANYTHING.

It''''s utterly amazing how stupid American voters really are.

Whatever happened to 5th grade civics? (or whatever they call it these days?)

Posted by tuckerndfw at


Amazing huh, I have to point out almost daily to Rowdy that Obama and McCain don''t make tax policy, congress does. She still doesn''t get it.

[mccaino8nc]

Whatever happened to 5th grade civics? (or whatever they call it these days?)

Posted by tuckerndfw
--------------------------------------------------------------------------------

In your theory lets boot all the sentators out of office and quite paying them the 170,000 a year we pay them if 2 votes don''t matter then non of their votes matter.

[mccaino8nc]

Not this lib! I oppose the bailout totally and without any reserve whatsoever - in fact I''''ve written and called my representative several times to tell them to STOP THE BAILOUT!

Posted by joker1944
--------------------------------------------------------------------------------

So why are you so upset with Mccain for going to Washington and putting a stop to this. It is irellavent weather he did he for polical reasons or cause he truly believes, he did it. It something Obama did not do he would rather see us go 700 trillion in dept then take a hard stand and maybe an unpopular stand.

[omega40]

Remember the good old days when the economic threat was mere recession? The Federal Reserve would encourage the economy with low interest rates until the economy overheated. Prices would rise, and unions would strike for higher benefits. Then the Fed would put on the brakes by raising interest rates. Money supply growth would fall. Inventories would grow, and layoffs would result. When the economy cooled down, the cycle would start over.

The nice thing about 20th century recessions was that the jobs returned when the Federal Reserve lowered interest rates and consumer demand increased. In the 21st century, the jobs that have been moved offshore do not come back. More than three million U.S. manufacturing jobs have been lost while Bush was in the White House. Those jobs represent consumer income and career opportunities that America will never see again.

In the 21st century the US economy has produced net new jobs only in low paid domestic services, such as waitresses, bartenders, hospital orderlies, and retail clerks. The kind of jobs that provided ladders of upward mobility into the middle class are being exported abroad or filled by foreigners brought in on work visas. Today when you purchase an American name brand, you are supporting economic growth and consumer incomes in China and Indonesia, not in Detroit and Cincinnati.

(continued)

[mccaino8nc]

Last time I looked, the "liberals" you are referring to are McSame and Bush.

Posted by Centerfall93
--------------------------------------------------------------------------------


Do you not read it was Mccain who put a stop to it, and Pi**ed every dem on the hill off, including the almighty one.

[omega40]

In the 20th century, economic growth resulted from improved technologies, new investment, and increases in labor productivity, which raised consumers%u2019 incomes and purchasing power. In contrast, in the 21st century, economic growth has resulted from debt expansion.

Most Americans have experienced little, if any, income growth in the 21st century. Instead, consumers have kept the economy going by maxing out their credit cards and refinancing their mortgages in order to consume the equity in their homes.

The income gains of the 21st century have gone to corporate chief executives, shareholders of offshoring corporations, and financial corporations.

By replacing $20 an hour U.S. labor with $1 an hour Chinese labor, the profits of U.S. offshoring corporations have boomed, thus driving up share prices and %u201Cperformance%u201D bonuses for corporate CEOs. With Bush/ Cheney, the Republicans have resurrected their policy of favoring the rich over the poor. John McCain captured today%u2019s high income class with his quip that you are middle class if you have an annual income less than $5 million.

Financial companies have made enormous profits by securitizing income flows from unknown risks and selling asset backed securities to pension funds and investors at home and abroad.

[joker1944-2009]

So why are you so upset with Mccain for going to Washington and putting a stop to this.

Posted by McCainO8NC at 10:01 AM : Sep 26, 2008

Who said I was? I''m THRILLED in fact. McCain looks like a fool (as supposedly he was going there to help) AND he either is a no show at the debate tonight, or he comes with the American public knowing he actually helped sink the legislation he said this nation needed!

Too funny. McCain''s big gamble looks like a massive bust right now.

[omega40]

Posted by omega40 at 09:57 AM : Sep 26, 2008

Rowdy is a GOP shill & troll. She (he) claimed to support Hillary due to her "liberal" policies (which are nearly identical to Obama''''s), but when HRC lost, she (he) suddenly became a hard right wing zealot.

Either he is a GOP shill, or he is insane.

Posted by tuckerndfw

LOL, my money is on insane!!!!

[gmcnally2]

Go Republicans! Settle for nothing less than the alternative plan that forces Wall St. to bear the brunt of this bailout. Let the rich pay for the excesses of the rich. A bailout is CLEARLY NOT what Americans want. You know it. Now represent us!

[mtngurl8]

Republicans accuse democrats of being elitists which is ironic when the administration has supported the country club set for the last 30 yrs at the expense of working Americans. Now the duh-ya crew wants to blame this mess on democrats-HOW WHEN DEREGULATION got us into this mess. As a liberal I say let the republicans screw up the bailout. If you will notice Paulson is a conservative, his plan was approved by a conservative and will benefit the greedy CEOs if democrats do not stand up and say no more. But on the other hand my husbands company has already started closing stores due to this mess-so all around thanks to all these years of REAGONOMICS we are screwed either way- God Bless America and Democrats lets take back our country.

[mccaino8nc]

When did they become "liberals"?

Posted by tuckerndfw
--------------------------------------------------------------------------------

You are a true idiot the dems are the ones who have signed on the dotted line for Bush''s odiotic plan and it was Mccain who put the breaks on and said wait a minute we don''t need to spend a trillion dollars with out some protection for tax payers. Boy it is grand how libs can duck responsibility in a way I hope Obama does win the election because then the Dems won''t have anyone to blame but their selves for idiotic plans like this one.

[gop_will_win]

Either he is a GOP shill, or he is insane.

Posted by tuckerndfw
==========================
So narrowminded.

[schwarzzennegger]

The photo of all these "leaders"at the table sure looks like The Last Supper to me....

[joker1944-2009]

Right now, I hate to say it, it appears the only ones acting responsible right now are the conservative Republicans who are in revolt!

I hope the bailout is DOA. There''s no proof that it will really help anything or prevent a recession. Anytime the Bush administration demands money or threatens doomsday scenarios it''s almost certain they''re lying or at best are looking out for their own best interests, not the nation''s.

[mccaino8nc]

Who said I was? I''''m THRILLED in fact. McCain looks like a fool (as supposedly he was going there to help) AND he either is a no show at the debate tonight, or he comes with the American public knowing he actually helped sink the legislation he said this nation needed!

Too funny. McCain''''s big gamble looks like a massive bust right now.


Posted by joker1944
--------------------------------------------------------------------------------

Yeah I really hope he does show up it''ll be fun to see Obama explain how he supported giving away 7 trillion dollars to the likes of Acorn. I am sure he is already rehearsing his statement of well I never really had a chance to read the entire bill because I was to busy spending 3 days preparing for the debates that are so important now even though I was to much of a coward to do 1 a week for a total of 10 which was requested by Mccain at the beginning of the general election.

[rushlimpdrug]

Waaaaaa !!!!!!!
Hoooooo !!!!!!!

[mtngurl8]

The years of Republican control have crippled our Democracy. The underlying reason is the NEOCONS who began with Prescott Bush wanting to push Facism onto Americans to fill their pockets and ensure a dynasty of greed, corruption and ignorance. Thanks to all the conservatives afraid of gay marriage and all those oh so important issues our great country is now mocked by the likes of Iran. I am so depressed by the stupidity of voters. We are damned if we do or damned if we don''t

[schwarzzennegger]

What''s the big rush ??? This urgency from Prez Bush sounds awfully familiar to me... like the urgency to invade Iraq and weapons of mass destruction. Why not take the time to get the input of true experts in the field, instead of the ideas of imbeciles Bush and McCain ??? ( At least Obama has a brain !! )

[omega40]

It''''s frightening to see just how ignorant people are about the stakes in this matter and the effects of not bailing out the lenders.

When gas hits $6 a gallon, you have no job, no unemployment, no food stamps,and no one will give you a credit card but will up your interest rate to 20% on the ones you still owe on remebr that you wanted the economy to go in the toilet!

Posted by Mcliar

I''m no fan of the bailout either but yes, we are a credit based economy that is quickly losing the confidence of those that hold our biggest debt (China and SA). We could easily be looking at our own version of the Wiemar Republic if things go the wrong way.

[mccaino8nc]

Bzzt! Wrong! Try reality for a better result. Thank you, drive through.

Posted by Centerfall93
--------------------------------------------------------------------------------

Well I guess since I am a drive by you can educate me is it not the dems pushing this 7 trilllion bailout and not even wanting to look at the option of letting these company barrow the money from the treasury so the american people are garranteed a return on their investment.

And don''t tell me Dems put protections in there because if you call protections alocating 20% to companies like Acorn then with protections like that this bill is sunk.

[chris32324]

W s last chance to fill his pals pockets once again,,,might not work this time.

[mtngurl8]

John McCain and Sarah Palin do have the IQ between them to even figure out how this mess started and republicans will elect them just to spite themselves. Bush has succeeded in one of his efforts he has so hampered education and free thinking with his lame NCLB that now half our nation can no longer think for themselves.

[tonysp2]

We should not be in a rush to turn over $700 billion dollars of the money we paid in taxes to Bush, Cheney, Paulson, and Bernanke. We should set a start date to the distribution of the $700 billion of January 31, 2009. No decisions on distribution should be made until then.

[stn_sage]

Saddest part is I agree with on on this Bush is brain damaged if he thinks this a good plan. The problem is the dems want to blindly follow him off the cliff. That is the crazy part is that it is the repubs saying this deal stinks not the dems. I know the world is coming to an end when the dems agree with Bush.

Posted by McCainO8NC at 09:55 AM : Sep 26, 2008
------------------

Bush loves it! Because: 1.it bails out his Wall St. buddies, 2.it will get some Dems kicked out of office, 3.it will harm the lives of most Americans, and 4.he gets to pi$$ everyone off!

No, the Dems are foolishly making a deal, designed they hope, NOT to take ALL of us over---just the poor.

No. Mbrs from both parties say, ''it stinks''! But, a small group of southern Reps know that their voters will probably replace them so they''re in no hurry to come up with a bill!

No. They don''t agree with Bush. They''re just stupidly placating him!