Rep. Barney Frank (D-Mass.) told reporters Monday evening that he "overstated" agreement with the White House on negotiations on the bailout. "I thought we did" have agreement, he said, referring to Democratic efforts to include foreclosure relief and mortgage modification efforts in the package.
Democrats have reached agreement, he said, on the implementation of a congressional oversight board to monitor the bailout mechanics; the Treasury Department would not have to wait for board to be set up to begin the bailout -- a concession to the White House.
He said that Democrats are still pushing for taxpayers to be given an equity stake in companies that they bail out and that he's been unable, so far, to reach an agreement on limiting golden parachutes for executives of companies bailed out. He said persuading some in the GOP to limit executive pay has been as difficult as telling "a rabbi to eat bacon."
Frank said that negotiations with his Senate counterparts, meanwhile, were going well and that they had reached "very good agreement."
Overall, he said he expected the three-party negotiations -- between the House, Senate and White House -- to be completed by the end of the week.
Frank also weighed in on the implications of the bill on the market, both short term and long term. Asked if the markets had tanked today because of disagreement over the bailout, Frank said, "I don't know. And neither does the market."
Frank argued that the market moves in a highly rational manner in the long term but in the short term it's "manic depressive." He added, though, that the package had become necessary -- if for no other reason -- because the treasury secretary and federal reserve chairman came out and said that it was necessary. Once those two say something is necessary to soothe the market, Frank reasoned, the action becomes required by the market. "I suggested this a few weeks ago and the world didn't end," he noted.
A reporter asked if he saw similarities between the administration's push for the bailout and it's drive to go to war in Iraq. "I think Hank Paulson and Ben Bernanke understand market psychology better than Donald Rumsfeld understands anything," he said.