In a close vote, 205 – 228, the “bailout” bill was defeated. Bush, Paulson, Pelosi and everyone else who was interviewed after the vote, still say we are in a crisis. I guess the natural question is: Now What?
First, let’s take a quick look at how the bill was defeated.
The defeat began with Nancy Pelosi giving one of the more partisan speeches I can remember hearing given by a Speaker in a situation where the Speaker knew the vote was close and really wanted the bill to pass. Rather than fight for a common purpose, Nancy took her 2 minutes to point fingers at every Republican ever elected. You really need to see it to believe just how insultingly partisan her comments were:
After experiencing Pelosi’s petulance and seeing that the Dem’s were only able to get 60% of their caucus to support the bill, I’m inclined to agree with Soren Dayton over at RedState.com. I too believe that Pelosi intended this bill to fail so that she could continue to scream Buuuuuuuuush for at least another week of the election season. Pelosi believes, incorrectly, that doing nothing will provide her Presidential candidate, plausible deniability and the same ability to cry Buuuuuuush/McCaaaaaaain up until the next debate.
Perhaps the first question is: Do we need to do anything? I think the answer to that, sadly, is yes. Here are just three stories of commercial financing ending or having terms attached that are a dramatic change:
– Catepillar (via the Chicago Tribune)
– State of Tennessee (via The Tennessean)
– McDonald’s (via the Chicago Tribune)
OK, something needs to be done, what?
In my perfect world, I would like to see the original Paulson bill come back. Strip out the pension support the mortgage term renegotiation and a few other ornaments from TARP and I would support it. That said, I don’t think that’s going to happen.
If Pelosi is at all interested in getting a bill done, an assumption we have to work with or the remainder of the discussion is moot, I’d be willing to bet that right now she has all kinds of piglets lined up waiting to be inserted in any bill she may bring back. As has been pointed out before, she has enough Democrat members that she doesn’t need any Republicans to pass a bill.
In order for Nancy to get her caucus to fully support the bill she would likely need to be even more draconian on the pay issues. She would also likely add the provision that sends earnings from the asset sales to ACORN and La Raza back in. Finally, I would expect to see some provision that would have direct help for homeowners who are facing foreclosure. While this may be Nancy’s druthers, I don’t see that a bill with those provisions would get through the Senate unless Wall-street had a dramatic, sustained meltdown. If a true panic sets in, all bets are off.
Another possibility is that nothing is done. I don’t think that’s going to happen because Nancy is not going to let the meltdown be hung around her neck even if she really believes it’s Buuuuuuush’s fault. No, she’s likely to do something.
The final option (assuming the Republicans can’t just rewrite the bill from scratch, and I don’t think there’s any possiblity of that) is to rebring essentially the same bill to the floor. There are two problems with this approach: First, there’s no chance that Pelosi would risk another shoot down unless she was absolutely sure the votes were there. Second, if the bill is the same, how do you get Republicans to change their vote when the public appears to be behind them and elections are getting even closer?
Here’s my plan:
First, we need to get someone to talk to the American people and communicate clearly the challenge we face. No more finger pointing, politicking or use of nebulous terms like “crisis!” If this is truly a crisis than explain it to us. We’re smarter than you think and we tend to band together across ideologies when we see a true National crisis in front of us (think 9/11). If you can’t put it into terms that the majority of Americans can understand, regardless of whether we agree with them, than you haven’t done your job as a National leader!
Second, the current group has lost all credibility! President Bush, Paulson, Pelosi, Reid, Frank, Dodd etc. all have personal skins to lose in this. Of them, the only one that I believe has personal integrity, but won’t allow himself to get into the gutter far enough to fight this out, is President Bush.
We’ve been told every couple of months for the past year that we have a “Crisis!” Housing, Bear Sterns, AIG, Lehman Brothers. We’re worn out from crisis’! Worse yet, each one that comes up is supposed to be “the act” that gets us past any further crisis. To date, that hasn’t happened.
As I said, the current crop has lost all credibility. I believe that is a big reason why the bailout bill failed. The public says “fool me once shame on you, fool me twice, shame on me!” They want to know that the money that they are about to put up will actually be used for the purpose it is intended for and that the folks running it are not just mouthing “American Taxpayer” but actually working in the best interest of the American taxpayer!
To that end, I propose that we need a new leader for this effort! I propose that if Paulson really believes this to be the crisis he has been telling everyone it is, he should work with President Bush and Congress and get Mitt Romney to run the effort.
Putting Mitt in would serve two purposes. First, while he did run for President, Mitt is outside of the Washington establishment. You won’t find anyone who has no political affiliation to handle the job but Mitt should be close and seen by most folks as a strong problem solver with an excellent financial mind. If you ask most people, they would say he is known for saving the horribly mismanaged Utah Olympics and that would go a long way towards credibility. Second, if Paulson handles the program, he will be replaced when the next President is elected. This is a role that needs continuity and needs to stay apolitical if it is to be successful. Putting Mitt in now would satisfy both of those needs.
Perhaps the most important reason for Mitt to be involved is that it would give a reason for Republicans to change their vote. While they may still not like all aspects of the bill, if a cogent explanation for the need was provided (something Mitt could do better than anyone in Washington) so that the public understood the need for the plan, adding Mitt’s name would allow Representatives to tip toe down the middle with a line that sound like: “I don’t like this. However, the case has been made and it’s important that we try this. If anyone can return all the money and perhaps a profit to the American taxpayer it is Mitt Romney.”
There is no easy answer here. I believe the bill that was voted down today is now the best possible hope we have. If we can get it back and get a trusted and capable overseer, we could yet find a silver lining in this mess.
Revisions/extensions (6:54 am 9/30/2008, steveegg) – Cleaned up the formatting slightly.
