Thread: House Republicans Rejoin Talks to Craft Rescue Plan (Update3

House Republicans Rejoin Talks to Craft Rescue Plan (Update3)

By Jeff Bliss and James Rowley

Sept. 26 (Bloomberg) -- House Republicans rejoined talks on a financial rescue plan as leaders of both parties vowed to keep Congress in session until a deal is reached.

``I'm hoping that we will make progress,'' House Minority Leader John Boehner, an Ohio Republican, told reporters today. At the same time, he said his party's lawmakers ``will not agree to a bill that sells taxpayers out to bail out Wall Street.''

Yesterday, Republican lawmakers offered a plan calling for Wall Street firms to purchase insurance on mortgage-backed securities and advocating tax cuts and relaxed regulations. They objected to a $700 billion bailout proposal put forward by Treasury Secretary Henry Paulson, derailing an agreement on the outline of a deal that had been reached by the administration, Democrats and Senate Republicans.

President George W. Bush and Senate Democratic and Republican leaders said earlier today that lawmakers could reach an agreement within days.

``We are going to get a package passed,'' Bush said in a statement at the White House. ``We will rise to the occasion, where Republicans and Democrats will come together and pass a substantial rescue plan.''

Yesterday's Plan

Congressional negotiators said talks would start with what was agreed to yesterday by Senate negotiators and the administration, including authorization for an immediate expenditure of $250 billion for the Treasury to buy distressed debt securities plus another $100 billion at the government's disposal. Another $350 billion could be spent to buy troubled assets unless Congress specifically acts to bar that authority.

Other elements agreed to by the administration include restrictions on executive compensation by participating financial firms. House Financial Services Committee Chairman Barney Frank said that Paulson had agreed to equity stakes for taxpayers in the companies through warrants. Frank said the Republican's insurance plan was also ``an option.'' Treasury officials had previously rejected a plan focusing on insurance in favor of one that purchased troubled assets. Yet Ed Gillespie, a senior Bush adviser, said some of the Republican proposals ``can be accommodated, possibly.'' Bush will rely on the recommendations from Paulson and Federal Reserve Chairman Ben S. Bernanke whether the modifications are workable.

`Will It Work?'

``We look at everything through a prism of `will it work' and `can we get it done,' and if it meets those two tests, then we'll be for it,'' Gillespie said.

The administration is trying to make ``some adjustments, some tweaks'' to lure opponents, he said.

Senate Majority Leader Harry Reid, a Nevada Democrat, said an agreement could be drawn up today or tomorrow and a vote held ``this Sunday or Monday.''

Senate Banking Committee Chairman Christopher Dodd of Connecticut, Senator Judd Gregg, a New Hampshire Republican, and Frank met this afternoon. Dodd said formal talks involving House Republicans were postponed because of a scheduling conflict.

``We are still very optimistic that an agreement can be reached,'' Dodd said.

Frank said today that ``it doesn't sound like'' House Republicans want to scrap the Treasury Department's bailout plan.

Talks Start

``The Republican staff is now joining the negotiations and it does look like they're ready to help work on this thing,'' he told reporters. ``They came to a meeting in which we were negotiating on the Paulson plan'' and ``it would not have made sense to do that if you were against the plan.''

In a further sign the deadlock is easing, Alabama Senator Richard Shelby, the top Republican on the Senate Banking Committee, said he had reconsidered his decision to try to block a bailout package.

``I know politics, I read the tea leaves,'' Shelby told reporters outside the Senate chamber today. ``There's going to be a deal here if there's any way to do it and it's not going to be, I believe, in the best interest of the American people.''

Boehner, who attended a White House meeting to discuss the rescue yesterday, said the Republican proposal wasn't new and wasn't meant to scuttle the negotiations.

Today, he tapped House Republican Whip Roy Blunt of Missouri as his lead negotiator. In an interview on MSNBC, Blunt said Republican presidential candidate John McCain's involvement in the discussion yesterday ``stopped a deal from finalizing that no House Republican, in my view, would have been for, which means it wouldn't have probably passed the House.''

`Too Late'

Yet Peter Wallison, a McCain adviser, said it is now ``too late'' to oppose the bailout and Congress must move to enact the administration's plan so banks can make loans. He criticized House Republicans for stalling negotiations with their plan.

``That's the kind of proposal that might have been put on the table a year ago,'' Wallison, a resident fellow at the Washington-based American Enterprise Institute and former counsel to President Ronald Reagan, said in an interview with Al Hunt on Bloomberg Television to be aired this weekend. ``We have a plan on the table that will work.''

Democrats said the Republicans' insurance provision wouldn't get support unless it was integrated into the Paulson plan.

``The question of insurance is an option,'' Frank said. ``But the notion that you substitute that for the other is totally unacceptable to Paulson'' and Bernanke.

Washington Mutual

The uncertainty over the rescue package was exacerbated by the government's announcement of the takeover of Washington Mutual Inc., the largest U.S. savings-and-loan institution. Gregg said market conditions forced House Republicans to show more willingness to engage in discussions.

``Anybody who got up this morning and looked at the market, especially the credit markets, had to take a deep breath and say, `This is serious. We better do something,''' he said.

In a statement sent to congressional leaders last night, former Fed Chairman Alan Greenspan, former Secretary of Treasury and State George Shultz and Robert Hall, a senior fellow at the Hoover Institution, urged Congress to take action quickly or risk further market turmoil.

``We urgently advocate immediate, extensive action that would maintain the functions of credit markets and prevent a serious economic contraction,'' they wrote. ``The only way that financial institutions can continue to function is for the government to provide financial support.''

White House Meeting

The stalemate followed an unprecedented meeting at the White House with Bush, McCain, Democratic presidential nominee Barack Obama, congressional leaders and Cabinet officers.

Frank said that McCain's decision to return to Washington from the campaign trail to attend the meeting contributed to derailing the agreement that had been reached yesterday afternoon.

``Now that Senator McCain is safely in Mississippi, we can get back to serious work,'' he said.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said that McCain's role ``has been entirely constructive.''

Obama said he talked this morning with Paulson, Reid, House Speaker Nancy Pelosi of California and Dodd and has spoken with some congressional Republicans over the past day.

Obama said today that he is ``optimistic that we can get something done.'' Speaking to reporters on his campaign plane, as he traveled to Mississippi for tonight's presidential debate, he said, ``I think there is real progress being made.''

McCain at Debate

The McCain campaign, meanwhile, announced that the Republican would participate in the debate. Earlier this week, he suspended his campaign to focus on the crisis, and said his attendance at the debate was in doubt.

Vice President Dick Cheney canceled trips to New Mexico and Wyoming today to help broker a bailout agreement.

Democratic Representative Paul Kanjorski of Pennsylvania told CNBC today that constituents were flooding lawmakers with appeals to oppose the bailout.

Calls to congressional offices are ``running 50 percent `no,' and 50 percent `hell, no,''' Kanjorski said. ``Out of 100 calls, you are lucky if one of them is positive.''

At the White House meeting earlier yesterday, Paulson, on his knee, asked Pelosi not to allow the negotiations to blow up, according to a participant in the meeting.

To contact the reporters on this story: Jeff Bliss in Washington at jbliss@bloomberg.net; James Rowley in Washington at jrowley@bloomberg.net

Last Updated: September 26, 2008 20:53 EDT

http://www.bloomberg.com/apps/news?pid= ... refer=home

At the White House meeting earlier yesterday, Paulson, on his knee, asked Pelosi not to allow the negotiations to blow up, according to a participant in the meeting.

That's a new one...Pelosi must love having him bow down to her royal highness, Miss 3rd-in-line to the president.

``We are going to get a package passed,'' Bush said in a statement at the White House.

THIS IS BASICALLY THE SAME THING BUSH SAID ABOUT THE AMNESTY FIGHT LAST YEAR. AND WE KNOW WHAT HAPPENED TO THAT.

Third Party Chuck Baldwin gets my vote to teach these Democrats and Republicans a lesson. Wouldn't it be nice if only Chuck Baldwin got 20%?

Originally Posted by vmonkey56

Third Party Chuck Baldwin gets my vote to teach these Democrats and Republicans a lesson. Wouldn't it be nice if only Chuck Baldwin got 20%?

IT WOULD BE NICE. AND AT THE RATE MCCAIN AND OBAMA ARE GOING DONT BE SUPRISED IF AMERICANS JUST GET P'D OFF ENOUGH TO DO IT.

I got a call from Obama's campaign asking if I support Obama, no, then asked "McCain?" I said no Chuck Baldwin, to that she said I was the fourth person telling her that.
This could be the "change" we need.

Democratic Representative Paul Kanjorski of Pennsylvania told CNBC today that constituents were flooding lawmakers with appeals to oppose the bailout.

Calls to congressional offices are ``running 50 percent `no,' and 50 percent `hell, no,''' Kanjorski said. ``Out of 100 calls, you are lucky if one of them is positive.''

Darn tootin, I voted for HELL NO!

Originally Posted by vmonkey56

Third Party Chuck Baldwin gets my vote to teach these Democrats and Republicans a lesson. Wouldn't it be nice if only Chuck Baldwin got 20%?

Do you know that in NC you can't vote for Baldwin, not even as a write-in because he missed the deadline to allow him to be written in?

I'm not voting for president this time, but I will go and vote for governor, AG, etc.