Under the deal among key lawmakers, the US Treasury secretary would get $250 billion immediately and could have an additional $100 billion if he certified it was needed, an approach designed to give lawmakers a stronger hand in controlling the unprecedented rescue. Aides described the details on condition of anonymity because they were not authorized to speak publicly.
The plan's centerpiece still is for the US government to buy the toxic, mortgage-based assets of shaky financial institutions in a bid to keep them from going under and setting off a cascade of ruinous events, including wiped-out retirement savings, rising home foreclosures, closed businesses, and lost jobs.
A group of GOP lawmakers circulated a less government-focused alternative. Their proposal would have the government provide insurance to companies that agree to hold frozen assets, rather than have the government purchase the assets. Rep Eric Cantor said the idea would be to remove the burden of the bailout from taxpayers and place it, over time, on Wall Street instead.
Among other changes agreed to by the congressional negotiators was a limit on pay for executives of bailed-out financial institutions and an equity stake in rescued companies for the government.
Despite the Republican outcry, Banking Chairman Chris Dodd and Republican Sen. Bob Bennett, among others, said the negotiators from Congress and the administration had arrived at a deal that could win approval. Other key lawmakers said that after days of bare-knuckles negotiations there was little of note left to resolve.
Wall Street showed its pleasure – before the negative Republican comments started piling up. The Dow Jones industrials closed some 196 points higher, though that was down from larger gains earlier in the day.
Previous presidents have occasionally consulted with and briefed those campaigning to assume their jobs, but there have been no bipartisan joint meetings of Thursday's magnitude in recent memory. Former President Reagan had planned an October 1987 White House reception with the six GOP presidential candidates, for instance, but canceled the meeting because of the Wall Street crash.
The White House timed the extraordinary meeting to fit candidates' schedules – and to convene after the close of stock markets.
Despite the national prominence of Bush, McCain and Obama, none has been deeply involved in this week's scramble to hammer out a package.
But the developments on the Hill lent fresh purpose to the session: providing encouragement – and political cover – for lawmakers of both parties to accept a plan. It is expected to come up for votes in the House and Senate quickly, perhaps within days, so that lawmakers can adjourn to campaign for their own re-elections.
Any pitch by Bush, Obama and McCain would be no easy sell.
All lawmakers are returning to home districts packed with constituents angry that they are being asked to foot the bill to bail out Wall Street's rich guys when they and their neighbors are suffering the effects of ballooning mortgages and tightening credit. This means Obama and even the increasingly marginalized Bush could have sway with their joint resolve.
McCain, in particular, was being leaned on by Democrats and fellow Republicans alike to deliver GOP votes, as some conservatives are in open revolt over the astonishing price tag of the proposal and the heavy hand of government that it would place on private markets. Placating them enough to bring them in line could be a tall order for the Republican presidential nominee who has a checkered relationship with the right wing of his party.
Layered over the White House meeting was a complicated web of potential political benefits and consequences for both Obama and McCain.
McCain hoped voters would believe that he rose above politics to wade into successful, nitty-gritty dealmaking at a time of urgent crisis, but he risked being seen instead as either overly impulsive or politically craven, or both. Obama saw a chance to appear presidential and fit for duty, but was also caught off guard strategically by McCain's surprising gamble in saying he was suspending his campaigning and asking to delay Friday night's debate to focus on the crisis.
(Agencies via China Daily September 26,2008)
