Wednesday, September 24, 2008

Congressional leaders not stupid?

A shocking assertion I know... but what I've been worrying about this week, regarding The Bailout was that Obama and the Dems in Congress were going to be forced to be adults and pass a less than ideal (or possibly really bad) deal to Save The Economy... but McCain and Republicans could vote against it, since a bailout of Wall Street is likely to be widely unpopular, and it would still pass and Bush wouldn't veto it. McCain and Republicans would thus be able to distance themselves from both Congress and Bush while still getting their buddies bailed out. Pretty sweet deal, and a tactic that I think would have been very effective.

However, via Ezra Klein, apparently Democratic Congressional leaders have undergone spine transplants:
Senior Democrats on the Hill are worried that Sen. McCain, R-Ariz., will "demagogue" the bill, continue to voice opposition to it, use is to run against both Wall Street and Congress, as well as to distance himself from the Bush White House. Democrats worry McCain will not only vote against the bill, he will provide cover for other Republicans to do so, leaving Democrats holding the bag for the Bush administration's deeply unpopular proposal.

A Democratic congressional leadership source says that Treasury Secretary Henry Paulson went so far as to assure Democratic leaders that McCain "won't be a problem" -- in other words, that McCain will vote for the proposal.

This afternoon, Senate Majority Leader Harry Reid, D-Nev., said, "I was told, yesterday afternoon, by the secretary of Treasury, that McCain was in favor of the program. We heard, all through the night, that he wasn't sure. And we don't know, this morning, where he stands on the issue."

So who knows, but it's becoming more clear that, while we are in a crisis, Paulson doesn't need to spend $700 billion YESTERDAY... and the thing that makes the most sense it to get a bipartisan solution doesn't suck. In the worst case, you could approve a short term blank check... like $150 for three months, and ask Paulson to come back and ask for more. Even if McCain votes against something like that, it's not nearly as bad as the Full Monty.