Obama, Capitol Hill Leaders Speak as One on Crisis
Wednesday, September 24, 2008
Last Thursday, as the Bush administration opened talks with Congress on a $700 billion Wall Street rescue plan, Senate Democrats gathered for lunch in the Capitol to hear former Treasury secretary Lawrence H. Summers urge them to hold firm in their push for more economic stimulus but to move quickly to intervene in the markets.
Summers, now a senior economic adviser to Sen. Barack Obama (D-Ill.), was accompanied by Jason Furman, who is Obama's economic policy coordinator. "Basically, Obama's advisers are our advisers," said one Democratic leadership aide.
While the presidential nominee has seemingly been on the sidelines as the Bush administration and Congress work out the details of the Wall Street bailout, those advisers have been a way for him to exert influence behind the scenes on Democratic strategy. The result is that Obama and the congressional leadership are speaking in unison, amplifying their message that the $700 billion check will have to come with significant strings, and with some money channeled to help the broader economy and struggling homeowners.
Sen. John McCain, the Republican presidential nominee, has also proposed stricter oversight and some protections for federal taxpayers. But while the senator from Arizona labors to separate himself from Bush administration officials, Obama appears to be benefiting from the message amplification provided by Democratic leaders -- especially as both parties turn on President Bush.
"The president's stubborn inflexibility is both unacceptable and disturbingly familiar," Obama told reporters yesterday in Florida. "It is wholly unreasonable to expect that American taxpayers would or should hand this administration or any administration a $700 billion blank check with absolutely no oversight or conditions when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess."
But his involvement also holds risks, especially if the deal collapses amid partisan finger-pointing. McCain has carefully remained apart from the negotiations, watching as Republican leaders decide whether they can ultimately back the package or not. If the GOP bolts, Democrats fear they and their candidate will be left allied with an unpopular president pushing an unpopular bailout.
"We must pass legislation to address this crisis; if we do not, credit will dry up, with devastating consequences for our economy," McCain said yesterday in Freeland, Mich. "But let us be perfectly clear: A great burden is upon the American people -- $700 billion is a staggering and unprecedented figure, and it is important that I speak plainly to the American people about the dimensions of this proposal. In essence, what this plan requires is a $10,000 contribution per household. Seven hundred billion dollars, for example, could rebuild the crumbling infrastructure in every town, county, and state in this country."
Obama struck a similar tone, castigating Bush for the mess and demanding changes but refusing to say where he would ultimately stand.
Obama's involvement with the Democratic leadership has not just been through his aides. He spoke personally with House Speaker Nancy Pelosi (Calif.) on Sunday morning, hammering out demands on corporate governance regulations, executive compensation caps and financial oversight that would go along with the $700 billion, according to congressional leadership aides. Pelosi's chief of staff, John Lawrence, has maintained close contact with Obama economic aides.
And Summers, who has become one of Obama's closest domestic policy advisers, is not the only Clinton administration official helping congressional Democrats. On Monday night, Democratic leaders convened a conference call that included Summers, former Treasury secretary Robert E. Rubin, former Securities and Exchange commissioner Arthur Levitt, Wall Street economist Allan Sinai and California investment banker William Hambrecht, almost all of whom have ties to Obama. Roger Altman, another Obama adviser from the Clinton Treasury, is scheduled to appear at an Obama economic forum in Scranton, Pa., today.
The Obama campaign's staff economists would not respond to phone calls or e-mails yesterday, and congressional aides spoke only on the condition of anonymity, saying they did not want to publicize the links between the campaign and congressional efforts.
But, those aides said, the links were inevitable. In 1999, Time magazine dubbed Summers, Rubin and then-Federal Reserve Chairman Alan Greenspan the "Committee to Save the World," after interventions in economic crises from Argentina to Russia to Southeast Asia to the collapsed hedge fund Long-Term Capital Management staved off a wider economic slowdown.