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Bush Calls Bailout Vital to Economy, Will Meet With McCain and Obama
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House Republicans have emerged as the most difficult bloc of votes, with moderates fearful of the price tag and conservatives opposed to the rejection of free-market principles implicit in the plan. A meeting Tuesday morning with Vice President Cheney only increased their defiance.
"The Paulson proposal has not gotten the traction required to complete this process by the end of the week," said Rep. Adam H. Putnam (R-Fla.), the third-ranking Republican in the House.
Paulson and Federal Reserve Chairman Ben S. Bernanke tried to change that yesterday during appearances before two congressional committees. But the former Wall Street dealmaker and the former economics professor struggled to paint a vivid picture of the harm that would befall the economy if the bailout was not approved.
At one point, Rep. Steven C. LaTourette (R-Ohio) pleaded with them to explain the crisis in terms a factory worker relaxing on his couch could understand.
"In order to accept this plan, he needs to be more scared," LaTourette said. If Congress doesn't act, "I need you to tell this guy on the couch what happens to him. Is he going to be out of a job? Is his credit card going to work? Can he buy a car? Is his daughter going to go to college?"
Paulson replied that the guy on the couch should be scared. "But I think right now he's angrier than he is scared.
"It puts us in a difficult position," Paulson continued, "because no one likes to be painting an overly dire picture and scaring people. But the fact is, the financial markets are not stable, and the situation can be very severe as it relates not just to his current situation, but to keeping his job" and preserving his retirement accounts.
By midday, it became clear that Paulson and Bernanke were not getting the job done; the president would have to deliver the message in person.
In his national address, Bush used the sort of everyday terms that lawmakers had been seeking to describe the potential collapse.
He warned that community "banks could fail," that another stock market plunge would "reduce the value of your retirement account," that farmers would not get credit and that parents would not be able to "send your children to college."
In addition to easy credit, the president blamed mortgage-finance giants Fannie Mae and Freddie Mac for contributing to the crisis by borrowing "enormous sums of money" and fueling the market for questionable investments.
"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all," Bush said, noting that under usual circumstances his conservative ideology would have allowed markets to work their will.
"These are not normal circumstances," he said.
Staff writers Michael Abramowitz and Neil Irwin contributed to this report.
