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Bailing Out of the Bailout

By Dana Milbank
Thursday, September 25, 2008

Congressional leaders assembled yesterday on the West Front of the Capitol for the "First Nail Ceremony" to start work on the viewing platform for the Jan. 20th presidential inauguration. While they had the hammer out, they should have nailed a sign to the Capitol door: "Help Wanted."

As the nation plunges into economic crisis, Washington imploded in a leadership vacuum yesterday.

1:17 p.m.: President Bush schedules a prime-time address to the nation to sell his Wall Street bailout package.

2:15 p.m.: Barney Frank (D-Mass.), a lead negotiator, announces progress in talks on the package.

2:30 p.m.: Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke testify to House in support of the plan.

2:46 p.m.: John McCain pronounces Bush's bailout proposal dead.

Is anybody in charge here?

Not the president, evidently. He's so unpopular that Democrats who favor a bailout plan urged him not to speak about it in public. "Frankly, I don't think that will help us pass the bill," Frank told reporters.

Not the vice president, either. After Dick Cheney appeared before House Republicans on Tuesday night to sell them on the proposal, lawmakers emerged howling about the "enslavement" of taxpayers and the "confiscation" of taxpayer money, and they likened the vice president's sales job to that of a used-car salesman or a shady Realtor.

And certainly not the Treasury secretary, whom lawmakers on both sides berated for a second consecutive day yesterday. "We may be looking at national bankruptcy and the road to socialism," Jeb Hensarling (R-Tex.) said after hearing from Paulson yesterday morning.

The presidential candidates, as the leaders of their parties, could bring recalcitrant lawmakers on board. And they have a powerful incentive: The crisis, if left unchecked, will almost surely make a mess of the first term of either John McCain or Barack Obama by leaving the country in a deep recession, or worse. But instead of proposals, they've offered platitudes.

McCain, meeting with business big shots in New York yesterday, took the bold stand that the bailout package should "be in the best interest of the people of this country." Further, the brave candidate proposed that the proposal should have "transparency, accountability, CEO responsibility." But don't corner him with specifics.

"Senator Harry Reid said you were going to vote for the Paulson plan," a reporter from Bloomberg News mentioned to McCain.

"I did not say that," the candidate answered.

"Do you have a comment about that?" the reporter inquired.

"I did not say that," McCain repeated.

Obama was no more helpful to the debate. "Everyone -- Republicans and Democrats, the White House and Congress -- must work together to come up with a solution that protects American taxpayers and our economy without rewarding those whose greed helped bring us to this point," he proposed from the safe distance of Dunedin, Fla.

Specifics? Obama didn't offer any. Instead, he proposed a few unobjectionable bromides. "Make sure that your tax dollars are protected," he said. And: "Provide oversight and accountability." And: "I will not allow this plan to become a welfare program for Wall Street executives."

Without guidance from the top, Democratic lawmakers were adrift, lining up at the House Financial Services Committee yesterday afternoon to air grievances about the package. "It doesn't look right!" said Al Green (Tex.).

"If you feed pigs, they'll become hogs," testified Emanuel Cleaver (Mo.).

"Pigs get fed and hogs get slaughtered," amended Lincoln Davis (Tenn.).

Then, just as Paulson and Bernanke began their testimony pleading for urgency and offering key concessions, McCain torpedoed the whole thing. "It has become clear that no consensus has developed to support the administration's proposal," he said in New York. "I do not believe that the plan on the table will pass as it currently stands, and we are running out of time." McCain announced that he was suspending his campaign to return to Washington, and he called for tomorrow's presidential debate to be postponed.

But McCain's proposal to return to Washington was met with immediate ridicule in the capital, privately from Republicans ("Daddy's coming home!" joked one) and publicly from Democrats. "It's the longest 'Hail Mary' in the history of either football or Marys," Frank said, vowing to continue negotiations with the administration. As for the Republican ticket, Frank told The Post's Paul Kane: "I guess if I wanted expertise there, I'd ask Sarah Palin."

Obama engaged his opponent in a public dispute about which candidate called the other one first to discuss the bailout. Reid, the Senate majority leader, complained that "it would not be helpful" to have either of them return to town, adding, "We need leadership, not a campaign photo op."

McCain's bombshell ended any remaining hope of a quick deal on Bush's bailout plan. But what else was there to do? Paulson continued to testify. Bush went ahead with his speech. And, in the halls of democracy, anarchy reigned.

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