Lawmakers Get Down to Details of Drafting Bill
Saturday, September 27, 2008
Talks over the Bush administration's plan to stabilize the U.S. financial system lurched forward yesterday, as rebellious Republicans returned to the negotiating table and congressional aides began the tortuous work of drafting a bill to execute one of the biggest interventions into the private market in modern history.
One day after they nearly derailed the plan, House Republicans agreed to send their second-ranking leader to negotiate with Democrats and Senate Republicans.
Lawmakers canceled plans to adjourn yesterday for the November election and instead prepared to work through the weekend on the proposal, which would authorize the Treasury Department to spend up to $700 billion to take bad assets off the books of faltering financial institutions. Democrats said they hoped to announce an agreement late Sunday before Asian financial markets open, with a House vote on the measure possible by Monday. A Senate vote would follow later in the week.
"Great progress is being made. We will not leave until legislation is passed that will be signed by the president," said House Speaker Nancy Pelosi (D-Calif.).
Added Rep. Barney Frank (D-Mass.), an architect of the legislation: "I am convinced that by Sunday we will have an agreement people will understand."
With global markets hanging on every twist of the debate in Washington, White House officials swarmed Capitol Hill in an attempt to salvage a deal, while President Bush issued another call for action during a brief appearance outside the Oval Office.
"There are disagreements over aspects of the rescue plan, but there is no disagreement that something substantial must be done," Bush said yesterday morning. "The legislative process is sometimes not very pretty, but we are going to get a package passed. We will rise to the occasion."
Bush followed his remarks with calls to House Republican leaders, who have balked at approving a massive bailout for Wall Street dealmakers and are pushing an alternative plan to create a government insurance program for home mortgages. Republicans say that plan would blunt the impact of record foreclosures, which have paralyzed institutions that hold mortgage-related assets. But critics say it would do nothing to inject needed cash into banks and other institutions.
Treasury Secretary Henry M. Paulson Jr. presented lawmakers with a three-page plan for salvaging the country's financial system one week ago. By yesterday, following discussions with Democratic leaders, the draft proposal had grown to more than 100 pages, with hours of negotiation to come.
Under a tentative agreement among lawmakers and administration officials, the measure would grant the Treasury sweeping power to buy up bad mortgage-related assets through Dec. 31, 2009, but it also would create an independent inspector general to oversee that program. As the new owner of billions of dollars worth of mortgage-backed assets, Treasury would be required to reduce the number of foreclosures by modifying the terms of the loans that underlie those assets.
Frank said Treasury also has agreed to accept other changes to its original plan, though aides were still haggling over details. Among the changes: