By Dan Eggen
Washington Post Staff Writer
Wednesday, October 1, 2008
For the ninth day in a row, President Bush outlined a frightening scenario yesterday that could occur if Congress does not enact his financial rescue package: More banks will fail, home values will plummet further, and a stock market collapse will wipe out the retirement and savings accounts of regular Americans. "If our nation continues on this course," he said, "the economic damage will be painful and lasting."
Throughout his presidency, Bush has often relied on similar warnings of imminent danger to gain support for some of his most controversial initiatives, including the U.S. invasion of Iraq, tax cuts and broad expansions of federal surveillance powers.
But this time, it hasn't worked so far. Even amid continuing bank collapses and severe stock market swings, some lawmakers and many of their constituents have openly doubted the grim economic warnings from Bush and his aides. The skepticism contributed to Monday's House defeat of the administration's $700 billion rescue plan.
The White House may salvage a deal, and congressional leaders vowed yesterday to keep pressing for compromise legislation. But many lawmakers and political analysts complain that Bush, Treasury Secretary Henry M. Paulson Jr., Vice President Cheney and others relied too much on scare tactics in their attempts to win rapid congressional approval of a package that would allow Paulson to purchase bad assets backed by home mortgages in an attempt to shore up the credit markets.
"The only thing we have to fear is the fear-mongering," said Rep. Louis Gohmert (R-Tex.), who voted against the plan.
Newt Gingrich, the former GOP House speaker who was a leading critic of the original rescue plan, said Bush "succeeded in frightening people, but that sort of gradually wears off. What he's warning about is very serious, but I don't think he accomplishes much."
From the left, many lawmakers and voters viewed Bush's warnings through the lens of his most controversial initiatives, such as the push for the war in Iraq based on intelligence that turned out to be faulty. Rep. Lloyd Doggett (D-Tex.) said before the vote against the rescue plan: "Like the Iraq war and the Patriot Act, this bill is fueled on fear and hinges on haste."
Many lawmakers also complained about a meeting early last week between Cheney and House Republicans. Rep. Christopher Shays (R-Conn.), a moderate who supported the proposal, said Cheney spent 15 minutes "depressing" Republicans with a presentation that warned of dire consequences to the financial markets with little reference to average Americans. "Dick Cheney lived up to his reputation as Darth Vader," Shays said.
White House spokesman Tony Fratto, questioned by reporters yesterday about the administration's handling of the rescue package, said officials are "not going to engage in finger-pointing on this issue. What we're focused on is fixing the problem and trying to get it to a solution that can pass."
The skepticism persists despite clear signs that the economy is in crisis. In the past month alone, the government has taken over mortgage giants Fannie Mae and Freddie Mac and has brokered a series of rescues for banks and other firms.
John Kenneth White, a politics professor at Catholic University, said that while fear is a powerful motivator in politics, Bush's approval ratings are so low that even a clear-cut threat is now met with skepticism in some quarters.
"They went back to a kind of politics of fear, which worked for them for a very long period of time after 9/11," White said. "But that doesn't work for him anymore because of his credibility problems. . . . Trust is still the coin of the realm in the end."
Pete Wehner, a former Bush White House aide, said that while a "subset" of lawmakers may be skeptical of Bush, most of the House opposition was driven by the public's "visceral" reaction to a Wall Street rescue. "I don't know that the public doesn't think that there is a danger; I think they just don't like this particular prescription," he said.
Perhaps the starkest warnings about the crisis came a week ago during an unusual presidential address from the East Room, when Bush told a prime-time national audience that "our economy is in danger" and that "America could slip into a financial panic."
Gingrich noted that "The Daily Show," a popular cable satire program, assembled a widely watched video showing the similarities between that speech and Bush's March 2003 address announcing the Iraq invasion. "That was very damaging," Gingrich said.
Yesterday, Bush appeared drawn and frustrated during his brief statement in the Diplomatic Reception Room, and sounded the same themes and warnings that he has issued throughout the crisis.
"I recognize this is a difficult vote for members of Congress," he said. "Many of them don't like the fact that our economy has reached this point, and I understand that. But the reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act."
Staff writer Paul Kane and staff researcher Madonna Lebling contributed to this report.