Meltdown!
AP: Chad Pergram and House Minority Leader John Boehner
By Chad Pergram
What if you went to the baseball park every day and the same team won every day?
Boring.
That’s what usually happens in the House of Representatives. And when I come through the Congressional turnstile each day, I know which team is going to win: the majority party.
See, a determined majority in the House can always win. It doesn’t matter if Democrats or Republicans are in charge. The majority can always win. It’s routine.
In the House, the rule is you don’t bring a bill to the floor unless you know you have the votes to pass it.
That’s why I looked forward to taking my seat in the Congressional bleachers for Monday’s “game” on the financial rescue package. No one really knew if Democrats and Republicans could cobble together a coalition to approve the critical measure.
The outcome was worth the price of admission.
Lots of issues come and go here on Capitol Hill. But I have never seen a piece of legislation where the stakes were so high, the outcome so unclear and lawmakers so vexed about what to do.
Politicians are notorious for breaking campaign promises. But here’s the one they break most often: Running commercials promising to go to Washington to take tough votes.
Lawmakers from both parties don’t like taking tough votes. If they did, they would have clamored for this one. And for legislative engineers, it would prove to be the ultimate challenge: Convince everyone to approve a bill that no one likes yet everyone agrees is necessary.
Winston Churchill may have described the Soviet Union as “a mystery wrapped in a riddle inside an enigma.” He may as well have been depicting the conundrum facing Congressional leaders.
Big votes come down the Congressional pike only every few years. On Sunday, retiring Rep. Chip Pickering (R-MS) warned the GOP that this would be a “legacy” vote, like impeachment or the vote to invade Iraq.
Lawmakers squirmed as they wrestled with their decision.
Demonstrative of that was Rep. Alcee Hastings (D-FL).
At nearly 11 pm Sunday, Hastings (D-FL) admitted to his colleagues on the House Rules Committee that his vote had come full-circle. It orbited from a “solid no to undecided to lean yes, to undecided and back to solid no.”
So when I hit the Capitol Monday, one of my first goals was to figure out where the votes were. And while vote-counting is always a peculiar bit of political alchemy, nailing down the votes for this would be particularly elusive.
It wasn’t long until I heard that Democrats would probably lose about 100 Members of their Caucus. So that meant Republicans would have to cough up about 100 votes of their own to make up the difference.
Not long after the debate began, House Majority Leader (D-MD) Steny Hoyer (D-MD) told me he” thought he “had the votes” to pass the bill. But a little later, a senior member of the Democratic leadership team conceded to me that he wasn’t as positive. He that they may have to leave the vote open a while to twist arms.
Leaving a vote open isn’t unheard of. House rules require most votes to stay open at least 15 minutes. Clocks on “scoreboards” inside the chamber usually run down to 00:00. But like soccer, the time is kept on the field. They don’t close votes immediately and allow play to continue a few minutes afterwards.
This is where whipping comes in. Whipping is what Congressional leaders do to persuade lawmakers to vote their way. They appeal. They horse-trade. They cajole. Even threaten. Often the best time to “grow” a vote comes when the scoreboard clock winds down and a bill’s fate lies in the balance.
At that point, the House chamber can evolve into a legislative crucible, built to forge just the right alloy of Democrats and Republicans to approve a bill.
But here’s the problem: lawmakers didn’t have time. Rosh Hashanah loomed at sundown. The House wasn’t even supposed to be in session Monday. It was already pushing 2 pm even though Democrats brought the House into session early in the morning. The vote count stagnated. Jewish lawmakers had to jump on airplanes. And it became clear the votes just weren’t there.
The vote tally surged ahead for a while, then retreated. And finally fell behind. I watched the Dow start to crater in synchronicity with the failing House tally.
But I knew the vote was in trouble just before they rang the bells to call lawmakers to the chamber.
I heard rumblings that the GOP thought it could deliver eighty-some Republican votes. And that vote could increase on the floor.
But as soon as the vote began, I received the following, cryptic message from a GOP source.
“Pelosi’s partisan speech has caused our members to go berserk and may cost us any remaining chance to pass the bill.”
Republicans were never high on voting for this bill. But I wondered if this message about House Speaker Nancy Pelosi’s floor speech could serve as a fig leaf if Republicans didn’t deliver some goods..
The timing seemed premature. But the signal was prescient about the bill’s demise.
Not long after the vote, a toddler accompanied her parents on a tour of the U.S. Capitol. The three-year-old gleefully pushed her own stroller across the marble floors of Statuary Hall in the House wing of the building.
She had a ball. Even as chaos unfolded just steps away from her.
Then Steny Hoyer rounded a corner with a wall of reporters, camera crews and photographers in tow. The financial emergency bailout bill just melted down. And a galloping squadron of reporters barked at Hoyer to tell them what went wrong.
Oblivious, the girl ran her stroller around in circles. And the herd nearly stampeded her had an astute adult not scooped her up a nanosecond before the rolling throng bowled through the Capitol.
The toddler might not have been AIG or Bear Stearns. But after the $700 billion bill imploded, the tot become the only person to secure a Congressional bailout Monday.
- Chad Pergram covers Congress for FOX. He’s won an Edward R. Murrow Award and the Joan Barone Award for his reporting on Congress.
When the story hits, FOX News is there. With bureaus across the world, there isnt any news that gets by FOX News. 
Regardless of all this please publicize the removal of the “Mark to Market” rule and replacing it with 3 years average…this will solve the current issue with credit freeze immediately without any congressional approval. I feel that because of lack of undemanding the executive branch and congress are stealing from the public..Please, please publicize the removal of “mark to market” it is wrong.
Safwat
Look like Osama Bin Laden’s goal is being realized in 2008.
Excellent word play. Excellent writing. Thanks for the view into the House. Keep it up.
No Bail out.
The messiah, the second coming of Christ, Obama has spoken. HE has told Congress to PASS the bailout. When HE speaks, everyone falls on the floor and listens. After all, Obama friends and cohorts are the Wall Street crooks this bailout will help. Of course Obama wants the bailout to pass.
STILL GOING TO VOTE FOR THE LIBERAL, GIVE-IT-ALL-AWAY BOY????
I do not believe the bail out is a good idea no matter what they call it! This morning we have no plan, it was rejected yesterday by the house. I have heard that the market is recovering/ rebounding and that the dollar is actually up. It seems in college I remember learning that the economy has cycles, that it is almost a living thing, it self corrects, adjusts, etc… If we try to manipulate the market with this 700 billion dollar crap shoot are we just deceiving ourselves and possibly making things worse? I have investments, am a small business owner, and am suffering along with everyone, but this plan worries me. There are no guarantees and in fact it may make matters worse.
What bothers me the most about this bail out plan is the premise behind the whole credit fiasco: that Americans cannot function except on credit. Loans to make payroll. Loans to pay (business) utilities. Loans to put in next year’s crop. Loans to buy a car. Loans to buy a house that may or may not be worth what the bank is lending you. Loans to prop up bad loans. Our solvency is at risk, true, but if we cannot function without credit, then we are alot worse off than $700 billion is going to fix.
I find it really insulting to have allegedly intelligent people once again “blaming the victims” for the crime. Surely there are enough high paid CEOs & employees of investment banking firms, real state conglomerates, and others who knew for quite some time that they were profiting unwisely, if not illegally, for many years now, who are the true culprits in the demise of the price of stocks on Wall Street.
I continue to be amazed that no politician has the guts to stand up and say, “You created the problem, you fix the problem.” Instead, they are more than happy to come after the ever-shrinking paychecks of regular working class people for even more government “bailouts.”
Let’s call the USA what it has become - a socialist country with government run banks and businesses that the working class people support. Isn’t that why we had a Revolutionary War? Something about tax on tea - that got dumped overboard in the Boston Harbor? It is about time to cry, Enough is Enough!
I heard Nancy Polusi speak about how the republicans are at fault for the Financial proprem, how wrong she is. The democrats are is office for 2 yrs. now and have done nothing but go on vacation. She should be ashame of herself. How did she ever get to be House Speaker? The democrats are the biggest takers of money from all the big firms. Obama is NO. 2 and yet nowone ever mentions it. The people should throw all the now Senators out and vote in a whole new young group. Let these old guys take their pensions and run.
This is a war. It is a war between long term investors and market
manipulators (and other short-term actors). When it comes to real estate,
mark-to-market creates a significant gap between the “book value” and
underlying asset value…a gap that can, and has been, and is, and will be
(under the bailout) exploited by insiders and market manipulators. No more.
I tried to email my congressman today and encourage him and other republicans to work out a new plan but the email system at the US congress has crashed as of 4PM today.
LET IT MELT!!! I too have a lot to lose and I am willing to let the market correct itself. The fact that the criminals are trying to bully us with fear tactics ticks me off! I think the ones who are the most scared are the ridiculous group of weasels who are only in it for themselves. CLEARLY the American people have spoken and I’m sick and tired of being thought of as an idiotic sheep that will do whatever the media says. I hope that there is major fall out after Thursday when you know darn good and well they’re going to pass it IN SPITE of what the American people are still saying!!! We need to quit being so apathetic and letting these crooks have power.
Tell all your friends that if we put a Democrat in office we will end up a socialistic country - explain to them that yes, Bush is a total disaster, he spent like a democrat without the taxes to fund the spending. thus, debt. Get a Democrat in there - they love big government - we will become a socialist nation. GUARANTEED. Even people who are uneducated and uninformed get this and most Americans don’t want to be socialist. Write letters to the editors and get the word out.
Obama is not going to make changes. Why would he? All of his buddies are in the house and senate - what is the motive to change??? He just wants that position.
Please listen to Knute Gingridge. He actually knows what he is talking about. Remove the mark to market and keep free enterprise alive in America. It will have immediate results. Let’s see what happens.
Just on, John Gibson “CONNECT THE DOTS”. Of the 94+ Dems that voted no on the bailout, those closest to Obama, who supports him most, all voted NO. Well over 20 of them in his caucus including Jesse Jackson Junior - his Nat’l. co-chair.
There’s your answer as to why 94+ Dems voted NO. When you have a DEM congress, and they are trying to get their Dem Candidate voted in, the no vote should have been predicted. Due to McCains involvement last week, a yes vote would have credited John McCain on some levels, and they can’t have that at any cost.
So yesterday thousands of seniors lost thousands of dollars in their retirement accounts while the Dems played politics on an issue that directly hurt the American public. No surprise there.
Outrageous!
As long as Polisu is there, you want do any thing, she is the one that you can’t trust peroid.
I am glad that they have taken a beep breath……and did not pass the bail-out!!!!! To more important things……why are the Dems so quick to insure voter fraud in Ohio!!!!! We can not let a LIAR AND/OR DECEIVER WIN THE WHITEHOUSE!!!!!
PS. Please be careful we need MCCAIN/PALIN
No bailout . Listen to William Isaacs, the former Fed Chairman who was at the helm through the S&L crisis of the 80s.
Please, PLEASE - elected officials: reach down in your gut and come up with the moral fortitude and the political courage to stand fast and CRAFT a response - no knee-jerk $700B “rescue” that we don’t even know will work. THINK! ASK those who are more knowlegable (what a concept) and WORK together to come up with a different plan.
Getting rid of mark-to-market is #1. Increasing FDIC coverage is #2. Covering sub-primes with FHA insurance to increase their marketability is #3.
So - get to work.
Why dont we take $500 Billion and pay China off. Then freeze imports! Which would open up all sorts of new bussinesses and jobs. We could take this time to regroup as a nation.
Ok Congress:
‘
Here is what we should do:
1) Put the present system in bankruptcy reorganization. No bailout. if it failed then it needs to be reorganized, not given more money to fail again with the same people who failed.
2) Congress, with a new National Bank of the United States, creates a two-tiered credit system.
Increase short-term rates to 4% and issue low-interest (1 or 2 percent) credit for infrastructure projects - mass transportation, road and bridge improvements, and hospitals, etc…
Re-issue real money - U.S. Treasury Notes
3) Establish a new international financial system based on fixed exchange rates such as the historic Bretton Woods System of 1944.
There you have it.
Great writing! Loved this story. For those that want some understanding of some of the issues involved in this crisis, I would recommend the article on the Federal Reserve System listed on Wikipedia. It is a quick way to get a greater understanding of some of the issues involved.
It has an amazing amount of information that we as citizen should digest in order to use our vote and influence wisely. It breaks down What the Government responsibilities are for oversite and also what the Federal Reserves responsibilities are. That would be good to know right about now.
An interesting fact is that “$780 billion represents the total face value of Federal Reserve Notes in circulation.” That’s all of the US dollar bills in circulation. They have other assets of course, but that gives you a picture of how much money we are talking about.
Here is an interesting quote Under the heading of :
PREVENTING ASSET BUBBLES
“This policy is described in United States Code, Title 12, Chapter 3, subchapter 7, section 301:[
Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts, or other credit accommodations, the Federal reserve bank shall give consideration to such information.
It goes on to say that “Whenever, in the judgment of the Board of Governors of the Federal Reserve System, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hearing, suspend such bank from the use of the credit facilities of the Federal Reserve System
Another policy is: Whoever knowingly makes any false statement or report, or willfully overvalues any land, property or security, for the purpose of influencing in any way…shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
I don’t work in the financial system or the government so I need to get up to speed on these important issues that will have such a great impact on our country. Thought I would pass it on.
It has information regarding, the recent bailout activities and how that has affected the assets of the Federal Reserve. It also explains the history of the Federal Reserve and has organizational charts with biographies of the Board of Governors. Let’s get informed and not depend on political spin to form our opinions!
Since this whole mess was a result of about 3% of loans in default, why not let the Government foreclose and take over these properties, and bring the loans current with all the lenders. Then the holders of the mortgages will have the cash flow they originally needed. They will have solid balance sheets, although leveraged to highly, but still positive cash flow. The Govt (new agency like the RTC) will sell the foreclosed properties for whatever they can get. The banks are well again.
After that, regulators require banks to transition to less leverage (more capital) over time.
Everybody is well again.
Is anything wrong with this solution?
Since this whole mess was a result of about 3% of loans in default, why not let the Government foreclose and take over these properties, and bring the loans current with all the lenders. Then the holders of the mortgages will have the cash flow they originally needed. They will have solid balance sheets, although leveraged to highly, but still positive cash flow. The Govt (new agency like the RTC) will sell the foreclosed properties for whatever they can get. The banks are well again.
After that, regulators require banks to transition to less leverage (more capital) over time.
Everybody is well again.
The countries legislative representatives ought to be ashamed of themselves. Its sickening to watch what is happening in this country and to think the only way to try and stop this bailout is call & write your congressman? WHAT? Lordy, give me a break, we need stronger action to take care of this problem. GREED has been in Washington for years but this govt. bailout takes the cake! THIS NEEDS TO STOP! Let the loan agencies fail!! and let the normal economic climate take control..!! If this bailout succeeds with a positive vote then I’m not sure there is any hope for this country.
That’s pretty bad, they can’t pass evenr a rotten piece of legislation and a small child as well as America almost gets trampled- these goofballs need to watch where they are going. You wonder if they are paying attention to anybody or anything. That’s creepy. I’m glad the bill failed myself, knowing my broker, he probably is as well unless he knows something I don’t- he probably does anyway. I hope they get something senseible done though, because if they don’t the president is going to just push this idoiotic piece pf crap through anyway by executive order. I hope he doesn’t- he’ll regret it the rest of his life if he does.
This bail out is for the corporate big dogs and not for the american people. Everytime we have given tax breaks and help financialy to big business they have decided to up and move their plants and jobs to other countries. If we are going to help anyone it should be small businesses and not big businesses. No one bails out the small guy for making bad decisions in the market place so why should the american people bail out the rich people making bad decisions. They say that credit would be unavailable for big business- that is incorrect. Every person out there with a mortgage or credit card are paying rediculous amounts of interest. Where is all this money going. Take a mortgage for instance, on a $1000 mortgage how much is actually interest and how much goes towards the principal. The middle to lower class are the actual losers all the way around. Its time we stand up and let the upper class pay for their own mistakes.
This Bill and the Politicians that support it should be laid to rest in a pile of Dung. It is high time that the Politicians “SERVANTS OF THE PEOPLE” start listening to them, or get the hell out.
GOD HELP US!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Well tax payers you lost trillions instead of taking a chance on 7 B, which you will get back.
Are you happy now
When I heard Pelosi speak I lost it and I said no way now how would I vote for the bill when she blamed the Republicans. You dont dam someone when you want there vote. I think she is the worst Speaker of the House I have ever heard. She owes the Republicans an apology. BIG TIME
aFTER THE SPEACH PELOSI GAVE I WOULD NEVER VOTE FOR THE BILL EVEN IF I WENT FLAT BROKE.
I cannot believe that 95% of your viewers do not want the bailout package. I am retired and see my savings being drasticly reduced. I am one of those who did everything right and now it is going so terribly wrong. It is extremely important for congress to put together a responsible bill and do it in a bipartisan way. I fear what will happen if the democrats pass the bill solely on their own.
I find Nancy Pelosi and Barney Frank’s comments totally dispicable. I hope they are voted out whenever they come up for reelection.
After Pelosi spoke I said I would never vote yes even if I went flat broke, She is a sorry excuse.
RE:
Comment by sue
October 1st, 2008 at 10:48 am
Well tax payers you lost trillions instead of taking a chance on 7 B, which you will get back.
Are you happy now
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I don’t think most people understand the reality of the effect it would have on everyone, not just the wall street elite, that it could shut down everything, especially small business,might not be able to get money for payroll and as seen Monday when they didn’t pass it, the stock market drops drastically. Now, I realize many people don’t have money in the stock market, but hopefully they realize that includes their 401K, IRA, Money Market accounts, and the value of those would decrease drastically too.
The Government just came out with this uge “bail out” without any education of what would actually happen. It’s my understanding that a lot of these groups of mortgages still have good mortgages in them, and the others they would hold until the real estate market goes up, then sell them, so it’s not really a “bail out”, we should get our money back.
I think they should have done more education on the front side, not just come out saying 700 billion dollars, everyone has been in shock since then and can’t absorb anything
McCain left WASHINGTON maybe now they can get to the right vote. Unless he desides to fly back and save the day again. What a joke this guy is he wants the credit to change OBAMAS surge in the polls
If this is allowed to fail–can you say “GREAT DEPRESSION”? Those who are in denial please listen to the voice
of reason. Once this legislation is successful, then prosecute the bankers that are at fault.