Posted by: Theo Francis on October 02
by Theo Francis and Jane Sasseen
It’s Thursday night and all eyes are on what may prove to be the most-watched vice-presidential debate in history. Friday, however, they will surely turn again to the House of Representatives as it holds a do-over of its dramatic vote Monday.
Will the House, this time, deliver the financial-system bailout that the administration and business groups are demanding, and which the Senate passed Wednesday night?
Probably. But that’s a far cry from the near certainty that preceded the Senate vote. And after Monday’s sudden about-face, it hardly inspires confidence. To be sure, new polling figures suggest public opposition to the financial rescue bill isn’t as strong as it seemed Monday; several dissenting lawmakers have publicly said they’ll vote yes; lobbyists are pulling out all the stops; and word is that House leaders won’t bring the bill to a vote at all unless they are sure — really, absolutely sure — that it will pass; Democrats were set to caucus at 6:30 p.m. Thursday. Meantime, rumors raced that the Oracle of Omaha, Warren Buffet himself, has been calling lawmakers to urge passage. (Buffett’s office declined to comment.)His $8 billion investments in General Electric and Goldman Sachs could run into big trouble if the package doesn’t go forward.
So maybe everyone’s just being careful to avoid falling flat on their faces again. And yet — there are a few troubling signs. “I don’t think they have the votes yet,” Dan Clifton, a Washington analyst for Strategas Research Partners, said Thursday afternoon.
A good part of the potential for problems lies in the very changes that the Senate made to win over the Republicans who balked on Monday. The bill, which started life as a three-page proposal from Treasury Secretary Henry Paulson, has swollen to more than 400 pages, fattened most recently with tax breaks and an increase in federal deposit insurance limits, as well as the mental-health parity bill that is being used as the procedural vehicle to carry the whole shebang from Senate to House.
A slew of tax-breaks added in the Senate -- many of them extensions of existing business breaks or intended to foster green-energy initiatives -- have boosted support from non-financial companies, who now have an incentive to lobby for the bill.
The tax package included many popular provisions aiding not only businesses but upper-income households -- it would continue a fix to prevent millions of taxpayers from being subject to the dread Alternative Minimum Tax, for example. Yet not all of those provisions are paid for by spending cuts or new revenue -- something fiscal conservatives, including not only many Republicans, but also the so-called Blue Dog Democrats, detest.
At the same time, the various concessions to business and the right has many on the left, including union and consumer groups, hopping mad. "They've Christmas-treed this up for business," one lobbyist said before the Senate vote. They have been pushing for the House to add various measures to aid families, homeowners and municipalities in return, such as extending unemployment benefits, reviving a previously discarded provision to allow judges to modify mortgages in bankruptcy, or offering assistance to state and local governments. They hint that additional Democrats might bolt if these measures aren't taken.
House leaders have been scrambling to head off problems -- and resisting calls to add anything more to the bill for fear of bogging it down. A senior Democratic staffer says the Blue Dog Democrats are expected to support the measure on the grounds that their fiscal principles favor aiding the broader economy. And he says House leaders are likely to offer an extension of unemployment insurance with a separate bill -- that avoids another vote in the Senate to approve any changes to the financial-crisis measure; there's been no deal with Republicans to pass an unemployment measure, he adds.
A handful of public vote-switchers suggest the House leadership is having some success. Representatives Ileana Ros-Lehtinen (R-Fla.), Zach Wamp (R-Tenn.) and Emanuel Cleaver (D-Mo.) are among those reported by the Associated Press to be for the bill after being against it. They cited the tax-break additions and changes in public sentiment for their changes of heart.
"I hate to say it, but the Dow being down 300 [points] helps the vote count," says one well-connected Republican lobbyist from the manufacturing sector.
Moreover, with the election approaching, many incumbents in the House -- all of whom are up for re-election -- have another incentive. "Members want to get this issue over with," Ted Bornstein, a partner at Foley & Lardner, said in a telephone briefing Thursday morning. "It’s been hanging out there for two weeks, it’s been taking away from campaigning back home. I think they just want to get out of town."
Washington Bureau Chief Jane Sasseen and other BusinessWeek writers cover the run-up to the Nov. 4 presidential election, paying close attention to how the candidates will handle issues such as housing, the economy, unemployment, and immigration.