Loading ...But Mr President…who’s Fault is this ?…are you taking the blame ?
DJ Bush Pitches Bailout With Bleak Portrait Of US Economy
By Henry J. Pulizzi
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–Warning that the U.S. is “in the midst of a serious
financial crisis,” President George W. Bush painted a dire portrait of an
economy at risk of a “long and painful recession” to convince a skeptical
public that his $700 billion rescue plan is essential. “Our entire economy is
in danger,” Bush said in a prime time address to the nation Wednesday night,
his most stark comments to date on the meltdown consuming world financial
markets.
“Without immediate action by Congress, America could slip into a financial
panic and a distressing scenario would unfold,” Bush said. “More banks could
fail, including some in your community. The stock market would drop even more,
which would reduce the value of your retirement account.”
The president’s appeal comes as the administration continues its high stakes
effort to convince taxpayers and lawmakers in both parties that the bailout
needs to be wrapped up quickly to avert economic catastrophe.
Both presidential candidates and Congressional leaders from both parties will
meet Bush at the White House Thursday to continue the push for legislation. Top
lawmakers say their round-the-clock negotiations are now bearing fruit, with
both parties agreeing that changes to the $700 billion proposal are necessary.
“Working in a bipartisan manner, we have made progress,” House Speaker Nancy
Pelosi, D-Calif., and House Republican Leader John Boehner, R-Ohio, said in a
rare joint statement.
Bush said there is “widespread agreement” on the principles of the bailout
package, including the need to protect taxpayers and ensure that failed
executives don’t receive a windfall at taxpayers’ expense. He also said the
measure should create a bipartisan oversight board.
Lawmakers have been slow to embrace the rescue amid public doubts over its
necessity and the perception that it would simply provide a lifeline for Wall
Street firms and wealthy bankers. According to the latest Wall Street
Journal/NBC News poll, 33% of voters disapprove of the plan, while 31% approve
of it and 28% have no opinion.
In that environment, Democrats have pushed for Bush to take his case to the
public.
“There are a lot of people out there who still don’t understand why it is
necessary to do anything,” Rep. Mel Watt, D-N.C., said Wednesday at a House
Financial Services Committee hearing. “President (Bush) has to tell the
American people enough to justify why we are doing anything.”
Bush acknowledged Americans’ questions, and used much of his remarks to
detail the origins of the situation and the consequences of inaction. He said
massive money flows into the U.S., easy access to credit, and poor
decision-making led to the housing boom and the securitization of mortgages.
“The decline in the housing market set off a domino effect across our
economy,” Bush said.
Under normal circumstances, Bush said he wouldn’t endorse government
intervention in financial markets.
“These are not normal circumstances,” he said. “The market is not functioning
properly. There has been a widespread loss of confidence and major sectors of
America’s financial system are at risk of shutting down.”
The bailout debate seeped further into the political landscape Wednesday,
after Republican presidential nominee Sen. John McCain, R-Ariz., said he would
suspend his campaign to focus on the economic crisis. McCain also called for
the presidential debate scheduled for Friday to be postponed, an idea his
Democratic rival, Sen. Barack Obama, D-Ill., rejected.
Late Wednesday, the McCain and Obama campaigns issued a joint statement
calling for bipartisan cooperation.
“The plan that has been submitted to Congress by the Bush Administration is
flawed, but the effort to protect the American economy must not fail,” the
campaigns said.
Top Democrats in the House and Senate hope to craft a single bill to move in
concert through both chambers. Senate Banking Chairman Christopher Dodd,
D-Conn., met with House Financial Services Chairman Barney Frank, D-Mass.,
Wednesday to work on the legislation. Time is short, however, with Congress
hoping to adjourn soon for the November elections and financial markets
desperate for clarity.
Frank, sending a crucial signal to markets, said progress is being made. “I
hope we’ll have something by tomorrow,” Frank said.
The final measure will not look like the brief bill drafted by the Treasury
Department last week. Horse trading over a series of Democratic priorities is
ongoing, and the administration appear to have made some critical concessions.
Treasury Secretary Henry Paulson conceded Wednesday that executive
compensation - a top concern of Democrats - will be dealt with in the bill. He
was short on specifics.
“We must find a way to address (executive compensation) in the legislation
but without undermining the effectiveness of the legislation,” Paulson told the
House Financial Services Committee.
Other questions surround the potential for the government to take ownership
positions in participating banks and the size of the program, specifically
whether the authority to buy bad debt will come in a $700 billion lump sum or
smaller increments.
“These equity stakes will make sure that taxpayers are paid back,” said Rep.
Dennis Moore, D-Kan.
Paulson, in his second straight day of Congressional testimony, said he
welcomes oversight over the program, and stressed the plan wouldn’t only be
available to big institutions but to community banks, savings and loans and
credit unions as well. Paulson said he envisions hundreds and even thousands of
institutions participating in the programs.
Democrats have been sharply critical of Bush’s performance during the crisis,
accusing the president of staying behind closed doors while Paulson leads the
administration’s lobbying effort.
“Up until now, if you were not a constitutional scholar and therefore aware
that there was in America an institution known as the presidency, you would not
have been able to discern it from the last couple weeks,” Frank said Wednesday.
“He has given no evidence of his existence in the last couple weeks.”
The White House rejects that criticism, pointing to a number of public
statements Bush has made over the past week.
