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Political will

It’s easy to blame the House Republicans for the failure of the $700 billion bailout bill today, but the Washington Post’s Chris Cillizza has the real story:

The data suggest that this bill was far from a political winner for members of Congress set to face voters in 36 days.

And, for vulnerable Republicans who believe that the free-spending attitude of Congress and the Bush Administration was either partially or primarily responsible for their ouster from majorities in the House and the Senate in 2006, the idea of floating the federal government another $700 billion was simply unpalatable.

It’s no coincidence then that of the 205 Members who voted in support of the bill today, there is only one — Rep. Chris Shays (R-Conn.) — who finds himself in a difficult reelection race this fall. The list of the 228 “nays” reads like a virtual target list for the two parties.

There’s only one person in Congress who was willing to justify their vote to approve in this political climate. The truth is that there’s nobody in Washington who wants to pass a bill like this, and the fact that only lame ducks and legislators in safe seats are willing to come out and support it tells me that it may very well be awful tasting medicine that we really do need.

Update: FiveThirtyEight has a more detailed breakdown. The “competitive district” effect is not as pronounced as Cillizza makes it sound.

Update 2: It should also be noted for the sake of completeness that Republicans voted two to one against the bill, over the beseeching of the Majority Leader, President, and their Presidential candidate. 60% of Democrats voted for the bill.

18 Comments

  1. I was really quite shocked at Pelosi’s speech prior to the vote. I really can’t fathom why the Speaker of the House would go on the attack like this when she had to know that every Republican vote was needed. Regardless of the truthfulness of what she says, did she need to say it? I honestly wonder if there were any Republicans on the fence that she just pushed into the “No” category.

    http://www.youtube.com/watch?v=ey3ZlsmIkz4

  2. Her speech may have been ill advised, but if anyone voted “no” in a fit of pique at her speech, they’re not deserving of their seat in Congress, and I’d say that about either side. Either this is an issue of great consequence or it isn’t. If it isn’t, vote “no”. If it is, and you think the bill is the best shot at fixing it, vote “yes”.

  3. Rafe, I agree.

    I’m amazed that the bill was even brought to a vote without the knowledge that it would pass or not. Or perhaps I feel sorry for the folks who were keeping track of the “Yes” votes prior to the vote being called.

    I certainly never expected a vote on this to fail.

  4. The problem with this current crisis is that it’s complicated, and the average American barely understands there are 3 branches of government, let alone liquidity problems in the credit markets. I would like to see a lot of progressive things in the bailout, but the main thing is that something happens to get credit going again. This is NOT about the stock market, although if the credit markets keep frozen, it certainly will manifest itself in a stock market crash, as it partially did with today’s 777 point loss.

    If you’re a member of Congress, and you don’t understand that what’s at issue here is the future of this entire country for several generations, then you don’t belong in the Congress. If you DO undersand that, and you get “offended” by Pelosi’s speech, so much so that you decide to “punish” her by changing your vote — well then you don’t belong in Congress either.

    I don’t mind people who voted against this bill for principled reasons — that’s part of the democratic process. But to use Pelosi’s speech as a justification for the way ANYONE voted is poppycock and pathetic rubbish.

  5. Which is what Barney Frank says here:

    http://talkingpointsmemo.com/archives/220689.php

  6. According to NPR this morning, voters were calling the capital switchboard overwhelmingly against. Ultimately, with something this unpopular, perhaps the “will of the people” should prevail (after all it is our debt being spent) and the government should look to an alternative that might work better. There’s no shortage of them floating about.

    Personally, I’m glad it failed. I believe a lot more time and thinking should go into spending $700B (even if it ends up being this bill). Paulson and cronies spent all of 3 days and congress spent another week. No one can say whether it will help or whether it’s necessary. Almost every provision has a loophole that lets the Executive do whatever it wants.

    I don’t trust Paulson and Bush to look out for us. I think all Paulson sees is Wall Street and he believes what’s good for the street is good for us no matter how much it costs. After all, it’s just more borrowed money that someone else will have to pay someday.

    Bush, of course, has no clue.

  7. Guys like Brad DeLong and Paul Krugman are for the bill too, though. What does Barney Frank have to gain by giving this money to Bush to spend? I imagine that not even 1% of the people in America could tell you what a credit default swap even is. How can they weight the pros and cons of this bailout plan. It’s not as though they’ve weight the alternatives and think there’s a better solution.

  8. I happen to be in the banking business (on the credit union side), and I can tell you for a fact that the credit crisis is not a manufactured one. It is real.

    Unfortunately, the White House and everyone else has marketed this as a “bailout”. This raises everyone’s hackles, on the left and the right. The left can’t forget how Bush lied about WMD; the far right would be content to see the country go into a Depression for the sake of their beloved “free market.”

    Yes, the Great Depression led to 30 years of Democratic rule. But it also wiped out millions of people. Democrats need to think long and hard about whether they really want to saddle Obama, assuming he wins, with a Depression or an incredibly deep recession.

  9. Thinking about it for half a second should be enough for anyone. I don’t think that a depression or severe recession is a means to any good end.

  10. I do think some sort of bailout plan is necessary.

    I just think the failed one had huge downside risks (almost certainties), with negligible upside. It would almost certainly not do what was hoped, but would almost certainly make things worse.

    It would’ve been like putting $700 billion into a black hole, never to be seen again. Likely, it would’ve only inflated the commodities markets a bit.

    A real plan would look something like this:

    http://www.michaelalanmiller.com/?p=814

  11. No Republicans were needed to pass the vote. There are enough Democrats in the House to pass the legislation, with zero Republican support.

    Obama and Pelosi did not influence ‘loyal’ Democrats to support the bill.

  12. I was initially against any kind of bailout but as I learned more about it, I realized some kind of Federal assistance is needed. Unfortunately, I am not the typical American, educating myself, and then coming to an opinion. I am pretty certain the majority of Americans basically saw the bailout plan as a $700 billon wallet lightening and proceeded to call the Representatives in droves without becoming more informed about the issue. I blame Paulson and the Bush Administration for this, because they tried to yet again quickly slam another bill through Congress by using the tactics of fear to gain compliance.

  13. Don’t be naive, Anon. Nobody wants to take the political heat for passing this bailout bill, so the Democrats and Republicans cut a deal. “You bring X number of votes, we bring Y number of votes, the bill passes and nobody gets to demagogue it.”

    Either the Republicans intentionally sabotaged the bill or their whip count was way way off when the measure came up for a vote.

  14. Rafe, except for the fact the Pelosi was already “demagoguing” before the bill was even passed. Anyone who thinks (Pelosi included) that this crisis is ONLY a result of the past 7 years of Bush policies and a Republican run Congress for a few of those years is sadly out of touch with reality. This has been building since at least the late 90’s and likely longer than that.

    To try and make political hay with a deal on the line is extremely irresponsible for someone who is two heartbeats away from the Presidency.

    As I said, I agree with you that if someone changed their vote because of Pelosi (and not their feelings on the bill) is very irresponsible.

    I think it was a bit of both, I think the Whip was off and some Republicans changed late.

    That said, if this is as important as both sides claim, why do you even allow folks to vote no? Isn’t that just as irresponsible? Wouldn’t a 400-35 AYE vote be more assuring to the nation than a 250-185 AYE vote? Why take the risk? So those in tight races can play politics with the issue?

    The whole deal stinks and how both parties are dealing with it stinks. Heck, on the morning news there was a D on that talked about how it was all the Rs fault and that we need to quit placing blame and being partisan. Huh? Pot, Kettle.

  15. I think it’s very bad luck for America that the whole thing came crashing down two months before a Presidential election. The political implications are in the immediate future, and there’s no way they don’t come into play.

    I think it’s telling that retiring House members voted for the measure 23-2.

  16. I agree that Paulsen and Bush are mostly to blame for this debacle. They tried their typical “Shock Doctrine” tactics, and it didn’t work this time.

    But the mess in our credit markets really is the result of laissez faire capitalism, and its champion, Ronald Reagan. Now we are seeing the bankrupt result of a bankrupt philosophy.

    The idea that the bill failed because people were upset at Pelosi’s speech is so preposterous it’s almost laughable.

    The bill failed, IMO, because:

    1) it was marketed as a bailout. Paulsen went to Congress in a panic because the credit markets froze. THAT is the real problem. And today, the credit markets are still frozen. There were a couple of days last week when people were willing to take a return of LESS than zero percent on TBills! Think about that. Anyone who thinks the credit markets can stay frozen without having a disastrous impact on the economy as a whole is either uninformed or a demagogue.

    2) Because of the initial errors in describing the crisis, Joe Citizen thinks the $700 billion is going straight into the pockets of those who created the crisis. Under Paulsen’t initial plan, that might have been true, but much of that was changed.

    3) The Democrats delivered 2/3 of their caucus. It would have been political suicide for them to deliver any more votes without at least 50% of the Republicans. If you don’t believe that, take a look at the ad the RNC sent out to TV stations before the bill failed. It castigates Obama for voting for the bill ! The Republicans are far more concerned about turning this into a “win” for their party than they are about getting the country going again. That’s not to say that some Dems aren’t politicking as well, but the numbers on the vote speak for themselves.

  17. It’s very depressing.

    Once the “rescue” is law, there will be no more leverage. The street will crank up again and go back to business as usual. Sure, the MBS game is over, but a new game will start. CDS is too big a game to be stopped. No underlying causes will be fixed because without an overwhelming crisis, money will talk again.

    The time to do something fundamental is now. What we need is leadership, but there is little to be found. If you tune out the government, the street, and the MSM you can just make out a few lone voices in the wilderness with ideas, but no seat at the table.

    We’ll, of course, squander the chance. They’ve already “temporarily” caved on mark-to-market accounting rules (so the unreasonably low valuations can now be unreasonably high again). Who thinks that won’t be permanent?

    They’re saying, stop the bleeding and fix the causes later. But there will be no later. Any more than there was after the S&L “rescue”. The country will simply be $1-2T further in the hole.

  18. “That said, if this is as important as both sides claim, why do you even allow folks to vote no? Isn’t that just as irresponsible? Wouldn’t a 400-35 AYE vote be more assuring to the nation than a 250-185 AYE vote? Why take the risk? So those in tight races can play politics with the issue?”

    Shall we just suspend the Constitution because those trying to sell the bill couldn’t get 50% to vote for it?

    Surely 435-0 would have been even more assuring to the nation.

    One wonders why we even bother with this inconvenient voting thing anyway.

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