Signs of Progress
Spending their every waking hour on Capitol Hill trying to convince lawmakers to accept the financial bailout plan may finally be paying off for Treasury Secretary Paulson and Fed Chairman Bernanke. Reports coming out of meetings held this morning and early afternoon have been decidedly more upbeat than anything we have heard thus far.
In addition to testifying at hearings and briefing large groups, Paulson held a private meeting earlier with House Speaker Nancy Pelosi (D-CA) and Minority Leader John Boehner (R-OH). While aides would not confirm whether the leaders and Paulson struck an agreement, there are signs the administration has made changes to the Paulson plan. In his House Banking Committee testimony this afternoon, close watchers noted that Paulson modified his remarks to allow for a compromise on limiting executive compensation as long as it does not "undermine the effectiveness of the program."
The White House is taking nothing for granted, however, and the president will address the nation tonight at 9:01 p.m. EDT. We expect the president will explain the “Main Street” ramifications of not adopting the Treasury plan to bailout Wall Street.
In a surprising development, Republican presidential nominee John McCain called for a suspension of this Friday’s first presidential debate in order for the candidates to focus on the financial crisis in Washington. McCain released a sobering economic statement and urged President Bush to “convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself.”
Sen. Obama, at a late afternoon press conference, told reporters that he and Sen. McCain had agreed earlier to release a joint statement. McCain’s own separate announcement took Obama by surprise. Obama dismissed the suggestion to postpone the presidential debate. Putting heated politics aside, Obama agreed the financial situation is very serious and the following four conditions must be included in the final package: 1. an independent oversight board; 2. taxpayer protection – an equity share in firms assisted; 3. immediate homeowner assistance; and 4. executive compensation limits. According to Sen. Schumer (D-NY), the Congress and the administration have reached an agreement on numbers 1 and 3 but are still working on numbers 2 and 4.
