Just one day after the news from the nation’s capital was full of talk of resistance from both parties to a quick passage of the Hanke-Panke Bailout Bill, we now hear word from a powerful Democratic committee chair that the bailout is “almost a done deal.” How’d that happen?
Congressman Paul Kanjorski, a Democrat who hails from Pennsylvania and heads the crucial House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, told CNBC’s SquawkBox that “most everything everyone is asking for as a condition to put this together has already been agreed to and is in the bill.”
We’ll get to exactly what’s in the bill once we’ve had a chance to read it. For now, let’s concentrate on what Capitol Hill sources are telling us was the crucial move that flipped all the right switches—the President’s address to the nation last night.
To answer your first question: yes, Congress watched the same speech as the rest of us. If you didn’t find it terribly persuasive, that’s because you aren’t thinking like a Congressman. It was a creditable performance, especially given the verbal ineptitude of our president. He even managed to say “mortgage backed securities” without sounding too much like he was speaking in a foreign tongue. And you had to admire the way he kind of blamed all the foreign money sneaking into the United States for causing the housing bubble. But he presented no new information, no compelling case for why the plan would work or even a concrete explanation for how it would work.
What won Congress over was something other than the rhetorical or informational content of the speech. It was the speech itself. Democrats had been afraid to pass the bill over Republican opposition, for fear that the Republicans would turn around and label them big spenders subsidizing Wall Street. Republicans saw little advantage in voting for a bill that would pass without them, and a glimmer of political hope from opposing it.
“Bush supplied Congress with what it wanted to pass this bill: CYA currency,” a source in Washington tells us.
The president’s speech was a game-changer, supplying Democrats with the political cover to support the bill without fear of Republican reprisals. Republicans, knowing that the president’s speech had now put their party on the line for the bill, saw the hope of political gain from opposition to the bill wither and die. The moment the president took to that familiar podium, everything changed.
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