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The Blow-by-Blow on Bailout Deal-Making

If you're looking to follow all the latest developments on the Hill as negotiations proceed on a financial sector bailout -- as wells as news updates about the rapidly unfolding economic crisis and Wall Street moves -- click here for the Financial Desk's moment-by-moment coverage. See also this story, "House Republicans Rejoin Talks on Bailout Plan."

By Web Politics Editor  |  September 26, 2008; 3:29 PM ET
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Comments

Posted by: thecannula | September 27, 2008 11:38 AM | Report abuse

My mama always taught me; every choice has consequences.

It is time for Americans, namely those who voted GW Bush into the White HOuse TWICE.... take some personal responsibility for making a really bad decision with severe consequences which is playing out disastrously for this country.

We are claiming indignation for this bail out justifiably so however, your choice for President MATTERS as he steers the course for this country. Bush steered us into a dismal abyss.... If we do not learn from the errors of our past, rest assured we are doomed to repeat them. John McCain's voting record aligns 90% of the time with Bush... need I say more?

Bottom line, our indignation with this bailout ought to give us some clarity in who should be the next President... changing course or re-instate the same policies as the last 8 years.

Our choices do have consequences and we have to take our share of responsibility for the choices we make and that includes this bailout.

Posted by: nerakami | September 27, 2008 11:03 AM | Report abuse

From the Heritage Foundation-
Text of the ACORN Related Provision in Bailout Bill
Posted September 26th, 2008 at 3.43pm in Entrepreneurship.
By popular demand we are posting the text of the provision in the House bailout bill that requires Treasury to divert 20% of all profits away from taxpayers and to left-wing advocacy groups like the Association of Community Organizations for Reform Now (ACORN).

SEC. 105. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; REVENUES AND SALE PROCEEDS.

(d) TRANSFER OF A PERCENTAGE OF PROFITS.—
(1) DEPOSITS.—Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
(2) USE OF DEPOSITS.—Of the amount referred to in paragraph (1)—
(A) 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
(B) 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).

************

The Holy Grail for ACORN has been the establishment of a National Housing Trust Fund. During the brief economic downturn in 2001, ACORN pushed the fund as an economic stimulus. From 2003 through 2006 it pushed the fund as a solution to housing prices that were too high. Now liberals in Congress have included the National Housing Trust Fund in the latest housing bailout bill, arguing it’s needed because housing prices are too low.

In 2006, liberals in Congress held much-needed reform of Freddie Mac and Fannie Mae hostage in exchange for the creation of ACORN’s permanent housing slush fund.

Posted by: thecannula | September 27, 2008 8:16 AM | Report abuse

Today's Washington Post

"When Sen. John McCain made his way to the Capitol office of House Minority Leader John A. Boehner (R-Ohio) just past noon on Thursday, he intended to "just touch gloves" with House Republican leaders, according to one congressional aide, and get ready for the afternoon bailout summit at the White House.

Instead, Rep. Paul D. Ryan (Wis.), the ranking Republican on the House Budget Committee, was waiting to give him an earful. The $700 billion Wall Street rescue, as laid out by Treasury Secretary Henry M. Paulson Jr., was never going to fly with House Republicans, Ryan said. The plan had to be fundamentally reworked, relying instead on a new program of mortgage insurance paid not by the taxpayers but by the banking industry.

McCain listened, then, with Sen. Lindsey O. Graham (S.C.), he burst into the Senate Republican policy luncheon. Over a Tex-Mex buffet, Sens. Robert F. Bennett (Utah) and Judd Gregg (N.H.) had been explaining the contours of a deal just reached. House Republicans were not buying it. Then McCain spoke.


"I appreciate what you've done here, but I'm not going to sign on to a deal just to sign the deal," McCain told the gathering, according to Graham and confirmed by multiple Senate GOP aides. "Just like Iraq, I'm not afraid to go it alone if I need to."

For a moment, as Graham described it, "you could hear a pin drop. It was just unbelievable." Then pandemonium. By the time the meeting broke up, the agreement touted just hours before -- one that Sen. Lamar Alexander (Tenn.), the No. 3 GOP leader, estimated would be supported by more than 40 Senate Republicans -- was in shambles.

An incendiary mix of presidential politics, delicate dealmaking and market instability played out Thursday in a tableau of high drama, with $700 billion and the U.S. economy possibly in the balance. McCain's presence was only one of the complicating factors. Sen. Barack Obama played his part, with a hectoring performance behind closed doors at the White House. And a brewing House Republican leadership fight helped scramble allegiances in the GOP.

It is unclear whether the day's events will prove to be historically significant or a mere political sideshow. If the administration and lawmakers forge an agreement largely along the lines of the deal they had reached before McCain's arrival Thursday, the tumult will have been a momentary speed bump. If the deal collapses, the recriminations spawned that day will be fierce.

But if a final deal incorporates House Republican principles while leaning most heavily on the accord between the administration, House Democrats and Senate Republicans, all sides will be able to claim some credit -- even if the legislation is not popular with voters.

"If there is a deal with the House involved, it's because of John McCain," Graham, one of the Arizonan's closest friends in the Senate, said yesterday.

In truth, McCain's dramatic announcement Wednesday that he would suspend his campaign and come to Washington for the bailout talks had wide repercussions.

Democrats, eager to reach a deal before McCain could claim credit, hunkered down and made real progress ahead of his arrival. Conservative Republicans in the House reacted as well, according to aides who were part of the talks.

The Republican Study Committee, an enclave of House conservatives, had already begun turning against the Paulson plan. When McCain announced his return, the conservatives feared he would forge an agreement largely along Paulson's lines, with slight alterations and the GOP leadership's blessing. "

****************

Whether a better, worse, or no deal is reached, clearly McCain is responsible. Once again, he's taking a chance in the interest of his country. Let's hope it works out as well as the surge did.

Posted by: thecannula | September 27, 2008 8:01 AM | Report abuse

What are those two stooges Pelosi and Frank saying? We, the Democrat-led do nothing Congress pledge to bail out the Wall Street on the back of working taxpayers of the USA. We, the Democrats support our President George W. Bush fully and unconditionally. Do you smell fish here? Are they desperate to rescue their stock portfolios just like Secretary Paulson? Apparently, Sen. McCain is to blame for all of it. How convenient that Sen. Obama has been missing in action.

Posted by: Wiel | September 26, 2008 8:05 PM | Report abuse

Here is the "ACORN" link... Apparently ACORN gets funding from the HTF mentioned below.

This is the text from TITLE I - Authorizing the Treasury Department to Buy Mortgage-Related Assets

"USE OF DEPOSITS.Of the amount referred to in paragraph (1)

1. 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and

2. 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569)."

http://publicmarkup.org/bill/dodds-legislative-proposal-treasury-department-aut/1/5/

Posted by: nowanna3 | September 26, 2008 7:15 PM | Report abuse

I wish someone could link to where the bill specifically gives ACORN 20% of the bailout money.

I just don't see it.

Posted by: info42 | September 26, 2008 6:48 PM | Report abuse

Word is that Dodd and Obama have added a 20% subsidy for ACORN. Obama was their lawyer at one time.

ACORN is a former legal client of Senator Obama's, as the Sun-Times reported in 2006:

In 1995, former Republican Gov. Jim Edgar refused to implement the federal "Motor Voter" law, which was argued could invite fraud.

The law mandated people be allowed to register to vote in government offices such as driver's license renewal centers.

Obama sued on behalf of ACORN, the Association of Community Organizations for Reform Now. The League of Women Voters and other public-interest groups joined in.

"He and his client were the ones who filed the original case -- they blazed the trail," said Paul Mollica, who represented the League. Voter fraud? From a Chicago Machine politician? I'm shocked. Actually I think the Chicago Machine needs to be praised. Jesus brought a few people back from the dead. Jesus himself is reported to have come back from the dead. But the Chicago Machine is special. They bring tens of thousands back from the dead. No wonder they hail ∅bama as The One.

It seems the Obama campaign has rather close ties to ACORN. Did Sen. Barack Obama's campaign attempt to hide a paid working relationship with a radical leftist organization that has admitted to major financial improprieties and has been convicted in numerous major voter fraud scandals?

In July 2007, ACORN settled what was described by the Washington Secretary of State as the "largest case of voter fraud in the state's history." Government prosecutors had filed felony charges against seven ACORN workers, who ended up receiving jail time.

Senior Deputy Prosecuting Attorney Stephen Hobbs said in the case the workers had admitted filling out registration forms with names they found in phone books. The ACORN canvassers filled out the forms while sitting around a table at the downtown Seattle Public Library, Hobbs said.

ACORN was also investigated in 2006 for submitting false voter registrations in St. Louis. Nearly 1,500 fraudulent voter registrations were identified in the case, which was tied to at least one campaign, that of Sen. Claire McCaskill, D-Mo. Four ACORN workers were indicted in the case.

Also in 2006, four part-time ACORN employees were indicted in Kansas City, Mo., for voter-registration fraud after being caught, fired and turned in by ACORN.

In January 2005, two Colorado ACORN workers were sentenced to community service for submitting false voter registrations.

In Ohio in 2004, four ACORN employees were indicted by a federal grand jury for submitting false voter-registration forms.

ACORN has been accused in multiple other voter fraud cases in other states. Some investigations are still pending.

Posted by: Cornell1984 | September 26, 2008 6:16 PM | Report abuse

I'm an old retired guy who doesn’t have to work and I can honestly say it won't matter to me in the long run who wins this election. At my age any election I participate in could be my last. I do believe however that the current administration has been the worst in my lifetime (born during FDR). I don't think anyone can rationally deny that. We have had 8 years of corruption, unnecessary war and shredding of the Constitution. Over the weekend we reached the highest unemployment rate in 5 years and the deregulated Fannie Mae and Freddie Mac had to be rescued by the taxpayers before they collapsed of their own accord. Now this party wants us to give them 4 more years so that John the "maverick" can fix Washington. ...like I was born yesterday.

If "small town working class" rust-belt voters and disgruntled Clinonistas in Ohio, Pa., Michigan and Indiana help re-elect the GOP then I for one don't want to hear anymore whining from them about their disappearing jobs and livelihoods, the high cost of college and gas, lack of health care etc. Let Johnnie's "patriotism" put food on your table. Go flip burghers!

Screw 'ya. Cling to your guns and religion. Pray to Jesus when you go hunting for a meal. Stay with that church and keep your weapon. You will need both the soup kitchen and the rifle. You will deserve what you get.

I got mine already. I live comfortably in the sunny South on a golf course in a paid for house, got my steady income, my "socialist" medicare and prescription drug coverage that you younger people wish you had but will never get under the Republicans. I sent my girls to college and they are successfully out on their own. The world won't run out of gas before I go and the planet won't get too hot.

A McCain election ain't gonna hurt me!

As Johnny Carson used to say - I upped my lifestyle - up yours!

God helps those who help themselves - if you're in deep doodoo economically and you vote Republican for their "values", you deserve it.

Posted by: toritto | September 26, 2008 5:47 PM | Report abuse

Don't fall for everything you hear or read please:
McCain did not ride into D.C. on a white horse to save the day
He did not even suspend his campaign
Sarah Palin isn't even a hockey mom (god is ANYTHING true about this woman?)

Posted by: JRM2 | September 26, 2008 5:16 PM | Report abuse

As we enter the polling booth ... it is simple ... we forget the SPIN and remember the last 8 years ... I think as an Indepenedent the Democrats showed great respect to the office of the President by approving his initiatives at guiding them into a War in Iraq and in no small irony the Wall Street Bail Out. This Administration sunk Hillary Clinton's chances at being President by the deception and poor judgment getting into the war. And, we see the same thing being attempted by this recent crisis of mis-management ... Suck the Democrat into a hole that the Bush Administration has created. The subprime loans and mortgages and easy borrowing was like paying for votes in the 2004 elections. Are we better off that we were 8 years ago? The answer is NO NO NO ... let the Republicans SPIN SPIN SPIN. The American people are not fools.

Posted by: amitchell13 | September 26, 2008 5:15 PM | Report abuse

"It is clear that McCain met with Republicans and put together a coalition that will force a BETTER bill to protect Main Street, "
Posted by: MarkInAustin | September 26, 2008 3:46 PM |
----
I sure hope you're right because word on the hill is there was a bipartisan deal in place until McCain hit town, met with Boehner and then at the presidential meeting with Obama things degenerated. Up until that point McCain had ZERO input and during the meeting he did not say a word for forty minutes until Obama called on him where he just gave some non-commital answers. Apparently he spent 90min. in D.C.

Sounds to me like his purpose for going there was to stall the deal, he had nothing to add.

So, I hope your right because it would be kind of ironic that McCain would put "Me First".

Posted by: JRM2 | September 26, 2008 5:14 PM | Report abuse

Another "psychological" example (from the link above): The U.S. Mint had to temporarily halt sales of its American Buffalo 24-carat gold coins because "inventories have been depleted," the Mint said.

The Mint can't keep up with demand from panicky investors looking for something -- anything -- that seems safe during the current crisis.

The price of gold has soared in recent weeks, topping $920 per ounce briefly today as concerns rose over the passage of the $700 billion Wall Street bailout and subsequent fears about a stock market drop.

At Goldprice.org, which tracks dealer prices for gold, consumers can still buy a 1 ounce gold buffalo nickel for prices ranging from $917.50 to $1,115.00, but not at the Mint.

Posted by: MarkInAustin | September 26, 2008 4:31 PM | Report abuse

A $16.7 billion run on Washington Mutual, only to put that in some other bank, is "psychological" definition.

Posted by: MarkInAustin | September 26, 2008 4:08 PM | Report abuse

McCain in April declared that there had been "great progress economically" during the Bush years. On more than one occasion, he diagnosed Americans' concerns over the dismal U.S. economy as "psychological." (Phil Gramm, the man who helped McCain deregulate Wall Street and McCain's close friend and adviser supposedly excommunicated over his "whiners" remarks, is back with the campaign.) McCain, a man who owns eight homes nationwide, in March lectured Americans facing foreclosure that they ought to be "doing what is necessary -- working a second job, skipping a vacation, and managing their budgets -- to make their payments on time." And when all else fails, McCain told the people of the economically devastated regions in Martin County, Kentucky and Youngstown, Ohio, there's always eBay.


In his defense, McCain's shocking tone-deafness may just be a matter of perspective. When you're as well off as he is, anything below a $5 million income (a figure exceeding that earned on average by the top 0.1% of Americans) seems middle class.


*The $100 Million Man*
Courtesy of his wife Cindy's beer distribution fortune (one her late father apparently chose not to share with her half-sister Kathleen), the McCains are worth well over $100 million. (In the two-page tax summary she eventually released to the public, Cindy McCain reported another $6 million in 2006.) As Salon reported back in 2000, the second Mrs. McCain's millions were essential in launching her husband's political career. Unsurprisingly, the Weekly Standard's Matthew Continetti, who four years ago called Theresa Heinz-Kerry a "sugar mommy," has been silent on the topic of Cindy McCain.


*The Joys of (Eight) Home Ownership*
While fellow adulterer John Edwards was pilloried for his mansion, John McCain's eight homes around the country have received little notice or criticism. His properties include a 10 acre lake-side Sedona estate, euphemistically called a "cabin" by the McCain campaign, and a home featured in Architectural Digest. The one featuring "remote control window coverings" was recently put up for sale. Still, their formidable resources did not prevent the McCains from failing to pay taxes on a tony La Jolla, California condo used by Cindy's aged aunt.


*The Anheuser-Busch Windfall*
As it turns out, the beauty of globalization is in the eye of the beholder. While John McCain apparently played a critical role in facilitating DHL's takeover of Airborne (and with it, the looming loss of 8,000 jobs in Wilmington, Ohio), Cindy McCain is set to earn a staggering multi-million dollar pay-day from the acquisition of Anheuser-Busch by the Belgian beverage giant, In Bev. As the Wall Street Journal reported in July, Mrs. McCain runs the third largest Anheuser-Busch distributorship in the nation, and owns between $2.5 and $5 million in the company's stock. Amazingly, while Missouri's politicians of both parties lined up to try to block the sale, John McCain held a fundraiser in the Show Me State even as the In Bev deal was being finalized.


*McCain's $370,000 Personal Tax Break*
Earlier this year, the Center for American Progress analyzed John McCain's tax proposals. The conclusion? McCain's plan is radically more regressive than even that of President Bush, delivering 58% of its benefits to the wealthiest 1% of American taxpayers. McCain's born-again support for the Bush tax cuts has one additional bonus for Mr. Straight Talk: the McCains would save an estimated $373,000 a year.


*Paying Off $225,000 Credit Card Debt - Priceless*
That massive windfall from his own tax plan will come in handy for John McCain. As was reported in June, the McCains were carrying over $225,000 in credit card debt. The American Express card - don't leave your homes without it.


*Charity Begins at Home*
As Harpers documented earlier this year, the McCains are true believers in the old saying that charity begins at home:
.
Between 2001 and 2006, McCain contributed roughly $950,000 to [their] foundation. That accounted for all of its listed income other than for $100 that came from an anonymous donor. During that same period, the McCain foundation made contributions of roughly $1.6 million. More than $500,000 went to his kids' private schools, most of which was donated when his children were attending those institutions. So McCain apparently received major tax deductions for supporting elite schools attended by his children.
.
Ironically, the McCain campaign last week blasted Barack Obama for having attended a private school in Hawaii on scholarship. That attack came just weeks after John McCain held an event at his old prep school, Episcopal High, an institution where fees now top $38,000 a year.


*Private Jet Setters*
As the New York Times detailed back in April, John McCain enjoyed the use of his wife's private jet for his campaign, courtesy of election law loopholes he helped craft. Despite the controversy, McCain continued to use Cindy's corporate jet. For her part, Cindy McCain says that even with skyrocketing fuel costs, "in Arizona the only way to get around the state is by small private plane."


*Help on the Homefront*
In these tough economic times, the McCains are able to stretch their household budget. As the AP reported in April, "McCain reported paying $136,572 in wages to household employees in 2007. Aides say the McCains pay for a caretaker for a cabin in Sedona, Ariz., child care for their teenage daughter, and a personal assistant for Cindy McCain."


*Well-Heeled in $520 Shoes*
If clothes make the man, then John McCain has it made. As Huffington Post noted in July, "He has worn a pair of $520 black leather Ferragamo shoes on every recent campaign stop - from a news conference with the Dalai Lama to a supermarket visit in Bethlehem, PA." It is altogether fitting that McCain wore the golden loafers during a golf outing with President George H.W. Bush in which he rode around in cart displaying the sign, "Property of Bush #41. Hands Off."


Here's some more Mavericky Straight-Talk, my friends:
.
http://www.youtube.com/watch?v=YxT0s_I5WtA
.

Posted by: DrainYou | September 26, 2008 4:03 PM | Report abuse

MarkInAustin,

We are all entitled to our opinion no matter how misguided it might be. Sorry, in my opinion it was such a Top Gun, all about me move which backfired in his face. He had nothing to add but contentiousness.

Posted by: wes1155 | September 26, 2008 3:56 PM | Report abuse

It is clear that McCain met with Republicans and put together a coalition that will force a BETTER bill to protect Main Street, not just Wall Street. Whether you think that is a "concrete" action, or not, he did exactly what he set out to do. In my opinion, McCain he took the right action to address this crisis. The following is from his statement Wednesday:

"It has become clear that no consensus has developed to support the Administration’s proposal. I do not believe that the plan on the table will pass as it currently stands, and we are running out of time.

Tomorrow morning, I will suspend my campaign and return to Washington after speaking at the Clinton Global Initiative. I have spoken to Senator Obama and informed him of my decision and have asked him to join me.

I am calling on the President to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself. It is time for both parties to come together to solve this problem.

We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved. I am directing my campaign to work with the Obama campaign and the commission on presidential debates to delay Friday night’s debate until we have taken action to address this crisis."

Posted by: MarkInAustin | September 26, 2008 3:46 PM | Report abuse

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