Leaders of both parties in the House, but particularly Republicans, were whipping hard to line up votes Monday for a massive financial bailout bill worked out with the Bush administration over the weekend.
Administration officials and the party’s presidential nominee, Sen. John McCain of Arizona, joined in the effort to garner a majority of Republicans behind the plan — as demanded by Democratic leaders who don’t want their own members left vulnerable.
But there was significant push-back from conservative Republicans, especially some in the Republican Study Committee (RSC), who started pushing an alternative proposal.
“No solid whip numbers are out yet. People are talking about each side putting up about half the votes. They are comparing it to a congressional pay raise vote,” a senior GOP aide said Monday morning.
“It’s very hard. Both parties are working as hard they can. It’s not popular. We need 218 votes,” said a senior House Democratic aide, referring to a bare majority of the 435-member House.
Just how hard was evident early Monday. After the House had disposed of its other business and was preparing to tackled the bailout package (HR 3997), Rep. Louie Gohmert, R-Texas, forced a vote on a motion to adjourn “so we don’t do this terrible thing to America.”
Rep. Mike Pence of Indiana, a leading member of the influential Republican Study Committee, on Sunday said in a statement: “Republicans improved this bill but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it.”
Pence was urging his GOP colleagues, “If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions.”
House Minority Whip Roy Blunt, R-Mo., who represented his caucus in the marathon weekend negotiations that produced the final bill, said on CNN that Pence’s advice was “not helpful.”
Rep. Todd Tiahrt, R-Kan., said it would be difficult to deliver a majority of the party’s House members for the deal as Speaker Nancy Pelosi, D-Calif., had demanded.
But later, as GOP lawmakers were caucusing, aides say Eric Cantor, R-Va., the chief deputy whip, and Paul D. Ryan, R-Wis., ranking Republican on the Budget Committee, pushed hard for “yes” votes. “This sucks that we are in this position. But we have to do this to save the free enterprise system,” Ryan told members, according to a participant.
Blunt said he hoped a large number of Republicans would support the measure. “We’ll do everything we can to make sure members of both parties in substantial numbers vote for this bill,” Blunt said.
“Everybody’s unhappy about it,” he told CNN on Monday morning. “I think the alternative is what our members have to think about.”
The White House joined the lobbying campaign with a letter from Budget Director Jim Nussle to House Minority Leader John A. Boehner, R-Ohio, down playing the plan’s cost to taxpayers. Boehner’s office released a similar letter from the non-partisan Congressional Budget Office.
“No one knows just how much these assets will sell for, but since 90 percent of mortgages are currently being paid on time and in full, we can expect a substantial payback on our investment,” Nussle wrote. “In some cases, if a mortgage asset is purchased at a deep discount from its face value, the taxpayer may even see a positive return on that investment.”
CBO echoed that view.
“Although it is not currently possible to quantify the net budget impact given the lack of details about how the program would be implemented, CBO has concluded that enacting the bill would likely entail some net budget cost–which would, however, be substantially smaller than $700 billion,” reads the letter from CBO to leaders of the House Budget and Financial Services committees.
Leaning on Republicans More than 180 of the 199 House Republicans attended an unusually long closed-door meeting Sunday — unusual, because only half of the conference normally shows up at the party’s weekly private meetings.
The leaders spoke for almost an hour. According to attendees, Boehner kicked off the program by recounting the fractious White House meeting on the issue Sept. 25, when House Republican leaders, backed by GOP presidential candidate Sen. John McCain, demanded that negotiators consider alternatives to the bailout plan if Congress was going to fork over $700 billion to stave off a financial crisis.
One participant described the tone of the conference as “respectful, but negative.”
Blunt declined to give the results of a survey taken in the caucus meeting. Members filled out white cards bearing their names and five choices: yes, no, lean yes, lean no and undecided. Aides said a more rigorous whip count was continuing.
Boehner said McCain “has been making calls to members in support of this bill.”
A leading Democratic skeptic also suggested problems for the plan on his side of the aisle.
“If this is called for a vote on Monday, it’s very hard to predict,” said Rep. Brad Sherman, D-Calif., who drew some 35 Democrats to a meeting of what he dubbed the “Skeptics Caucus.”
But lawmakers belonging to the 49-member Blue Dog Coalition of conservative Democrats said they were pleased the draft legislation included a provision intended to raise money from companies that participate in the program if its full cost is not recouped within five years.
Rep. Jim Cooper, D-Tenn., said he plans to vote for the bill, warning that if Congress does not act the consequences for the economy will be dire.
“It’s not everyday you get a chance to save your country,” he said. “This may be one of those chances, nobody knows for sure.”
Majority Whip James E. Clyburn, D-S.C., said he was not sure how the bill would fare, but was not overly concerned about Democratic defections.
“It’s good to be skeptical about this. If anybody was sure about what we were doing, we wouldn’t be having all these discussions,” he said.
RSC Alternative Rep. Jeb Hensarling of Texas, chairman of the 106-member Republican Study Committee., said, “I am not whipping this bill. But I believe the bulk of our members will be opposing it.”
Pence insisted, “There are alternatives to massive government spending.”
RSC critics of the bailout bill focused on an alternative proposal by William Issac, a former chairman of the Federal Deposit Insurance Corp. who served during the savings and loan crisis of the 1980s under President Ronald Reagan. Isaac suggested that Congress let the FDIC take the major role in dealing with troubled banks and helping them refinance or get rid of troubled investments.
An email circulated by RSC staff provided highlights of Isaac’s plan. The RSC summary said that Isaac wanted Congress to approve a “net worth certificate” similar to what was enacted in the 1980s for the saving s and loan industry.
The plan would allow the FDIC to purchase net worth certificates in troubled banks it things can be viable if give more time, perhaps five years. At the end of that period the bank would have to repay the notes issued by the FDIC.
The plan also called for suspending mark-to-market accounting rules that require companies to list their assets at current market value, something that is difficult to determine for many mortgage-backed securities.
And it would continue a newly implement Securities and Exchange Commission curb on short-selling of stocks.