As if people needed one more reason to question their faith in Washington.
The colossal credit crisis shows the difficulty that US Democratic presidential candidate Barack Obama or Republican rival John McCain would face in fulfilling a pledge to change business-as-usual in this town.
Squabbling reached new heights this past week over US President George W. Bush’s proposed US$700 billion bailout — or “rescue plan,” as the White House likes to call it — of tottering banks and financial institutions holding devalued mortgages.
In public, Bush and the two men who want his job wore bipartisan hats, calling for a need to join hands to save the economy. It didn’t take long for the behind-the-scenes acrimony and political posturing to seep into the open.
The economy is on the precipice of what Bush warned could be a “deep and painful recession.” The presidential election is weeks away. A Republican revolt laid bare Bush’s waning relevance.
Through it all, Americans were not shy about their outrage.
E-mails to Representative Michael Burgess said: “This is madness to ask us, the taxpayers, to cover the liabilities of Wall Street. We are tired of being fleeced,” and “What a shame and disgrace to the US taxpayer and this country.”
McCain paused his campaign and flew to Washington to help broker a deal. He said he would not appear at a scheduled debate on Friday night with Obama unless that deal was reached beforehand.
After a 24-hour stay in Washington and no deal in sight, McCain flew to Mississippi anyway for the debate. Afterward, he returned to the capital and made calls on Saturday to negotiators, including Treasury Secretary Henry Paulson and fellow lawmakers.
McCain was the one who came up with the idea of having Bush host all sides at the White House. The White House assembled the meeting with a shrug, figuring it couldn’t hurt negotiations and might even help.
Everybody showed up and sat smiling in what appeared to be a show of unity around a shiny table in the West Wing. After all, hours before, key lawmakers said they had agreed in principle on a plan to unfreeze the credit markets by having the government buy up bad mortgage securities.
It started looking like the White House meeting could be a bipartisan backslapping session.
Lights, cameras. Bush spoke a few words. The press was ushered out. Then, in private, the discussion revealed deep discord.
The session broke up about an hour later in disarray. The McCain camp called it a “contentious shouting match.” What was intended to be a display of power brokers working together was anything but.
Democrats peppered House Republican leader John Boehner with questions about the details of an alternative plan he was backing.
At the end, according to two participants, Bush issued an appeal: “Can’t we just all go out and say things are OK?”
McCain, Obama and the congressional leaders spurned the request.
Witnesses said that afterward, Treasury Secretary Henry Paulson half-jokingly dropped to one knee and begged Democratic participants not to go before reporters, who waited in the rain on the West Wing driveway, and disclose how badly the meeting had gone.
In typical Washington style, both sides blamed each other for the breakdown in talks.
Democrats accused McCain of causing the impasse by injecting presidential politics into the negotiations.
“All of a sudden, now that we are on the verge of making a deal, John McCain airdrops himself to help us make the deal,” Democratic Representative Barney Frank said.
Republicans accused Democrats of rushing an “agreement in principle” before the White House meeting to deny McCain a chance to help seal the deal. One Republican gave McCain the credit for Thursday morning’s “agreement in principle.”
“They got something done this morning only because McCain came back,” Republican Senator Jim DeMint said.
Later, however, DeMint was still deriding Bush’s plan as “a trillion-dollar Band-Aid” that would not stimulate the economy.
White House counselor Ed Gillespie said the White House viewed the bailout ordeal as a delicate balancing act between stressing urgency while trying to avoid any perception that it was trying to railroad Congress into passing the massive package.
“We didn’t want to be seen as jamming Congress,” he said.
Bush made many statements on the financial crisis. But Gillespie said he waited a while before giving the televised address to the nation last Wednesday — 17 days after the government seized control of Fannie Mae and Freddie Mac, which together hold or guarantee about half the nation’s mortgages.
On Saturday, Bush used his radio address to allay the fears of people worried about their jobs, homes and shrinking retirement savings account balances. His soothing words, however, cannot erase the scene of disarray two days earlier.
Once a deal is made, memories of the messy sausage-making may fade. But sure to follow is a new blame game over which party was responsible for the crisis in the first place.
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