Portfolio.com: Capital

Blago's Lowball

Matt Cooper — Thu, 11 Dec 2008 21:46:31 GMT

Among the crazier things about the Rod Blogojevich scandal is the penny ante quality of it.

After all, all the cursing and alleged bribing and carrying on was about trying to get a job that pays $250,000 a year or more. I'm sorry, but did I miss something? I thought the outgoing governor of a major state, one who had served in Congress, could make that without even trying. Has the recession gotten that bad?

At times, according to the indictment, Blagojevich was seeking a slew of arrangements for himself and his wife that could have added up to much more than that -- maybe more on the order of half a million a year. But that still seems eminently doable without resorting to selling the president-elect's senate seat.

I know we're in a recession and lots of outgoing pols will find themselves looking for work. But a Democrat like Blagojevich, even one under an ethical cloud, should have been able to find something more lucrative, yes?

Bernie Kerik has work, after having to bail out of the Homeland Security nomination and even while he awaits trial. Other sullied pols have found work. Mark Foley's in Palm Beach in the real estate business. Surely someone in Chicago would have found something for the departing gov and if not there than in D.C. where his reputation was less sullied.

There are so many questions about this case but one will surely be why Blagojevich allegedly aimed so low. Speaking of which, how do you get charged with these kinds of crimes and get off on less than $5,000 bail?

Dear Governor Blagojevich

Matt Cooper — Tue, 09 Dec 2008 20:38:58 GMT

Dear Governor Blagojevich:

I know you've had a long day.

Apparently, federal agents showed up at your house to arrest you at 6 a.m. for trying to sell Barack Obama's senate seat to the highest bidder.

You're probably wondering what to do. I have some advice.

Back in 2004, I had a rather infamous run-in with Patrick Fitzgerald, the U.S. Attorney in Chicago who has taken such a keen interest in you. He was also, of course, appointed special prosecutor in the CIA leak case. I remember well because I was in his sights once, too.

I had written an article for Time.com called, "A War on Wilson?" in which I tried to point out the scurrilous rumors that Bush administration officials were putting out about former Ambassador Joseph Wilson and his wife, Valerie Plame Wilson. Fitzgerald wanted to know who leaked the identity of Wilson's wife, a CIA agent, and he subpoenaed me to testify. I refused and so did my employer, Time Inc.

A court battle ensued that went all the way to the Supreme Court. After one of my sources, Karl Rove, released me from the bonds of confidentiality, I testified, narrowly escaping jail for contempt of court.

Being from Chicago you know that Fitzy, as his friends like to call him, is notoriously tough and single-minded. He's married now but I'm sure the son of Irish immigrants is still a workaholic, and having convicted what seems like half of Chicago (along with the likes of Scooter Libby and Conrad Black), I don't think he's slacking off just because a new president is coming in. I'm sure you know about how tough he is.

I don't think Fitzgerald is a cruel man. He could have put my big white butt in jail as soon as the first federal judge laughed my case out of court. But he didn't. He waited for me to make all my appeals to the Supreme Court, which meant putting his incredibly high-profile case on hold for a year. A vengeful prosecutor wouldn't have done that.

(I think a wiser one wouldn't have gone after me to be a witness in what was essentially a perjury case in the first place, but that's another matter.)

The point here is I don't think you're dealing with a modern-day Javert or some loon. He's a hard ass, but a reasonable one and I think, if you believe you are guilty and are going to lose at trial, you might get a decent deal out of this. Sure, you'll have to do time but you're a relatively young guy. Fitz will deal.

You're definitely better off dealing now. Whoever inherits the case from Fitzgerald can't afford to be seen as going light on you. It's bad enough you (allegedly) tried to sell a Senate seat but it's the president's seat, for gosh sakes. Obama's Justice Department is gonna be even tougher on you. It can't afford not to be.

And even if it was inclined to show any mercy, do you think Rahm would sit idly by? He took your seat in the House and you know him well. I don't have to tell you that you're better off dealing with the Crips and Bloods than with a pissed off Rahm.

You wanna deal with Fitzgerald directly, you and him. When I became a government witness, he interviewed me alone and knew the details of my case better than I did. He doesn't rely on a phalanx of aides, although he has them. He knows the case and will make the decisions himself.

As I discovered in my prison research, there's really no such thing as a country club prison any more. Even minimum-security facilities like the one I wanted to go to in Cumberalnd, Maryland, aren't fun. They're crowded, filled with check kiters and drug dealers and other folks you don't want to share a bunk with.

But you won't get shanked there or raped and you'll be able to get through your time. That's if you get a sentence that's less than seven years. Anything longer and you'll have to go to a tougher federal lockup.

I'd shoot for the minimum security and seven years in prison. You can argue that you won't really be safe in anything tougher and that argument might appeal to Fitzy.

Contrition is key here. This is a guy who went to the best parochial school in New York and like those tough Jesuits who taught him, he can smell a liar. If you beg for mercy, you might get it. (Of course, if this is all a big misunderstanding and you were just shooting the bull with your pals, then, hey, fight like hell.)

One thing I would not do is appoint yourself or someone to the Senate while you still can. It might be tempting to name yourself a Senator on the same day you get indicted but the Senate surely won't seat you and you'll only inflame Fitzgerald. I'd tell him and the public sooner rather than later that because of the controversy you're not going to name anyone.

Our situations are different, of course. I was never accused of a criminal act, only of being a reluctant witness. But I think I know Fitzgerald a bit and I think you can cut a deal.

Best of luck!

Sincerely,

Matthew Cooper

The Mystery of President Obama

Matt Cooper — Wed, 05 Nov 2008 04:01:21 GMT

Barack Obama speaks to supporters and the nation following his victory. Photo by Daniel Acker/Bloomberg News/Landov.

On January 20, Barack Obama will be sworn in as the 44th president of the United States. And like Franklin Delano Roosevelt did as he took the White House while facing the Depression, he'll have to make it up as he goes.

The nation should know before Obama replaces George W. Bush much more of what he plans to do for the economy and business. Sure, there are his myriad campaign proposals—like raising the top income-tax rate and capital gains and dividend taxes on the wealthiest earners, or taking a new approach to trade agreements that emphasizes labor and environmental standards. But this promises to be a transition like no other, or at least unlike any other since 1932, when that economic crisis dominated the transfer of power.

First off, watch to see who Obama picks to be his Treasury secretary and who will fill the top economic jobs in the White House. You don't need to be a genius to picture Austan Goolsbee, the interesting University of Chicago economist, heading the Council of Economic Advisers. And you can imagine Jason Furman, who has been Obama's main point man on economics, heading the National Economic Council, a position filled by Bob Rubin and then Gene Sperling in Bill Clinton's two terms.

Treasury Secretary will be interesting, to say the least. The person clearly needs to be someone Wall Street—that's an antiquated term since there are no more investment banks—trusts, or at least doesn't fear. But it can't be someone who helped to get us into this mess. So I wouldn't look for Lloyd Blankfein or John Mack or Jamie Dimon to be signing the dollar bill anytime soon. Tim Geithner would seem like a solid bet. The head of the Federal Reserve Bank of New York has street cred, and he hasn't been seen as being part of the problem. But you could make a case that he was part of the slow Bush-administration response to the mess. Geithner would send a centrist signal to the markets and trading partners.

My favorite candidate would be Michael Bloomberg. Obama could talk the billionaire mayor out of running for a third term, making the case that, while he's needed in New York, he's in greater demand in Washington. Bloomberg has market cred and isn't part of the problem. Plus, he'd give Obama a valuable Republican-Independent appointment to the cabinet.

The other interesting proposition floating around is who runs the TARP (Troubled Assets Relief Program) after Neel Kashkari leaves. Will there be a special rescue czar, and could Obama persuade, say, Warren Buffett to take the gig for one year?

In many ways, the questions of how Obama will actually lead are greater now that he's president elect than they were when he was simply a presidential candidate. And the truth is, we don't really know what direction the Obama economic plan will take given the realities of the market crash. Will he remain as committed to deficit reduction? Will he veer left? Or will the left be wildly disappointed?

So to get one sense of where the future is headed, look to the past. I just finished Jonathan Alter's The Defining Moment, his account of F.D.R.'s 100 days. One is reminded of how much of the New Deal was improvised and unplanned, and how tensions were high between Roosevelt's diverse advisers. F.D.R. had, after all, run opposing Herbert Hoover's profligate spending and promising a balanced budget. But he also promised "bold, persistent experimentation" and that's what the United States got in plans ranging from the Civilian Conservation Corps to the genuinely socialistic National Recovery Administration. There was also a wholesale remaking of the nation's monetary structure including the formation of banking insurance under the F.D.I.C. and the Securities and Exchange Commission, run by Joseph P. Kennedy. F.D.R. was wise enough to know that a speculator like Kennedy would be best to run an agency devoted to regulating speculation. Hopefully Obama's bugaboo about lobbyists—he wouldn't take their money during the campaign—won't keep him from appointing some of the smart ones.

America's financial architecture is about to be remade and the shadow banking system—hedge funds and mortgage lenders, private equity and credit-default swaps—are all about to be brought under federal supervision. It's just a matter of what kind of regulations emerge from the ashes of the old Wall Street. This is where Obama likely will move at his briskest pace, rather than with things like health care, which is slow and cumbersome and fraught with political peril. (See Clinton, Hillary Rodham.) At this point, after the passage of the SCHIP that George W. Bush vetoed, the one that provides more health insurance for children of working families, Obama has a very tough road. But on financial regulation, he has something where he can declare victory relatively quickly and at relatively little cost.

But it's really all a mystery. Back in 2000, if you were predicting the Bush years, you would have bet on a humble foreign policy and no presidential interest in nation building. You would have looked at Bush's friendly relations with the Democratically controlled Texas legislature and predicted a period of bipartisan bonhomie. Obviously things turned out differently. Times change, and so do candidates when they become president. Right now, it's worth holding on to hope because it may prove to be, with President Obama, as with so many others, quite fleeting.

Matt Cooper

Will Obama Really Raise Taxes?

Marisa Rindone — Thu, 30 Oct 2008 04:00:01 GMT

Photo of Senator Barack Obama by Eric Thayer/ Rapport.

You have to admire the flexibility of conservatives. They love the free market, until there's a massive government bailout of banks. They say you can't possibly raise taxes when the economy is bad. But when the economy is good, they say you can't raise them either, and really you have to cut them. In 2000, George W. Bush argued for tax cuts because of the surplus, saying that taxpayers were being overcharged.

As Tuesday's election approaches, lots of conservatives are freaked out that Barack Obama is going to win big and then raise taxes, which they predict will make the economy much worse. It's true that raising taxes in a recession not only goes against conservative philosophy, but the basic tenets of Keynesian economics that says you should cut taxes and spend more in a recession. So what will Obama do? Will he continue with his plans to raise income taxes on wealthier Americans and small businesses earning more than $250,000 annually, coupled with a cut for lower-income earners? Will he raise capital-gains taxes on wealthier earners?

My bet is that he's going to have to modify his plans slightly. Whatever majority he garners should he win, it's not going to be one that's eager to hike taxes. Bill Clinton had almost 60 Senate Democrats in 1993 and barely got his tax hikes through. I'm not sure it's going to be that much easier this time, even with a bevy of Democrats. Of course, Obama just has to let the Bush tax cuts expire, but since he wants to keep them in place for lower-income workers, he still has to pass something. Watch for the top tax rate to go up a tad, but any increase in capital gains taxes are a harder sell. There's going to be too much market volatility and too much organized interest against those hikes.

Part of the reason that Obama should be willing to abandon some of the tax hikes is not that he'll cut spending, but because no one is really that concerned with a deficit that could rise to $1 trillion this year. Fighting the deficit is totally out of fashion at the moment, so why should Obama stick by pay-as-you-go rules when everyone else is flooding the economy with borrowed money? I suspect Democrats are tired of the now familiar pattern where Republicans run up the deficit, then Democrats come in and clean it up, and then Republicans return promising tax cuts. Why not just be a borrow-and-spend Democrat instead of a tax-and-spend one? Surrounded by the likes of Paul Volcker, Jason Furman, Gene Sperling, and others, he won't totally throw caution to the wind. But he'll find some of his tax hikes less appealing when he gets into office.

Flip-flopping is derided in modern politics. But flexibility is not always a sin. Franklin Roosevelt famously ran for president promising a balanced budget and decrying Herbert Hoover's deficits. He obviously changed his mind in office and built the New Deal as an improvisational riff, promising "action" above all else and "bold, persistent" experimentation.

I'm not entirely sure what Obama will do in office. But while John McCain tries to portray him as eager to raise taxes more than he said he would, my guess is just the opposite will happen. He'll close loopholes, coax the top income tax rate up a bit, but not go on a wholesale hike in taxes. Bill Clinton was elected promising a middle-class tax cut and quickly abandoned it after being elected. Obama won't make that mistake. He'll keep those cuts and find the money somewhere else, even if he has to borrow it.

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.

How McCain Could Have Won

Matt Cooper — Thu, 23 Oct 2008 04:00:01 GMT

Photo of Arizona Senator John McCain by Christopher Morris/VII.

In less than two weeks, Barack Obama will be the president elect. Maybe I'm wrong and John McCain will defy all the polls and all the gloomy Republicans who portray him as doomed, but I don't think so. What I wonder is this: Did it have to be this way? Was McCain doomed, or could different decisions along the way have changed things?

It was always going to be a tough year for Republicans. It's hard to follow a party that's been in office for eight years with another term. And the economy meant that George W. Bush was a particularly weighty albatross. But as recently as September, this was a close race. Now it's barely one, as the polls are breaking clearly in Obama's favor.. So what could the Arizona senator have done differently?

The Wrong Veep. According to press reports, McCain wanted to pick former Pennsylvania Governor Tom Ridge or independent Connecticut Senator Joe Lieberman, but was convinced by his aides that nominating a pro-choice vice presidential candidate would irreparably divide the G.O.P. and lead to a floor fight at the Republican National Convention in St. Paul. The aides were right, but a floor fight is precisely what McCain, in retrospect, needed to prove he wasn't Bush. Sure, Obama would have continued to tar him with the current president's economic policies, but a floor fight would have made it clear in the most dramatic way possible that he was not a typical Republican. While many on the left regard Lieberman as a pariah, for most Americans he's still Al Gore's running mate in 2000 and his selection would have been dramatic--the first time a nominee of one party had become the nominee of another. For his part, Ridge might have actually made Pennsylvania competitive.

The best thing that either man could claim is that he's not Sarah Palin, who though tremendously popular with the base has dragged down the ticket. Pluralities of Americans say she's not qualified, and in the latest NBC News/Wall Street Journal poll it's her presence on the ticket that's most often cited as a reason not to vote for McCain, ahead of McCain continuing Bush's economic policies.

John Kerry hasn't made much of a secret that he regrets picking John Edwards as his running mate. Even before this year's infidelity scandal, Edwards proved a dud when he ran with Kerry in 2004. He added no votes to the ticket, moved the dial not an inch in his home state of North Carolina, lost his debate to Dick Cheney, and gave a mediocre speech at the convention. But Kerry was talked into Edwards by his aides. A better nominee would have resisted that. The same could be said for John McCain.

The Economic Crisis. It's now clear that McCain's response to the economic crisis has only made his situation worse. Far from being seen as a steady hand at the tiller, he's come across as out of touch and erratic, as Colin Powell implied in his endorsement of Obama. Had McCain avoided calling the fundamentals of the economy strong, he would have saved himself a lot of grief. And the gambit of suspending his campaign, only to restart it, looked absurd.

McCain's sudden announcement during the second debate that he wanted to buy underwater mortgages looked desperate. His claim that Obama's policies were socialist was absurd, coming just days after the Bush administration dropped close to a trillion dollars buying corporate assets and stock. Had McCain rejected the bailout, he probably would have led to its defeat and the market would have tanked even more, so that wouldn't have served him politically. But if he had simply stuck to one theme--don't raise taxes in a recession--he might have gotten somewhere. Instead, he veered off into the absurd cul de sac of William Ayers and ACORN and domestic terrorism, which I'm sure tested off the charts with the base, but as anyone knows, this is not a base year.

The Three Threats. McCain could have based his campaign on the idea that there are three dire and existential threats to the United States: terrorism, global warming, and financial ruin. And then made the case he's the man to meet all three. He could have made it much more clear that he believes in global warming and knows how to stop it. That would have helped with swing voters. He could have repeatedly said that he knows how to stop terrorism and Obama doesn't. And he could have made it clear that no one is better equipped to control and manage the size of the government.

I'm not sure any of this would have worked. But it would have been true to who McCain is and it probably wouldn't have been any worse with where he will almost assuredly end up, back in the senate voting against President Obama's proposals.

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.Related Links
Vote, Baby, Vote
The Biden-Palin Panderfest
Idle Chatter: Debate Ratings; 'Star-Ledger' Saved

Joe the Plumber's 19 Days

Matt Cooper — Thu, 16 Oct 2008 04:15:36 GMT

Barack Obama and John McCain sit during the final 2008 presidential debate with moderator Bob Schieffer. Photo by Charles Dharapak-Pool/Getty Images.

We're going to be seeing a lot of Joe the Plumber for the next 19 days.

The real life guy, Joe Wurzelbacher, made news the other day by questioning Barack Obama on his plan to hike taxes for those earning more than $250,000 a year. It was a good gambit by John McCain to bring him up, and he kept Obama on the defensive for the first part of their debate, the last of this presidential cycle.

McCain's "I'm-not-Bush" line was pretty good, reminiscent of Hillary Clinton's "I'm-not-Bill" line from the Democratic debates. But the Arizona senator veered off track when he got away from the economy. The Ayers-John Lewis-ACORN gambit fell flat, and Obama was able to diminish McCain by making him seem like he was aching about hurt feelings at a time when people are really hurting. Also, McCain's obvious seething probably didn't help as did his dismissive tone towards women's health on the issue of late term abortions.

I would love to have seen some more in-depth questions about the bailout. How do you feel about the federal government owning banks? Didn't the whole buy poisoned assets approach turn out to be a bomb? What do we do to stabilize the markets? On the day when the Dow drops 700-plus points, there should have been more about the markets and how to stabilize them.

Once again, the focus groups and instant polls showed Obama coming out ahead which is why the Ayers-ACORN thing seemed so ill-fitting, so 1988. This is not a year like that when you could kill Michael Dukakis on the Pledge of Allegience.

People care about one big thing and that's the economy. Even Iraq feels more distant. (I think it was the first debate without McCain praising General David Petraeus.) McCain has a case to make on the nation's financial health. I don't buy it, but at least it's an honest argument about taxation and spending. Anytime McCain got off a legitimate economic argument, it hurt him. I can't believe Joe the Plumber really cares about Bill Ayers.

Obama's mien, as has often been remarked, is so steady and unflappable it just seems hard to link him to 60s bomb throwers. McCain's got reason to be frustrated. He does have a more bipartisan record than Obama; he has bucked his party often; and he's getting whacked through an association with George W. Bush that's been strained at best. That's unfair, but it's the way it is and why McCain will likely be in the Senate come January and Obama will be in the Oval Office.

As for Joe the Plumber, it's true that Obama will raise his taxes back to Clinton-era levels. The question is whether that's going to clobber him to such a degree that he doesn't start his new business. My guess is that the difference between 36 and 39 percent won't be decisive. And if his customers have a little more dough in their pockets from tax cuts, that will help.

McCain tried to skew the argument by saying that more than half the revenue from small businesses comes from those making more than $250,000. But of course the vast majority of small businesses don't earn that much. Besides, any marginal difference in tax rates won't matter unless we get the markets stabilized and the economy moving.

My guess is that Joe Wurzelbacher will vote for McCain, but most of America's other Joes are going with Obama.

Barack Obama answers a question from plumber Joe Wurzelbacher in Holland, Ohio, Oct. 12. Photo by Jae C. Hong/AP

Matt Cooper

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.Related Links
It's a Small-Business World
It's Not Working
Where's the C.E.O. Love?

McCain's Insane Mortgage Proposal

Matt Cooper — Wed, 08 Oct 2008 03:49:12 GMT

Well, John McCain didn't waste any time. In response to the first question of the second presidential debate, the Arizonan offered to buy back any mortgage in America that's worth more than the value of the home.

Since maybe as many as 40 percent of the homes in America may be under water--that is, the mortgage is worth more than the home--that's quite a tall order, one that makes the $700 billion bailout/rescue plan look like bubkes. It's a stunning nationalization of mortgages, wild in its cost and implications and somewhat bizarre coming from someone who had tried to pare back Fannie Mae and Freddie Mac. I suspect in the coming days McCain will dial back the plan because it was so outlandishly expensive and such a federal intrusion into the market--not that we're still worrying about that.

What it shows is that McCain isn't too old to be president; he's offering a lot of evidence that he's too adolescent. He's impetuous, imprudent. This latest proposal is as wild as the debate-canceling threat from a couple of weeks ago. I think we're getting a vision of the McCain presidency that's akin to Elvis firing up the Lisa Marie and taking his posse cross country for peanut butter and banana sandwiches. Every week would be an adventure.

That said, I thought McCain did pretty well. He was punchy, alert. Obama struck me as a bit more laconic than usual. He seemed tired and made a number of verbal miscues, the most notable was his whipping Delaware as the state with lax banking regulations. D'oh! You knew he regretted dissing his veep's home state as soon as he said it. He also credited the federal government with coming up with the computer; he meant the Internet.

Still, Obama's very good at connecting up policy with real people anecdotes, nowhere more powerfully than when he repeated the anecdote about his mother dealing with insurance companies while she lay dying of cancer.

On a day when the Dow tested new lows, it was remarkable that neither candidate has a (sensible) plan to stabilize the markets now, and both continue to offer promises as if none of this had happened.

McCain is still offering huge tax cuts and Obama continues pushing aggressive spending. Do you really think 95 percent of Americans will get a tax cut under President Obama? I sincerely doubt it. Will there be a President Obama? He crushed in the immediate post debate polls despite McCain's latest gambit. After tonight, it's starting to look more and more that way.

Matt Cooper

Photo caption: Democratic presidential candidate Sen. Barack Obama speaks during the Town Hall Presidential Debate with Republican presidential candidate John McCain at Belmont University's Curb Event Center October 7, 2008 in Nashville, Tennessee. Photo by Mark Wilson/Getty Images.

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.Related Links
Larry Summers
Obama's Economic Tour
The Age of Obama

The Keating Connection

Matt Cooper — Mon, 06 Oct 2008 16:25:36 GMT

J. Jennings Moss reports: Remember Charles Keating? Barack Obama's presidential campaign hopes so. But just in case you don't, the campaign today released a 13-minute online documentary about the poster child for the savings and loan crisis of nearly 20 years ago, and of John McCain's involvement in it.

The video, "Keating Economics: John McCain and the Making of a Financial Crisis", was posted on a special minisite, KeatingEconomics.com, shortly after noon EDT.

"The point of the film and the web site is that John McCain still hasn't learned his lesson," Obama campaign manager David Plouffe said in email to supporters. "And this time, McCain's bankrupt economic philosophy has put our economy at the brink of collapse and put millions of Americans at risk of losing their homes."

The video gives a primer on the failure of Lincoln Savings and Loan, the tactics of its chairman, Charles Keating, and the role played by five U.S. senators: Alan Cranston, Dennis DeConcini, John Glenn, Donald Reigle, and John McCain. All but McCain were Democrats. The Senate Ethics Committee determined that McCain's role was minimal and cleared the charges against him.

"The McCain campaign has tried to avoid talking about the scandal, but with so many parallels to the current crisis, McCain's Keating history is relevant and voters deserve to know the facts -- and see for themselves the pattern of poor judgment by John McCain," Plouffe wrote.

It's surprising that it's taken the Obama campaign this long to slam McCain over his ties to Keating. Last month, Bob Rice laid out in Portfolio.com how Keating might be used against McCain, but he also questioned whether Obama would go after him on the topic.

"Maybe the Democrats ... remind the public of McCain's role in the last debacle, and hang him with three labels at once: hypocritical old insider. But with a Hypermodernist on the other side of the board, I wouldn't bet on it," Rice wrote.

A search on John McCain's site brings up six references to a Keating, but it's not that Keating. It's former Oklahoma Governor Frank Keating, a national co-chairman of the McCain campaign.

J. Jennings Moss

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.

House Backs Bailout

Matt Cooper — Fri, 03 Oct 2008 17:27:50 GMT

The House of Representatives, which on Monday rejected a bipartisan bailout plan for Wall Street, today reversed course and backed a modified version of the measure by a vote of 263-171. The Senate approved the plan on Wednesday.

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.

Second Time a Charm, or a Curse?

Matt Cooper — Fri, 03 Oct 2008 15:44:15 GMT

J. Jennings Moss writes: No one said getting the House to change its mind about the Wall Street bailout plan was going to be easy, but leaders of both parties thought going into today that they'd pull it out. It might end up being a very long day.

According to John Carney at Clusterstock.com, the vote is likely to be delayed for hours to allow for more arm twisting. President Bush, depicted just about everywhere this week as a practically forgotten lame duck, might even make a personal appearance on Capitol Hill to lobby for it. As Carney describes it:

The situation on Capitol Hill is rapidly deteriorating. Some of the turned Democratic votes are said to be contingent on the Republicans getting more votes out of their caucus. The fiscally conservative Blue Dog Democrats are considering a revolt. House Speaker Nancy Pelosi is screaming at people, trying to restore order but only adding to the feeling of panic.

It's difficult to predict how it will all go down. Some media outlets are quoting lawmakers who voted against the plan Monday as now being in favor of it. One of those, Republican Representative Zach Wamp of Tennessee, predicted the votes were probably there for passage. He told reporters at least 12 Republicans and eight Democrats who were in opposition now are supporting the measure.

"The time has come to act," Wamp told Fox News. "If we do not go on the wall, it will be an ugly day in America."

But others said they weren't budging.

"I am a firmer 'no,' " the New York Times quoted Representative Joe Barton, Republican of Texas, as saying. "I don't want to see the debt ceiling increased on $1 trillion with no way to pay for it."

J. Jennings Moss

Get a daily fix of how politicians, business leaders, and others in the news are faring with the Portfolio.com Capital Index.