On assignment in Southern California to cover the Republican State Convention, I stayed in touch with Republican lawmakers on Capitol Hill. The tension surrounding the Administration’s proposed $700 billion bailout of financial institutions continued to rise, and news of where Congress stood on the controversial measure was an evolving story.
The latest word from Washington was that a number of House Republicans were beginning to shift from uncompromising opposition to the package to enough support that there could be a vote by the House as early as Sunday or as late as Thursday.
“We’ll work though the weekend and possibly be done on Sunday,” Rep. George Radanovich (R.-Calif.) told me on Friday. After joshing that I was “the smart one” for being in his home state instead of Washington, Radanovich gave me the latest word on where the financial bailout package that had collapsed at the White House on Thursday was actually alive and could be voted on as early as Sunday. Another House Republican said that Congress “would adjourn for the Rosh Hashanah holiday Monday and return and probably vote on the package Thursday.”
“Apparently, what happened at the White House was that John McCain and [House Republican Leader] John Boehner got the point across that they could not pass this without Republican input,” added Radanovich. The California lawmaker explained that reports in today’s New York Times and other publications of the “collapse” of a bailout deal were because “John McCain supported John Boehner in telling the President to ‘listen to us [Republicans].’”
Although the Times’ Adam Nagourney and Elisabeth Bumiller cited sources as saying that McCain “sat silently for more than 40 minutes, more observer than leader” at the White House meeting, Radanovich told me that he and his colleagues got quite another impression from participants at the White House conclave. In his words, McCain was “ringing the alarm bell” and letting the President and other Administration leaders know “we felt they were not listening to us and counting us in.”
Throughout the week, several Republican House members had cited their resentment over the Administration continually coming to them after it had met with and worked out details of financial rescue packages with House Banking Committee Chairman Barney Frank (D.-Mass.) and other Democratic leaders. Many Republican House members also, for the most part, gave low marks to Secretary of the Treasury Hank Paulson at their closed-door meeting with the House GOP Caucus Wednesday for coming to them after dealing with Frank and other Democratic leaders.
This afternoon, sources on Capitol Hill told me there was a memorandum from the House GOP leadership sent out to Republican House Members that spelled out principles that Boehner and Company want in any financial assistance package. These reportedly include greater transparency and market reform and a bigger role by Wall Street rather than the taxpayers on the repayment of toxic mortgages.
When I asked Radanovich if scrapping the Community Reinvestment Act — the measure that virtually forces banks to lend to lower-income communities and has been blamed for much of the subprime crisis — would be included in the final package, he said “No, but bringing CRA up-to-date is a likely step.”
There are, of course, Republican House members who will vote against any bailout that includes tax dollars. Rep. Walter Jones (R.-N.C.), a member of the House Banking Committee, told me that “if this were financed 100% by Wall Street and not by the taxpayers, okay, that’s another story. But we are getting into something that is just not the role of government.”
Jones also said that his mail was “running 65% to 70% for ‘no’ to the bailout.”
But it was also clear that many conservatives in the House who had been adamantly opposed to the bailout presented by Paulson were beginning to take a second look. Rep. John Shadegg (R.-Ariz.), for example, issued a statement saying he was “cautiously optimistic” about a new package and praised McCain’s role in the changed circumstances.
“I just wish the White House had met with us in the first place,” said George Radanovich.