Looks like a deal was never in the offing, Pelosi is the one who needed John McCain in Washington most of all, and Obama has stayed in Washington too long to say they didn’t really need him.
Gory details, and implications for tonight’s debate, below the break.
House Republicans, feeling trapped on three sides by Treasury, the Pelosi Democrats, and a Senate coalition, brought an alternative plan to the White House summit that they said does not rely on “nationalizing bad mortgages” to prop up Wall Street. This was most upsetting to SecTreas Paulson, Sen. Harry Reid, and especially Speaker Pelosi, who was reluctant to agree to anything without Republican cover (House Democrats are already struggling in the polls, and they don’t want to be left holding the bag if this thing goes south). The House GOP’s dissent here illustrates the fundamental difference in nature between the House and Senate: House equals contentious argument, Senate equals deliberative compromise. Yes, we do need at least some of each.
Republican cover was exactly the reason why John McCain was summoned to Washington; Paulson, Reid, and Pelosi surmised (not unreasonably) that McCain was the only one who could deliver the House GOP. What nobody saw coming was that John McCain wouldn’t try to woo them over to a compromise with Treasury and the Democrats, but rather the other way around. McCain didn’t endorse any plan, but was adamant that there were elements of the House GOP plan that covered crucial shortcomings in the Treasury/Democrat plan. What apparently touched this off was, as the McCain campaign tells it, was when the Democrats pretty much handed over their negotiation power to Barack Obama, letting him speak for them (to my knowledge, no one on the Obama campaign has countered this account). Letting Sen. Obama run their show caused much indignation in everyone else at the meeting, and the whole summit devolved into a “shouting match,” my nominee for the most popular metaphor in the news during the last twelve hours. Sen. McCain decided that the Treasury plan didn’t have “the confidence of the American people” (no lie there), and House GOP support remained out of reach. Ergo, no deal, and Dems point the finger GOP-ward.
According to NRO’s Yuval Levin, who cites his own Capitol sources:
McCain was apparently a very active participant in the White House discussion, while Obama expressed his support for the general frame of the draft put together by the House and Senate Banking Committees but did not go beyond that. The Democrats did not expect to be presented with additional ideas beyond that draft, and left the meeting decidedly unhappy.
Meanwhile, Barack Obama is still there. He hasn’t left Washington yet, although there is a plane ready to take him down to Mississippi for debate prep within the hour. However, if he does leave this morning, there will be the question as to why. Given how active he was in last night’s summit, and given also that the same negotiations are still ongoing, how will he explain running off in the middle of them? By coming to Washington and taking a prominent role in negotiations, he has tacitly conceded that he was indeed needed there (trumping his own “call me if you need me” attitude taken in response to McCain’s campaign suspension). How can he say he’s not needed anymore, and that he (and by implication McCain) are now free to ditch these delicate negotiations for the debate in Oxford, of which McCain has been calling for a postponement until enough progress is made to stabilize the markets?
I’m interested to see how he talks his way out of this. Meanwhile, the Dow is down about 80 points (after an initial drop at the opening bell of 150 or so).
UPDATE: Turns out that Sen. Joe Biden, despite pleas from all fronts not to attach earmarks to this deal, managed to slip $51.5 million in special Delaware projects into the Senate’s bailout proposal.