Electoral Ramifications Of The Bailout Bill

McCain strutted out of the debate thinking he had won. Giuliani and the other lobbyists in his entourage assured him he was the champ. Today's Gallup poll confirmed what every single focus group and every snap poll had found: that despite the on-the-payroll media-for-McCain contingent at Fox, etc, people were viscerally turned off by McCain's nastiness and condescending behavior and by his loser body language. It wasn't close. 46% of viewers though Obama bested McCain. Only 34% thought McCain did better. "Obama scored even better-- 52%- 35%-- when debate-watchers were asked which candidate offered the best proposals for change to solve the country's problems."

McCain may be praying the next episode of Palin Livin', Bristol Palin's shotgun wedding just before the election, will save his rapidly sinking campaign, but the sleazy lobbyists driving the Double Talk Express are by no means putting all their eggs into that unpredictable basket. Although Newt Gingrich is urging vulnerable Republicans in Congress-- and is there one more vulnerable than McCain?-- to vote NO on the bailout and ride that vote to victory in November, McCain has decided, incongruously but predictably, to claim credit for the bailout. Is he crazy? Is Gingrich wrong?

Yesterday's Gallup poll showed that "Americans overwhelmingly favor Congress' passing a plan that would help fix the current Wall Street economic crisis." They don't like Paulson's plan, of course, but McCain and the congressional leadership and the establishment media will now work hard to prove that the garbage plan they agreed on is not Paulson's plan.

Previewing a McCain campaign message for the days ahead, top strategist Steve Schmidt claimed Sunday that Sen. John McCain (R-Ariz.) is partly responsible for the tentative agreement on a mortgage bailout that congressional leaders announced shortly after midnight.

Schmidt was appearing on NBC’s “Meet the Press” with David Axelrod, the Obama campaign’s chief strategist, who ridiculed the McCain claim as “a little bit of fiction.”

...Schmidt argued: “Earlier in the week, when Senator McCain came back to Washington, there had been no deal reached. … What Senator McCain was able to do was to help bring all the parties to the table, including the House Republicans.”

Axelrod responded: “When this crisis emerged, Senator McCain's first reaction was to say the economy is fundamentally strong. The next day, he suggested a commission to study this. And by eight days later, he said it was such a crisis that he was going to suspend his campaign. He showed up a day later in Washington.

“It isn't clear what his role was. So it’s a little bit of fiction to now claim credit for it. That's not the important thing, though. The important thing is that the principles that Senator Obama outlined originally are now embraced and taxpayers will be protected.”

This morning's Times delineates some of what is emerging from the Inside the Beltway negotiations.

The bill includes pay limits for some executives whose firms seek help, aides said. And it requires the government to use its new role as owner of distressed mortgage-backed securities to make more aggressive efforts to prevent home foreclosures.

In some cases, the government would receive an equity stake in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the private firms flourish in the months and years ahead.

The White House also agreed to strict oversight of the program by a Congressional panel and conflict-of-interest rules for firms hired by the Treasury to help run the program.

Democratic candidates for Congress are watching carefully. Annette Taddeo in Miami is not alone when she says she's waiting to see the kind of homeowner protections Dick Durbin is able to force Paulson and Bush to put into the bill before she can weigh whether the bill is worth supporting or not. Half a dozen candidates for Congress told me almost exactly the same thing. Like the voters, they know this bill stinks and like the voters they know something has to be done-- but they want to make sure taxpeyers and homeowners get as fair a shake as possible. Mark Schauer, who's running against Republican extremist Tim Walberg in economically hard-hit southern Michigan took a similar tact: "Let's be clear, we're in this mess because of George Bush and Tim Walberg's failed economic policies. While I am encouraged by the bipartisan negotiations taking place in Washington this weekend, any rescue plan must first prevent people from losing their homes, help small business, and bring jobs and economic development to our communities. We must also protect the interests of taxpayers with adequate oversight and no blank checks for Wall Street. It remains to be seen whether or not this package meets those standards."

What concerns me is that while the Democratic leadership is busy rounding up votes to give Bush what he wants, Republicans are carefully plotting campaign strategy. Radical right incumbents like Mike Pence (R-IN), John Shadegg (R-AZ), Michele Bachmann (R-MN), John Culberson (R-TX) will all attempt to use their no votes on this one issue as proof that they are not Bush rubber stamps and that they stand with the middle class-- regardless of their years of voting records. My advice to progressive challengers: come out loud and clear against the bailout and talk about the inherent rigging of the financial system to help the rich and powerful at the expense of the rest of us. Jerome a Paris has a brilliant explanation is today's European Tribune. He writes, for example, that "the financial world cannot behave responsibly, if left to its own devices and thus should not be left to its own devices" and that "the main argument to give financial markets a free hand-- that they have created so much growth and prosperity-- needs to be called for what it is: a lie."

We contacted someone who has been talking with us about this mess for years and advocating real reform, Larry Kissell, the Democratic opponent to Republican rubber stamp Robin Hayes. There's no telling if Hayes will vote with Bush as he normally does, or go along with Gingrich's siren call that he'll have a chance to win re-election by breaking with Bush. In the past when Hayes wanted to break with the GOP leadership-- like when CAFTA was threatening thousands of jobs in North Carolina-- the Republican leadership yelled at him, made him weep and he always went along with them. With Bush's approval rating hovering below 20%, even Hayes may have the courage to oppose him on something. But that doesn't matter one way or the other to Larry. Here's what he told us this morning:

"I have been saying for nearly 3 years now that my district was the canary in the coal mine. We have seen the devastation of the failed Bush policies firsthand for years now that have just hit Wall Street and Middle America. Had my opponent and the Bush Administration taken notice when record numbers of people were losing their jobs, when homes were going into foreclosure, and small businesses were facing the credit crunch we wouldn't be here today debating a bailout for Wall Street and trying to avoid not just a recession but another Great Depression. The time for politics has passed and we must have leadership."

This is entirely consistent with what Larry was saying about the bailout on Friday: "Republicans and Democrats alike-- including my opponent, Robin Hayes-- helped create this crisis by voting for the massive deregulation contained in the 1999 Financial Services Act. I call on Congressman Hayes to urge his fellow Republicans to come back to the table and stay there until a solution is negotiated.  American taxpayers are about to be put on the hook for a bailout of upwards of three-quarters of a trillion dollars. The least politicians in Washington can do is to set aside their partisan differences for a day or two and work together to make sure that money is spent responsibly. If I were in Washington today I'd agree to sit down with anyone, at anytime to get a solution. NC can't afford anymore economic devastation. After years of job losses, plant closings and rising gas prices, we need all the relief we can get and we need it now."

As for McCain's role in all this... John Kerry summed it up best: "He said he was going to interrupt his campaign to come down and save the negotiations. Most people believe is that what he did was interrupt the negotiations to come down and save his campaign." Watch: