Bipartisanship has become a mantra in Washington as the nation faces an unprecedented economic crisis. And, after 20 years of slash-and-burn partisanship, there is something to be said for bipartisanship. But, yesterday the blame for Congress’s failure to structure a bailout rests partly with this concern for bipartisanship.
The President put forward a plan that would have given the Treasury Secretary unlimited control over $700 billion. The original bill actually included the provision that the Secretary’s decisions could not be challenged in the courts or by Congress. Needless to say, amidst the many novel interpretations of the Constitution put forward by the Bush Administration, this was the most outrageous. But, in the spirit of bipartisanship, the Democratic leadership of the Congress worked for a week with the administration to improve their proposal.
Last Thursday, after John McCain flew back to Washington to take part in the negotiations, the negotiations broke down as House Republicans announced their refusal to back the Bush plan. To be clear: The objections raised by the House GOP did not have to do with the Democratic amendments to the Bush plan but to the plan itself. A group of very conservative House members have lost confidence in Bush and Treasury Secretary Paulson for abandoning what the conservatives believe are crucial GOP commitments to less government spending and less regulation of the free market. They would not sign on to the deal.
Another round of negotiations over the weekend brought everyone back to the same page. That same page was a muddled mess of a compromise that even its backers could scarcely explain to the American people. A group of far left Democrats and far right Republicans refused to back the measure and they defeated it.
The opposition to the bailout may lack a plan but they don’t lack for clarity. On the right, they don’t think there needs to be a plan. They support the free market and see the crisis as the result of too much regulation and government intervention in the market. Most cite Fannie Mae and Freddie Mac’s role in the sub-prime mortgage market. Others are more sweeping in their indictment, such as Texas Rep. Ron Paul. No longer a presidential candidate but still a libertarian wingnut, he was blaming the Federal Reserve System, not the actions of the Fed, but the fact of the Fed. You would have thought that a congressman whose district was just leveled by a hurricane would see the benefit of government intervention.
The Democrats who failed to back the plan were from the more lefty wing of the party. They objected to what they perceived as bailing out Wall Street executives whom they think should be put into early retirement, and with no golden parachute to ease the fall. This group was, in its way, even less principled than the GOP opponents if the bailout: Whatever else it did or did not do, the bailout was a slap in the face to the idea that capitalism and competition are always the best way to organize society, and that is a lesson the nation needs to learn.
So, going forward, the House Democrats should ignore the Republicans for a day or two and craft their own proposal, one that has the support of every Democratic member of the House. Keep communication with the administration open, but craft a specifically Democratic plan. Then let the GOP vote against it and the President veto it. The Senate, which is so evenly split, is dicier – Democrats there would need to make sure they have at least one or two Republicans on board. If the final Democratic measure is vetoed, at least the American people will know where the blame lies for the meltdown.
Sometimes ideological clarity will help to make future bipartisanship easier. Legislators will vote for a compromise, but they should not be expected to vote for the legislative equivalent of hash. Democrats want government intervention in the market to restore fairness as well as liquidity. Republicans want the free market to play out. Let’s give that choice to the American people on November 4.
Michael Sean Winters