Rep Barney Frank blames House GOP for breakdown of deal
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*Frank blames House GOP for breakdown of deal*
By CHARLES BABINGTON, Associated Press Writer *23 minutes ago*
WASHINGTON - The chairman of the House Financial Services Committee
declared
Friday that an agreement on legislation to relieve a spreading financial
crisis depends on House Republicans "dropping this revolt" against
President
Bush.
Rep. Barney Frank said leading Democrats on Capitol Hill were shocked
by the
level of divisiveness that surfaced at a White House meeting
Thursday, not
long after key congressional players of both parties declared they'd
achieved the broad outlines of an agreement on a bill implementing the
administration's proposed $700 billion bailout plan.
Frank said he did not think that Democrats were going to see a
substantially
different proposal from the plan the administration has been trying
to sell
to lawmakers and which had been the focal point of closed-door talks for
days. He called the rival proposal being pushed by House conservative
Republicans "an ambush plan."
Participants in a meeting late Thursday afternoon that Bush had at
the White
House with congressional leaders and presidential candidates John
McCain and
Barack Obama said it descended into arguments. The disagreements were so
deep-seated that some lawmakers wondered aloud just who and how many
negotiators would show up for the resumption of talks later Friday
morning
at the Capitol.
"I didn't know I was going to be the referee for an internal GOP
ideological
civil war," Frank, D-Mass., said on CBS's "The Early Show."
Sen. Richard Shelby, an Alabama Republican who appeared on the same
show,
said many GOP lawmakers dislike the proposal that has been pushed on the
administration's behalf principally by Treasury Secretary Henry Paulson.
"Basically, I believe the Paulson proposal is badly structured," Shelby
said. "It does nothing basically for the stressed mortgage payer. It
does a
lot for three or four or five banks . ... "
The political infighting happened even as Washington Mutual Inc., one
of the
country's largest banks, collapsed under the weight of its bad bets
on the
mortgage market. The Federal Deposit Insurance Corp. seized WaMu on
Thursday, and then sold the thrift's banking assets to JPMorgan Chase
& Co.
for $1.9 billion.
Even for a party whose president suffers dismal approval ratings, whose
legislative wing lost control of Congress and whose presidential
nomineetrails in the polls, Thursday was a remarkably bad day for
Republicans.
The White House summit meeting, called principally with the purpose
to seal
the deal that Bush has argued is indispensable to stabilizing frenzied
markets and reassuring the nervous American public, descended into
arguments.
The meeting revealed that Bush's proposal had been suddenly
sidetracked by
fellow Republicans in the House, who refused to embrace a plan that
appeared
close to acceptance by the Senate and most House Democrats.
Paulson begged Democratic participants not to disclose how badly the
meeting
had gone, dropping to one knee in a teasing way to make his point
according
to witnesses.
And when Paulson hastily tried to revive talks in a nighttime meeting
near
the Senate chamber, the House's top Republican refused to send a
negotiator.
"This is the president's own party," Frank said at the time. "I don't
think
a president has been repudiated so strongly by the congressional wing
of his
own party in a long time."
"What we have right now is total chaos brought by injecting presidential
politics into very serious negotiations," New Mexico Gov. Bill
Richardsonsaid on NBC.
The presence of McCain and Obama at the White House session indeed
lent a
greater aura of urgency and personal intensity to the discussion.
Asked Friday whether an agreement appeared likely by the end of the
weekend,
Frank said: "It depends on the House Republicans dropping this revolt
against the president and cooperating in trying to amend the plan and at
this point I can't give you a yes or no because it's up to the House
Republicans and their war, I think, on behalf of Sen. McCain, with
President
Bush."
McCain's leadership in the negotiations "is to try to stop us from
yelling
at each other, announcing deals that don't exist, to actually talk to
the
House and the Senate and get agreement and then go to the press," Sen.
Lindsey Graham, R-S.C., said on NBC's "Today" show: "Try to create
organization out of chaos. Three days ago (Sen.) Harry Reid said
there'll be
no deal without John McCain's support. Nothing happened for three
days. John
comes back to town, now he's being criticized for coming back."
House Speaker Nancy Pelosi, asked if a way can be found to an accord any
time soon, said that "it will happen because it has to happen. I
would hope
we could come to agreement within the next 24 hours so we could put
the bill
in writing and bring it to the floor. That's really up to the House
Republicans."
Shelby, however, said he has a letter from some 200 economists saying
the
plan as structured by Paulson "is a mistake and won't work."
"I say this will not solve the problem," he said on ABC's "Good Morning
America.:"
"We're going to spend close to a trillion dollars, we're going to
borrow it,
I say we can do better," Shelby said.
Republicans and Democrats alike seemed unsure which way McCain was
leaning.
His campaign's statement late Thursday shed little light.
"At this moment, the plan that has been put forth by the
administration does
not enjoy the confidence of the American people," it said. It was
unclear
whether McCain would attend Friday night's scheduled debate against
Democratic nominee Barack Obama in Oxford, Miss.
Ordinarily a Republican president's problems are with Democrats,
especially
if they control the House and Senate. In this case, Bush seemed
almost over
that hurdle.
To be sure, Democrats demanded a number of changes in his plan, but
administration insiders signaled they probably were acceptable. They
included greater oversight, more protections for taxpayers, efforts
to head
off home foreclosures and piecemeal allocations of the federal money
to buy
toxic mortgage securities.
What caught some by surprise, either at the White House meeting or
shortly
before it, was the sudden momentum behind a dramatically different plan
drafted by House conservatives with Minority Leader John Boehner's
blessing.
Instead of the government buying the distressed securities, the new plan
would have banks, financial firms and other investors that hold such
loans
pay the Treasury to insure them. Rep. Paul Ryan, R-Wis., a chief
sponsor,
said it was clear that Bush's plan "was not going to pass the House."
But Democrats said the same was true of the conservatives' plan. It
calls
for tax cuts and insurance provisions the majority party will not
accept,
they said.
At one point in the White House meeting, according to two officials,
McCain
voiced support for Ryan's criticisms of the administration's proposal.
Frank, a gruff Massachusetts liberal, angrily demanded to know what plan
McCain favored.
These officials also said that as tempers flared, Bush struggled at
times to
maintain control.
At one point, several minutes into the session, Obama said it was
time to
hear from McCain. According to a Republican who was there, "all he
said was,
'I support the principles that House Republicans are fighting for.'"
Some at the table took that to mean the conservatives' alternative
proposal,
which stands little chance of passage.
A few hours later, Paulson and the handful of negotiators wearily
headed for
home. Frank told The Associated Press: "I did tell Secretary Paulson
that
this whole thing is at risk if the president can't get members of his
own
party to participate."
More:
http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/
financial_meltdown;_ylt=Agok6EOfka7_Sgry9tFplFGs0NUE
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
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