President Bush will address the nation tonight to make a case that the administration's proposed $700 billion bailout is the best option to stabilize U.S. financial markets. Bush's 9 p.m. address comes on the heels of congressional calls for the president to take ownership of the plan that has encountered some opposition from Republicans who say it betrays free-market principles and skittish Democrats who want more cover over an unpopular decision with 41 days until Election Day. Senate Majority Leader Reid called on President Bush this afternoon to do more to support the Wall Street bailout plan and accused him of dodging his responsibility to be a leader on the issue. "We have a right to know -- where is President Bush?" Reid said. "This is the Bush plan. It's time for him to take ownership." Reid acknowledged that despite the best efforts of Treasury Secretary Paulson and Federal Reserve Chairman Bernanke to brief Congress on the bailout, major concerns remain among lawmakers of both parties. "I don't believe anyone, Democrat or Republican, felt the questions were sufficiently answered," Reid said of the pair's testimony Tuesday at a Senate Banking Committee hearing. Senate Democrats will meet with Paulson this afternoon to further discuss the bailout plan.
Paulson kept up his lobbying presence this morning, making inroads to a skeptical House Republican Conference. Paulson set out to assuage fears of many members who contend the plan to purchase and resell the mortgage assets of troubled banks will lead to higher taxes. House Democrats could lose up to half of their Caucus on the vote, so they are looking for more than 100 Republicans to support the package. "I actually thought our discussion today was significantly better than yesterday. There was more discussion of Main Street than Wall Street," House Minority Whip Blunt said.
A House GOP aide said there is growing understanding in the Conference that Congress must act, but much skepticism and many questions remain. The Republican Study Committee has proposed a plan to suspend the capital gains tax. "Many of us view this as a slippery slope to socialism," said Rep. Jeb Hensarling, R-Texas, chairman of the group. Rep. Patrick McHenry, R-N.C., said he was withholding his views until he hears from Paulson this afternoon in front of the House Financial Services Committee. Rep. Peter King, R-N.Y., said he felt there was a growing consensus to move ahead because there is no better alternative and that the economy could come to a standstill without the liquidity. "[GOP] Leadership is making tough decisions," King said. "We have to have a plan. We have to do it." In the Senate, a spokesman said Sen. Jim DeMint, R-S.C., would seek several hours to debate the package. DeMint said he was only looking to bring transparency to the process and would not try to derail or delay it. "It's just my intent to have an open and honest debate," DeMint said.
This article appears in the September 27, 2008, edition of National Journal Daily PM Update.