Forty minutes after the 15-minute vote for HR 3997 — a $700 billion amendment to an amendment — was opened in Congress, the acting speaker banged the gavel, and everyone on the floor of the House of Representatives stood in silence. After a weekend of ceaseless work, the effusive endorsement of the Democratic leadership and the eventual endorsement of the House Republican leadership under John Boehner (doomed to spend his life saying “it’s pronounced BERNER!’), the largest financial bailout in US history … had failed to pass.
The ultimate vote was 228 against to 205 for. The Democratic leadership managed to whip two thirds of their members into line, gaining around 140 votes for, and 94 against. The Republicans could only deliver a third, 65 for, 133 against. The leaderships managed to persuade a couple of nay votes over, but that was it. Even as the House moved on to another, utterly trivial matter, the shock was still resounding.
Absolutely no-one expected this. No-one. Even those who were arguing against the vote — economically right-wing Republicans, and left Democrats, and their supporters in the op-ed columns — were doing so in a spirit of bearing witness in the face of noble defeat.
Half an hour after the vote went down, the Republicans came out for a presser to blame … house speaker Nancy Pelosi, for giving a partisan speech — a pretty standard turkey slap of the Republicans, deregulation etc etc — that had so angered their wavering renegade members, that they had voted against. This is pissweak — either they think the bill was worthwhile, and should have taken Pelosi’s party-line slap — or they always intended to play politics with it, and undermine the Democrats de facto leadership role in this.
The accusations prompted the bill’s principal pilot, Barney Frank to new heights of drawled sarcasm: “there’s 12 Republicans who are putting feelings over country, holding out because someone said something they didn’t agree with … give me their names and I will go and be uncharacteristically nice to them,” to big laughs.
What was the way ahead now? Boehner was asked. He simply didn’t know. Neither did Republican Senate minority leader John Gregg, who had assumed the bill would be up for the Senate on Wednesday. Congress members are desperate to get out of Washington and back to their districts to campaign — so that they can pretend that they’re outsiders and mavericks, unassociated with Congress and if you send me to washington, (for the 17th time), I will clean up the … etc.
Added to the complexity, is that it’s the Jewish new year holiday of Rosh Hashanah, when we commemorate God’s reneging on every promise to His people, and devout Jewish congressmembers — or those with devout Jewish communities in their districts — have announced that they won’t be doing politics until it’s over tomorrow sundown. Since Barney Frank, chair of the Senate Housing subcommittee, whose been putting this bill together, is one of their number, that puts an immediate 24 hour crimp in the thing.
As the deal went down, so did the Dow. With a two hundred point fall on the books by late morning, as the vote started to fail it fell another five hundred points , before recovering ever so slightly and then falling again. There was a stampede of money towards US Treasury bills, whose yield fell to near zero … and Campbell’s stocks, which had the second biggest rise of the day. T-Bills and canned goods.
At 3.30pm, President Bush spoke to the assembled press, very briefly, in the middle of an official greeting of the Ukrainian President, who must have been fighting the urge to run and call his broker. Bush’s mumbled vacuities didn’t reassure anyone.
Various stop-gap proposals were then flying around, including the idea that the exact same bill be presented to the Senate first, where it is certain to pass — although we said that before, didn’t we.
Two hours after the bill was voted down, general confusion still reigned, the product of a system with excessive separation of powers, combined with a weak and discredited President unable to rally people. With the stock market about to close, and people leaving town it became increasingly possible that the leadership vacuum would be so great that the country would just drift into a credit squeeze and freeze, out of the sheer possibooity that there was no-one, no-one, on the ground willing to say “OK, that’s failed. Let’s do this”.
Though all attention has been paid as to what would sweet talk enough Republicans to support the bill, little thought has been given to what might persuade to bring 12 of the 94 Democrats across to support it — though most of the left simply will not get stuck with bailing out Wall Street. But of course, the Democratic leadership don’t want to pass it on a Democrat majority — they want every party to have their hand in the average American’s wallet so all are equally despised.
Their political task now is to sheet home the blame to the Republicans as wreckers — Boehner’s remark about people turning against the bill because of Pelosi’s speech is a godsend to them, as Frank clearly realised. John McCain is also jammed up by the failure of this vote, since he’d basically attached himself to it.
“I dived in and suspended my campaign,” old walnuts said before the vote failed.
Snorting and smirking he said that “my opponent said that he was monitoring the situation” surrounding it with tiny air quotes.
He’s looking bloody silly now, and Obama’s prudence is paying off — he, once again, looks presidential, demanding that Congress get it together, McCain looks chaotic.
After the vote, a Republican House member made things worse trying to pull Walnuts out of the fire, saying Senator McCain’s campaign suspension “had brought this issue to the attention of the American people…” Yeah, because no one had been paying any attention to THE COLLAPSE OF THE AMERICAN FINANCIAL SECTOR before Johnny crashed in.
In a coffee shop near the Capitol building, the vote had the same effect as a hurricane, prompting strangers to talk to each other.
“You gotta put your money in silver and gold,” said one guy at the counter. Another snorted.
“Silver and gold? Guns and food man, guns and food.”
Someone rushed in — “I just heard that ATM’s will be shutting down by this evening,” he said breathlessly. Everyone looked at each other, and went back to their coffee, the TV. And then a couple of people quickly paid their cheque and quietly slid out…
At a quarter to five, after the market had closed 777 points down — spooky — Treasury secretary Henry Paulson addressed a press conference outside the White House and said, well nothing, what could he say: “I will be continuing to work with Congressional leaders to get a deal they can all support…”
He sounded hoarse like he’d spent the past 72 hours on the phone — or the past three shouting at people.
The principal question: “Was anything resembling his plan dead in the water?”
…he stonewalled. And then let slip: “Our banking system has been holding up very well, considering the pressures.”
Read that again — he’s actually saying the whole banking system could go. Not “our system is solid” but “it’s holding up very well”.
And it’s only Monday.