Wednesday, September 24, 2008

Amid Financial Crisis, Congress Does What It Does Best: Nothing

Now that Sen. Barack Obama is regaining his strength in the polls, showing not only increased leads in national tracking polls but more importantly to him, growing leads in key battleground states, Democrats are once again feeling confident about their chances in November.

But with that confidence, some Democrats are starting to play with fire over the $700 billion Wall Street bailout proposal being considered on Capitol Hill. Under normal circumstances, this would be an ideal issue to politically attack a sitting president. The problem is that with the general election less than six weeks away, if the bailout plan is not passed quickly, and matters get much worse on Wall Street, there could be a backlash against Democrats just in time for voters to go to the polls.

Senate Majority Leader Harry Reid (D-Nev.) went on the offensive this afternoon, hitting hard at President Bush for "fiscal dereliction of duty." He said the president has been absent from the fiscal crisis when the country needed him the most.

"Congress and especially the American people have a right to know — where is President Bush?" Reid asked. "President Bush has sent Congress an unprecedented $700 billion bailout proposal — $700 billion straight from the pockets of every single man, woman and child in America, and yet President Bush has been absent from what may well be the most important debate on economic policy in a generation.

"I think the president should be available. He's given two brief statements to the press and a press release admonishing the Congress to accept his bailout plan immediately. Other than that, President Bush has been silent." Bush is scheduled to address the nation at 9:01 p.m. Eastern today.

The GOP is also jumping into the political game. USA TODAY's Kathy Kiely reports that Sen. John Cornyn said the bailout is "unacceptable on a number of bases." Rep. Mike Pence, R-Ind., described the proposal as "the largest corporate bailout in American history." Alabama Sen. Richard Shelby, the top Republican on the Senate Banking Committee, told NPR this morning that he wouldn't vote for the proposal as it stands. Sen. Jim DeMint, R-S.C., an outspoken critic of the bailout, says he plans to slow down the bill. Sen. Mitch McConnell, the GOP leader, called the proposal a work in progress.

Great sound bites, but the bickering is already having its effect on the markets, reports Bloomberg. The dollar is slipping again, trading at $1.4664 per euro at 1:32 p.m. in New York, compared with $1.4648 yesterday. It touched $1.4866 on Sept. 22, the weakest level since Aug. 22. The yen fell 0.6 percent to 155.55 per euro, from 154.63 yesterday. The yen dropped 0.5 percent to 106.10 per dollar, from 105.56. The Dow is holding steady today, up 43.8 points at 2:42 p.m. Eastern, after yesterday's huge drop.

"The trouble they're having getting this package passed and further underlying economic weakness are sending the dollar lower," said Andrew Wilkinson, a senior market analyst in Greenwich, Conn., at Interactive Brokers Group, which handles about a fifth of all options traded in the United States.

Playing a political game of chicken is not in the best interests of the country. Yes, there are questions about oversight and accountability in regards to Treasury Secretary Henry Paulson's bailout plan. It is certainly scary to sign off on a $700 billion plan that even rocket scientists can't understand. But what is the cost of inaction? While the opposition is bipartisan, it is the Democrats who control Congress, and they are the ones who would be blamed if nothing is approved and Wall Street experiences a major meltdown. On Main Street, inaction would be devastating to every family in America.

Right now, Congress is doing what it does best, and that is nothing but complain, point fingers at the opposition, and try to score political points.

This is a time when both sides need to take a breath, sit down with the best economic minds (yes, Paulson and Fed chair Ben Bernake are among them) and iron out a plan that has the best chance of working. And they have to do it fast. That means take the political bickering off the table, and for the good of the country, get working.

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