Kerry: The GOP and Talk Radio Practice Cheap-Seat Politics

Sen. John Kerry (D-Mass.) unleashed a blistering attack on Republicans and talk-raido hosts Rush Limbaugh and Glenn Beck yesterday, saying that they have dragged the political conversation down to the lowest common denominator.

Focusing on the energy proposal, which broke down in negotiations with teh GOP over an emissions-trading program, the senator told the Greater Boston Chamber of Commerce that "it's absurd. We've lost our minds. We're in a period of know-nothingism in the country, where truth and science and facts don't weigh in. It's all short-order, lowest common denominator, cheap-seat politics.

"The obstructionism is stunning," Kerry said, describing how Republicans have blocked Senate business with filibuster tactics more during the past 18 months than the period between the end of World War I and the Apollo moon landing in 1969. "I think America really needs to know more of this kind of tactic and how it's shortchanging us."

He also pegged the $700 billion federal bailout program on George W. Bush.

"It was not Barack Obama, it was not the Democratic Party. It was not us who asked for a bailout, or created the situation that required a bailout. And it was in response to a Republican president that a lot of Democrats stepped up."

Obama on C-SPAN: We're Out of Money

Here is a text of an interview President Barack Obama gave to C-SPAN host Steve Scully as reported on Drudge:

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.

So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.

So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything...

SCULLY: When you see GM though as “Government Motors,” you're reaction?

OBAMA: Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis or at least a crisis we haven't seen since the 1930's. And you know the economy is going to bounce back and we want to get out of the business of helping auto companies as quickly as we can. I have got more enough to do without that. In the same way that I want to get out of the business of helping banks, but we have to make some strategic decisions about strategic industries...

SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?

OBAMA: No. I think that what you're seeing in states is that anytime you got a severe recession like this, as I said before, their demands on services are higher. So, they are sending more money out. At the same time, they're bringing less tax revenue in. And that's a painful adjustment, what we're going end up seeing is lot of states making very difficult choices there...

SCULLY: William Howard Taft served on the court after his presidency, would you have any interest in being on the Supreme Court?

OBAMA: You know, I am not sure that I could get through Senate confirmation...

Obama Forces GM's Top Executive to Resign

The Chairman of the Board has spoken, and the CEO is gone.

President Barack Obama asked for General Motors chief executive officer Rick Wagoner to resign, and he has done so effective immediately, White House officials are telling national news outlets tonight.

Obama is expected to announce his latest auto industry strategy tomorrow, including a response to GM and Chrysler's plea for more federal money.

"We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry. We continue to work closely with members of the Task Force and it would not be appropriate for us to speculate on the content of any announcement," GM said Sunday night in an official statement to media.

Wagoner has been CEO for eight years and at GM for more than 30. It is not yet clear who would replace him, or what role the administration would play in that process.

Reaction has been swift to the surprise move. "Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date," said U.S. Rep. Thaddeus McCotter, a Michigan Republican and member of the House Financial Services Committee, told Reuters.

We had feared the Obama administration may force some of the executives out. But we don't really see how this would make GM the better, stronger company that Obama wants it to be," said Rebecca Lindland, director of IHS (nyse: IHS - news - people ) Global Insight.

University of Maryland economist Peter Morici, a one-time critic of Wagoner who had called for him to resign but more recently thought he was doing a better job, said the administration has a "PR problem" regarding corporate bailouts.

"They are bailing out just about anybody that shows up and says they need cash. The public has grown weary of it and instead of throwing a banker to the wolves they have decided to throw Wagoner to the wolves," Morici said.

There was no indication on who would succeed Wagoner, or what Obama's role would be in picking the new leader for the auto giant.

Federal Aid for Newspapers Would Ban Political Endorsements

Here's some help that should be filed under the "Thanks, but no thanks" category.

Sen. Benjamin Cardin (D-Md.) has proposed legislation that would give financial aid to failing newspapers, but there is a catch. Newspapers taking the cash would be banned from publishing political endorsements.

"This may not be the optimal choice for some major newspapers or corporate media chains but it should be an option for many newspapers that are struggling to stay afloat," Cardin told Reuters.

The Newspaper Revitalization Act would allow newspapers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies. Like all other 501(c)3 organizations, newspapers would be free to report on all issues, including political campaigns. But they would be prohibited from making political endorsements.

Many news organizations are considering nonprofit status as a way of surviving these tough times. But nonprofits do operate under a different set of rules. Instead of saving newspapers, a move such as this could turn them all into shoppers. Not that shoppers are bad, they serve a legitimate purpose. But they are not journalist endeavors.

Washington State Newspapers Ask Lawmakers for Tax Breaks

Struggling Washington State Newspaper publishers begged lawmakers Wednesday to give them a temporary break on the state's main business tax.

The Associated Press reports:

Seattle Times Publisher Frank Blethen and Scott Campbell, publisher of The Columbian in Vancouver, told the Senate Ways and Means Committee they need help during tumultuous times in the industry.

Under the proposed measure, the business and occupation tax on newspapers would be cut by 40 percent through 2015.

Blethen said a state tax break wouldn't fix all that ails newspapers, but it would help them preserve jobs.

The loss of advertising revenue, mixed with the current economic climate, has put weekly and daily newspapers in the state under "tremendous financial pressure," he said.

"Some of us, like The Seattle Times, are literally holding on by our fingertips today," Blethen said.

Barney Frank Suggests Tax Increases to Pay for Bailout

Rep. Barney Frank yesterday susggested that the federal government should look at tax increases to help pay for the bailouts.

U.S. to Buy Shares of Nine Major Banks

President Bush, in an announcement from the White House's Rose Garden this morning, released the details a $250 billion plan by the federal government to purchase shares in the nation's leading banks, saying the plan was "not intended to take over the free market but to preserve it."

Nine major banks will participate, including all of the country's largest institutions. Treasury Secretary Henry Paulson had to pessure some on the banks into joining the program. Paulson had targeted healthy institutions that did not necessarily need capital from the government to remove any stigma that might be associated with banks getting bailouts.

Paulson told reporters that "today's actions are what we must do to restore confidence in our financial system.

"We regret having to take these actions. Today's actions are not what we ever wanted to do — but today's actions are what we must do to restore confidence to our financial system."

Government to Take Control of Royal Bank of Scotland on Monday

The Times of London is reporting that the British government will move to take control of the Royal Bank of Scotland on Monday morning by injecting £20 billion of taxpayers’ money.

The Government is also expected to take over HBOS in the most dramatic extension of state ownership in the British economy since the war. The bank’s rescue takeover by Lloyds TSB appeared to be on the brink of collapse [Sunday] night.

As governments around the world scramble to prevent the collapse of the global financial system, Alistair Darling will unveil plans for a £40 billion “recapitalisation” of the banking sector.

The announcement, expected to be made before the London Stock Exchange opens [Monday] morning, could involve the taxpayer taking big stakes in other banks including Lloyds TSB and Barclays, if investors do not answer the call to buy shares.

Bush Signs Bailout Bill Into Law

President Bush signed the bailout bill into law this afternoon. He met with Treasury Secretary Hank Paulson and thanked his team for the work they have been putting in the past couple weeks. The two met at the Treasury Building in Washington.

"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the vote.

"We all know that we are in the midst of a financial crisis," House Republican leader John Boehner of Ohio said before the vote. "And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen."

How They Voted: House Roll Call on Bailout Bill

This is the House roll call for the $700 billion Wall Street bailout bill passed this afternoon by a vote of 263-171. The Senate roll call is at the bottom of this post.

A "yes" vote is a vote to pass the bill. Voting yes were 172 Democrats and 91 Republicans. Voting no were 63 Democrats and 108 Republicans. X denotes those not voting. There is one vacancy in the 435-member House.

ALABAMA
Democrats — Cramer, Y; Davis, Y.

Republicans — Aderholt, N; Bachus, Y; Bonner, Y; Everett, Y; Rogers, Y.

ALASKA
Republicans — Young, N.

ARIZONA
Democrats — Giffords, Y; Grijalva, N; Mitchell, Y; Pastor, Y.

Republicans — Flake, N; Franks, N; Renzi, N; Shadegg, Y.

ARKANSAS
Democrats — Berry, Y; Ross, Y; Snyder, Y.

Republicans — Boozman, Y.

CALIFORNIA
Democrats — Baca, Y; Becerra, N; Berman, Y; Capps, Y; Cardoza, Y; Costa, Y; Davis, Y; Eshoo, Y; Farr, Y; Filner, N; Harman, Y; Honda, Y; Lee, Y; Lofgren, Zoe, Y; Matsui, Y; McNerney, Y; Miller, George, Y; Napolitano, N; Pelosi, Y; Richardson, Y; Roybal-Allard, N; Sanchez, Linda T., N; Sanchez, Loretta, N; Schiff, Y; Sherman, N; Solis, Y; Speier, Y; Stark, N; Tauscher, Y; Thompson, Y; Waters, Y; Watson, Y; Waxman, Y; Woolsey, Y.

Republicans — Bilbray, N; Bono Mack, Y; Calvert, Y; Campbell, Y; Doolittle, N; Dreier, Y; Gallegly, N; Herger, Y; Hunter, N; Issa, N; Lewis, Y; Lungren, Daniel E., Y; McCarthy, N; McKeon, Y; Miller, Gary, Y; Nunes, N; Radanovich, Y; Rohrabacher, N; Royce, N.

COLORADO
Democrats — DeGette, Y; Perlmutter, Y; Salazar, N; Udall, N.

Republicans — Lamborn, N; Musgrave, N; Tancredo, Y.

CONNECTICUT
Democrats — Courtney, N; DeLauro, Y; Larson, Y; Murphy, Y.

Republicans — Shays, Y.

DELAWARE
Republicans — Castle, Y.

FLORIDA
Democrats — Boyd, Y; Brown, Corrine, Y; Castor, N; Hastings, Y; Klein, Y; Mahoney, Y; Meek, Y; Wasserman Schultz, Y; Wexler, Y.

Republicans — Bilirakis, N; Brown-Waite, Ginny, N; Buchanan, Y; Crenshaw, Y; Diaz-Balart, L., N; Diaz-Balart, M., N; Feeney, N; Keller, N; Mack, N; Mica, N; Miller, N; Putnam, Y; Ros-Lehtinen, Y; Stearns, N; Weldon, Y; Young, N.

GEORGIA
Democrats — Barrow, N; Bishop, Y; Johnson, N; Lewis, Y; Marshall, Y; Scott, Y.

Republicans — Broun, N; Deal, N; Gingrey, N; Kingston, N; Linder, N; Price, N; Westmoreland, N.

HAWAII
Democrats — Abercrombie, Y; Hirono, Y.

IDAHO
Republicans — Sali, N; Simpson, Y.

ILLINOIS
Democrats — Bean, Y; Costello, N; Davis, Y; Emanuel, Y; Foster, Y; Gutierrez, Y; Hare, Y; Jackson, Y; Lipinski, N; Rush, Y; Schakowsky, Y.

Republicans — Biggert, Y; Johnson, N; Kirk, Y; LaHood, Y; Manzullo, N; Roskam, N; Shimkus, N; Weller, Y.

INDIANA
Democrats — Carson, Y; Donnelly, Y; Ellsworth, Y; Hill, N; Visclosky, N.

Republicans — Burton, N; Buyer, N; Pence, N; Souder, Y.

IOWA
Democrats — Boswell, Y; Braley, Y; Loebsack, Y.

Republicans — King, N; Latham, N.

KANSAS
Democrats — Boyda, N; Moore, Y.

Republicans — Moran, N; Tiahrt, N.

KENTUCKY
Democrats — Chandler, N; Yarmuth, Y.

Republicans — Davis, N; Lewis, Y; Rogers, Y; Whitfield, N.

LOUISIANA
Democrats — Cazayoux, N; Jefferson, N; Melancon, Y.

Republicans — Alexander, Y; Boustany, Y; McCrery, Y; Scalise, N.

MAINE
Democrats — Allen, Y; Michaud, N.

MARYLAND
Democrats — Cummings, Y; Edwards, Y; Hoyer, Y; Ruppersberger, Y; Sarbanes, Y; Van Hollen, Y.

Republicans — Bartlett, N; Gilchrest, Y.

MASSACHUSETTS
Democrats — Capuano, Y; Delahunt, N; Frank, Y; Lynch, N; Markey, Y; McGovern, Y; Neal, Y; Olver, Y; Tierney, Y; Tsongas, Y.

MICHIGAN
Democrats — Conyers, N; Dingell, Y; Kildee, Y; Kilpatrick, Y; Levin, Y; Stupak, N.

Republicans — Camp, Y; Ehlers, Y; Hoekstra, Y; Knollenberg, Y; McCotter, N; Miller, N; Rogers, N; Upton, Y; Walberg, N.

MINNESOTA
Democrats — Ellison, Y; McCollum, Y; Oberstar, Y; Peterson, N; Walz, N.

Republicans — Bachmann, N; Kline, Y; Ramstad, Y.

MISSISSIPPI
Democrats — Childers, N; Taylor, N; Thompson, N.

Republicans — Pickering, Y.

MISSOURI
Democrats — Carnahan, Y; Clay, N; Cleaver, Y; Skelton, Y.

Republicans — Akin, N; Blunt, Y; Emerson, Y; Graves, N; Hulshof, N.

MONTANA
Republicans — Rehberg, N.

NEBRASKA
Republicans — Fortenberry, N; Smith, N; Terry, Y.

NEVADA
Democrats — Berkley, Y.

Republicans — Heller, N; Porter, Y.

NEW HAMPSHIRE
Democrats — Hodes, N; Shea-Porter, N.

NEW JERSEY
Democrats — Andrews, Y; Holt, Y; Pallone, Y; Pascrell, Y; Payne, N; Rothman, N; Sires, Y.

Republicans — Ferguson, Y; Frelinghuysen, Y; Garrett, N; LoBiondo, N; Saxton, Y; Smith, N.

NEW MEXICO
Democrats — Udall, N.

Republicans — Pearce, N; Wilson, Y.

NEW YORK
Democrats — Ackerman, Y; Arcuri, Y; Bishop, Y; Clarke, Y; Crowley, Y; Engel, Y; Gillibrand, N; Hall, Y; Higgins, Y; Hinchey, N; Israel, Y; Lowey, Y; Maloney, Y; McCarthy, Y; McNulty, Y; Meeks, Y; Nadler, Y; Rangel, Y; Serrano, N; Slaughter, Y; Towns, Y; Velazquez, Y; Weiner, Y.

Republicans — Fossella, Y; King, Y; Kuhl, Y; McHugh, Y; Reynolds, Y; Walsh, Y.

NORTH CAROLINA
Democrats — Butterfield, N; Etheridge, Y; McIntyre, N; Miller, Y; Price, Y; Shuler, N; Watt, Y.

Republicans — Coble, Y; Foxx, N; Hayes, N; Jones, N; McHenry, N; Myrick, Y.

NORTH DAKOTA
Democrats — Pomeroy, Y.

OHIO
Democrats — Kaptur, N; Kucinich, N; Ryan, Y; Space, Y; Sutton, Y; Wilson, Y.

Republicans — Boehner, Y; Chabot, N; Hobson, Y; Jordan, N; LaTourette, N; Latta, N; Pryce, Y; Regula, Y; Schmidt, Y; Tiberi, Y; Turner, N.

OKLAHOMA
Democrats — Boren, Y.

Republicans — Cole, Y; Fallin, Y; Lucas, N; Sullivan, Y.

OREGON
Democrats — Blumenauer, N; DeFazio, N; Hooley, Y; Wu, Y.

Republicans — Walden, Y.

PENNSYLVANIA
Democrats — Altmire, N; Brady, Y; Carney, N; Doyle, Y; Fattah, Y; Holden, N; Kanjorski, Y; Murphy, Patrick, Y; Murtha, Y; Schwartz, Y; Sestak, Y.

Republicans — Dent, Y; English, N; Gerlach, Y; Murphy, Tim, N; Peterson, Y; Pitts, N; Platts, N; Shuster, Y.

RHODE ISLAND
Democrats — Kennedy, Y; Langevin, Y.

SOUTH CAROLINA
Democrats — Clyburn, Y; Spratt, Y.

Republicans — Barrett, Y; Brown, Y; Inglis, Y; Wilson, Y.

SOUTH DAKOTA
Democrats — Herseth Sandlin, N.

TENNESSEE
Democrats — Cohen, Y; Cooper, Y; Davis, Lincoln, N; Gordon, Y; Tanner, Y.

Republicans — Blackburn, N; Davis, David, N; Duncan, N; Wamp, Y.

TEXAS
Democrats — Cuellar, Y; Doggett, N; Edwards, Y; Gonzalez, Y; Green, Al, Y; Green, Gene, N; Hinojosa, Y; Jackson-Lee, Y; Johnson, E. B., Y; Lampson, N; Ortiz, Y; Reyes, Y; Rodriguez, N.

Republicans — Barton, N; Brady, Y; Burgess, N; Carter, N; Conaway, Y; Culberson, N; Gohmert, N; Granger, Y; Hall, N; Hensarling, N; Johnson, Sam, N; Marchant, N; McCaul, N; Neugebauer, N; Paul, N; Poe, N; Sessions, Y; Smith, Y; Thornberry, Y.

UTAH
Democrats — Matheson, N.

Republicans — Bishop, N; Cannon, Y.

VERMONT
Democrats — Welch, Y.

VIRGINIA
Democrats — Boucher, Y; Moran, Y; Scott, N.

Republicans — Cantor, Y; Davis, Tom, Y; Drake, N; Forbes, N; Goode, N; Goodlatte, N; Wittman, N; Wolf, Y.

WASHINGTON
Democrats — Baird, Y; Dicks, Y; Inslee, N; Larsen, Y; McDermott, N; Smith, Y.

Republicans — Hastings, N; McMorris Rodgers, N; Reichert, N.

WEST VIRGINIA
Democrats — Mollohan, Y; Rahall, Y.

Republicans — Capito, N.

WISCONSIN
Democrats — Baldwin, Y; Kagen, N; Kind, Y; Moore, Y; Obey, Y.

Republicans — Petri, N; Ryan, Y; Sensenbrenner, N.

WYOMING
Republicans — Cubin, Y.

Senate Vote

This is the 74-25 roll call by which the Senate approved the Wall Street bailout. On this vote, a “yes” vote was a vote to approve the package and a “no” vote was a vote against it.

Voting “yes” were 39 Democrats, 34 Republicans and 1 independent. Voting “no” were 9 Democrats, 15 Republicans and 1 independent.

Democrats Yes
Akaka, Hawaii; Baucus, Mont.; Bayh, Ind.; Biden, Del.; Bingaman, N.M.; Boxer, Calif.; Brown, Ohio; Byrd, W.Va.; Cardin, Md.; Carper, Del.; Casey, Pa.; Clinton, N.Y.; Conrad, N.D.; Dodd, Conn.; Durbin, Ill.; Feinstein, Calif.; Harkin, Iowa; Inouye, Hawaii; Kerry, Mass.; Klobuchar, Minn.; Kohl, Wis.; Lautenberg, N.J.; Leahy, Vt.; Levin, Mich.; Lincoln, Ark.; McCaskill, Mo.; Menendez, N.J.; Mikulski, Md.; Murray, Wash.; Nelson, Neb.; Obama, Ill.; Pryor, Ark.; Reed, R.I.; Reid, Nev.; Rockefeller, W.Va.; Salazar, Colo.; Schumer, N.Y.; Webb, Va.; Whitehouse, R.I.

Democrats No
Cantwell, Wash.; Dorgan, N.D.; Feingold, Wis.; Johnson, S.D.; Landrieu, La.; Nelson, Fla.; Stabenow, Mich.; Tester, Mont.; Wyden, Ore.

Democrats Not Voting
Kennedy, Mass.

Republicans Yes
Alexander, Tenn.; Bennett, Utah; Bond, Mo.; Burr, N.C.; Chambliss, Ga.; Coburn, Okla.; Coleman, Minn.; Collins, Maine; Corker, Tenn.; Cornyn, Texas; Craig, Idaho; Domenici, N.M.; Ensign, Nev.; Graham, S.C.; Grassley, Iowa; Gregg, N.H.; Hagel, Neb.; Hatch, Utah; Hutchison, Texas; Isakson, Ga.; Kyl, Ariz.; Lugar, Ind.; Martinez, Fla.; McCain, Ariz.; McConnell, Ky.; Murkowski, Alaska; Smith, Ore.; Snowe, Maine; Specter, Pa.; Stevens, Alaska; Sununu, N.H.; Thune, S.D.; Voinovich, Ohio; Warner, Va.

Republicans No
Allard, Colo.; Barrasso, Wyo.; Brownback, Kan.; Bunning, Ky.; Cochran, Miss.; Crapo, Idaho; DeMint, S.C.; Dole, N.C.; Enzi, Wyo.; Inhofe, Okla.; Roberts, Kan.; Sessions, Ala.; Shelby, Ala.; Vitter, La.; Wicker, Miss.

Others Yes
Lieberman, Conn.

Others No
Sanders, Vt.

House Passes Bailout Bill, 263-171

The House passed the Wall Street Bailout Bill this afternoon by a vote of 263-171 and will send it to the president's desk in a matter of hours.

Democrats voted for the bill by 172-63. Republicans voted yes by a margin of 91-108.

President Bush said "When Congress sends me the final bill I'm going to sign it into law." He thanked both Democrats and Republicans for coming together on the legislation. He said there is protection for taxpayers and that the bill will ease the credit crunch.

House Speaker Nancy Pelosi (D-Calif.) said, "As we observe the passes of a serious piece of legislature, we must have an eye to the future." She put the blame on the crisis on the president's policy to deregulate the financial markets.

"We were able to make improvements in a bi-partisan way," Pelosi told reporters in a press conference on Capitol Hill. "Our eye is to the future to shine the bright light of accountability. [Rep. Barney] Frank will be holding hearings on where we go in the future."

Frank (D-Mass.) told the reporters that as of January, "We have to rewrite housing finance in this country. It would be a betrayal of our oath if we stopped here. It will be our job to enact a set of new regulations ... for all financial industry."

Rep. Brian Bilbray (D-Calif.) who voted against the bill, said, "the Senate does what it normally does, and that is to take a bill and turn it into a Christmas tree." He said he could not vote for the bill and answer to his constituents in his district. He described the increase in the national debt at $1.6 trillion because of the bill.

Rep. Steny Hoyer (D-Md.) took a shot at the Bush administration during the press conference saying the White House's financial policy put the nation into this situation. He then thank Frank for his work on the bill.

Rep. James E. Clyburn (D-S.C.), the House majority whip, said he hoped that the vote restored confidence in the government. He said improvements in the bill made by the Democrats, in consultation with Sen. Barack Obama, have made this "an incredible piece of legislation." Rep. Rahm Emanuel (D-Ill.), the Democrat caucus chair, said, "we have done what we needed to do. ... We must have an economic agenda to provide middle-class tax cuts and universal health care." He thanked Obama for making numerous calls to help get this bill passed.

The Associated Press reported on today's economic news:

If anything, the economic news added to the sense of urgency.

The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. Employers slashed 159,000 jobs from their payrolls, the most in five years. That came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent.

The stock market opened higher on anticipation that the bill would pass, and the financial industry shakeout rolled on unpredictably.

Wachovia announced it had agreed to be acquired by San Francisco-based Wells Fargo & Co rather than by Citigroup. Executives said the new arrangement would keep the Federal Deposit Insurance Corp., on the sidelines, thus preventing any depletion of the government's fund that backs bank deposits.

The FDIC said it was sticking behind the Citigroup plan, leaving the fate of the bank in limbo.

The bill has grown since it was first proposed by the administration two weeks ago, but here's what it else it does, as reported by Frobes.com:

--Provides the government with warrants to obtain an equity stake in companies. This helps ensure that taxpayers share in future gains of companies that are bailed out.

--Limits excessive executive compensation for some companies. Any firm that sells more than $300 million in troubled assets to the government is also subject to more taxes.

--Establishes an oversight board and special inspector general to act as a watchdog.

--Requires the Treasury secretary to regularly report to Congress the details of all financial transactions under the bailout.

--Allows federal agencies to modify troubled mortgage loans.

--Expands the amount of government insurance on individual bank deposits from $100,000 to $250,000.

--Gives the chairman of the Securities and Exchange Commission the authority to suspend mark-to-market accounting and requires the agency to complete a study on the effectiveness of this accounting method.

--Requires the president five years from now to devise a plan to recoup net losses, if there are any.

--Gives companies the opportunity to insure their troubled assets rather than selling them, although this is up to the discretion of the Treasury secretary.

Senate Bailout Bill: McCain and Obama Enjoy a Dish of Pork

Want to get something done on Capitol Hill? Here's the recipe.

Tons of pork
One cup of lobbyists
A dash of special interests

1. Take a bill, any bill will do actually, and combine ingredients. Mix well so taxpayers have a hard time distinguishing what is pork and and what is beneficial to the general public.

2. Debate in front of the press, blaming the opposition for holding up negotiations on the bill.

3. Vote under the political cover of some provisions of the bill, approving the measure even if the majority of Americans think it's a bad idea.

That is exactly what happened in Washington last night, as the Senate moved to approved 74-25 a Wall Street bailout plan that now totals about $800 billion of taxpayer money. The only senator who did not vote was Sen. Edward Kennedy (D-Mass.) who is recuperating from his serious illness.

Here is video of congressional negotiators discussing what to throw at the problem:



Seriously, the most noteworthy yes votes came from Sen. John McCain (R-Ariz.) and Sen. Barack Obama (D-Ill.), both of who have pledged in the presidential campaign to fight pork barrel spending. Both tossed aside their campaign pledges to the American taxpayers last night.

Here's Obama's policy statement on park-barrel spending as seen on his website, barackobama.com:

Shine Light on Earmarks and Pork Barrel Spending: Obama's Transparency and Integrity in Earmarks Act will shed light on all earmarks by disclosing the name of the legislator who asked for each earmark, along with a written justification, 72 hours before they can be approved by the full Senate.

Well, that sure didn't happen last night.

McCain is in the same boat. He has often pledged to veto earmarks and pork-barrel spending, most notably in the recent debate where he said he would use his pen to reject such bills, and even pointed to his old pen in his hand. He made the same statements in his speech to the National Small Business Summit in Washington, D.C. last June.

Here is what can be found on JohnMcCain.com, his campaign's official website. The bold face is my addition:

Among the most glaring abuses in Washington is the willful setting aside of taxpayer dollars for the pet projects of special interests, often through last minute additions to appropriations bills. Pork barrel spending is an insult to taxpayers, a waste of public resources, and an abdication of our leaders' responsibility to be good and honorable stewards of the public treasury, for the benefit of all Americans, not just a few.

... As President, John McCain would shine the disinfecting light of public scrutiny on those who abuse the public purse, use the power of the presidency to restore fiscal responsibility, and exercise the veto pen to enforce it.

It's discouraging to see that both candidates tossed away their fundamental principals last night. Unfortunately, you and I are the ones who have to dig deeper to pay for it.

USNews.com had this report on the prospects in the House, which rejected a similar bill a few days ago:

Reporting on the upcoming House vote, The Politico says "caution is still the watchword," but "the revised Senate package blends in more than $100 billion in popular tax breaks as well as aid to rural schools important to House Republicans. And to build support among small town community banks, the bill raises the cap on insured deposits from $100,000 to $250,000." The New York Times also reports House leaders appear "increasingly confident that politically enticing provisions attached to the original bill...would win over at least the dozen or so votes needed to reverse Monday's outcome and send the measure to President Bush." Likewise, the AP says the measure is "gaining ground in the House, where Republicans opposition softened." The Hill offers a similar assessment.

Here is the text of the bill, it's a 451-page pdf file if you dare. Lets look at some of the additions to the bill as reported by HotAir.com:

New Tax earmarks in Bailout bill
- Film and Television Productions (Sec. 502)
- Wooden Arrows designed for use by children (Sec. 503)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.
- Virgin Island and Puerto Rican Rum (Section 308)
- American Samoa (Sec. 309)
- Mine Rescue Teams (Sec. 310)
- Mine Safety Equipment (Sec. 311)
- Domestic Production Activities in Puerto Rico (Sec. 312)
- Indian Tribes (Sec. 314, 315)
- Railroads (Sec. 316)
- Auto Racing Tracks (317)
- District of Columbia (Sec. 322)
- Wool Research (Sec. 325)

The Financial Times had this to say about the pork, hitting it dead on:

Proposed rules on rum excise tax to Puerto Rico and the Virgin Islands, the tax treatment of washing machines and “exemption from excise tax for certain wooden arrows designed for use by children” all feature in the financial rescue package being considered by the US Senate.

While the link between such measures and the US administration’s $700bn bail-out proposals might not be immediately clear, in truth they represent a tried and tested approach to deal with problems on Capitol Hill.

The previous compromise proposals, pulled together last weekend, focused on issues directly related to the plan, such as administrative oversight and executive pay. By contrast, the latest attempt to get a deal includes wholly extraneous measures to win the support of individual members and groups in congress.

FOX: No New Bailout Bill for a Few Days

FOX News reports that the House Parliamentarian has said that the bailout proposal cannot not be revisited. A new bill must be submitted, and that cannot happen until tomorrow or maybe Wednesday because House members are observing the Jewish holiday of Rosh Hashanah.

Dow Off Nearly 700 Points Twice But Starts Modest Rebound

In one of the roughest days in recent memory on Wall Street, the Dow Jones industrials fell by almost nearly 700 points just as it became clear that the bailout proposal forged over the weekend would fail in the House. After recovering slightly, the Dow was again down by 700 points shortly before 3:30 p.m.

The proposal failed 228-205 as most Republican rejected as well as more than 90 Democrats.

Standard & Poor’s 500-stock index was down by 8 percent. 228-205.

President Bush told reporters that he plans to meet with his economic advisers this afternoon "to move forward." After his statement, the Dow regain about 100 points in a matter of minutes.

Michael M. Grynbaum of The New York Times is reporting:

The fear was most pronounced in the world’s credit markets, considered gauges of anxiety among investors. Yields on Treasuries plummeted after the House rejected the plan, with the one-month Treasury note yielding virtually zero.

Banks are charging enormous premiums for short-term financing; the difference between the cost of a three-month loan from a bank, and a three-month loan from the government, rose to the widest point since at least 1984. Other lending rates stayed high.

On Wall Street, the drops were sharp and swift, catching many investors and stock strategists on Wall Street by surprise. Many had expected the measure to be passed in the House, and lawmakers in Congress had suggested as much in comments earlier on Monday.

Did Pelosi's Speech Sink Bailout Plan?

Here is the video of House Speaker Nancy Pelosi's speech, which in part is being cited as a reason why House Republicans voted against the $700 billion bailout proposal. Many saw it as a partisan attack.

Rep. Nancy Pelosi's speech this morning (Part 1):



Pelosi's speech this morning (Part 2):


Rep. Mike Simpson (R-Idaho) said her speech for incited partisan sentiment by blaming Republicans and the administration for the flaws in regulation and failures of oversight that she said drove the financial system to the brink of collapse.

“I know members who said ‘If I wasn’t a no before, I am now,’” Simpson told CQ.

Rep. John A. Boehner (R-Ohio) told Politico's David Rogers that Pelosi had the votes before the speech.:

"We could have gotten it if it were not for this partisan speech that Speaker Pelosi gave,” said Rep. John A. Boehner (R-Ohio), the House minority leader.

Added Rep. Chris Shays, a Connecticut Republican who also voted for the bill: “Nancy blew it.”

"That is an absurd accusation at a time when our country is in deep economic distress," a Pelosi spokesman fired back.

"You don't vote on a speech, you vote on a bill."

House Rejects Bailout Bill; Dow Drops 700 Points But Quickly Regains 200

From Kathy Kiely and Sue Kirchhoff of USA Today:

In a stunning rebuke to President Bush, congressional leaders and Wall Street, the House rejected a $700 billion financial bailout package Monday, with a coalition of conservative Republicans and liberal Democrats refusing to grant the government sweeping powers to buy up distressed loans.

The vote was 228-205 against the measure, with one member not voting. There was broad bipartisan opposition to the measure, with more than 90 Democrats and more than 130 Republicans voting against the bill. Republicans voted more than 2-1 to oppose the bill.

The vote came even though the measure was backed by Bush and House leaders in both parties. But opponents said the package granted the U.S. government too much power and and was beyond the cost the government should pay to address the worldwide financial crisis.

Wall Street reacted immediately to the news. The Dow Jones Industrial Average fell by more than 700 points at one point as the outcome became clear. After the vote, the Dow remained down by more than 550 points.

It's noteworthy that 90 Democrats voted against this bill. House Speaker Nancy Pelosi (D-Calif.), who had reportedly said earlier in the process that she needed the political cover of at least half of the House GOP. She said nothing about getting her own party on board.

Some GOP congressmen pointed to her speech this morning from the House floor where she blamed President Bush's fiscal policies were to blame for the trouble Wall Street is in. Other Republicans would not specifically blame Pelosi, but rather that the bill did not have enough protections for the taxpayers. Some have indicated an uneasiness with the way Treasury Secretary Harry Paulson handled the bailout proocess.

There is a chance the bill could be reconsidered today. "We could take this bill back to the floor with a motion to reconsider an hout from now," if modifications could be made to protect the taxpayers, Rep. John Shadegg (R-Ariz) said.

Details of Bailout Plan Unveiled to Public; House Starts Work Monday

Details of the "Emergency Economic Stabilization Act of 2008" is available, and can be seen here. The bill will be introduced in the House of Representatives on Monday morning and then head to the Senate, Senate Majority Leader Harry Reid, D-Nev, announced to reporters on Capitol Hill today. Marketwatch.com reported these details:

The legislation authorizes $250 billion immediately, with another $100 billion upon presidential certification. An additional $350 billion would also be available subject to congressional approval.

"I appreciate the leadership shown by members on both sides of the aisle, who came together to write a very good bill," President Bush said in a statement. "This bill provides the necessary tools and funding to help protect our economy against a systemwide breakdown."

The Treasury can use a combination of tactics to buy bad loans, focusing on mortgages and mortgage-backed securities but also including other types of loans under certain conditions. Treasury could purchase the bad debt through an auction process as well as by buying loans directly, a Treasury official said in a conference call with reporters.

The proposed legislation also allows companies to participate in an insurance program, whereby Treasury would guarantee troubled assets, charging companies a premium "sufficient to cover anticipated claims," according to the bill.

"This bill provides the necessary tools to deploy up to $700 billion to address the urgent needs in our financial system, whether that be by purchasing troubled assets broadly, insuring troubled assets, or averting the potential systemic risk from the disorderly failure of a large financial institution," Treasury Secretary Henry Paulson said in a press release.

"I am confident this legislation gives us the flexibility to unclog our financial markets [and] increase the ability of our financial institutions to deliver the credit that will help create jobs. We are taking the steps needed to be ready to begin implementing this legislation as soon as it is signed," he said.
The government would get a stake in companies receiving bailout funds so that taxpayer money could be recovered if those companies grow in the future, according to the bill.

The proposed legislation also requires that in five years, the president submit a proposal to Congress "that recoups from the financial industry any projected losses to the taxpayer.

Obama: I Deserve All the Credit for Bailout Plan, McCain Should Get None

Sen. Barack Obama said this afternoon that Sen. John McCain contributed nothing to the bailout compromise, and that McCain deserves no credit for helping forge a tentative agreement on the $700 billion bailout of Wall Street.

The Democrat said he made sure the proposal includes safeguards for taxpayers. Obama said he is inclined to support the bailout because it includes increased oversight, relief for homeowners facing foreclosure and limits on executive compensation for chief executives of firms that receive government help.

"None of those were in the president's provisions. They are identical to the things I called for the day that [Treasury] Secretary [Henry] Paulson released his package," Obama said. "That I think is an indication of the degree to which when it comes to protecting taxpayers, I was pushing very hard and involved in shaping those provisions."

Appearing on CBS' "Face the Nation," Obama was asked by Bob Schieffer whether McCain deserved credit for bringing lawmakers together, Obama said "No.

"Here are the facts: For two weeks I was on the phone everyday with Secretary Paulson and the congressional leaders making sure that the principles that have been ultimately adopted were incorporated in the bill," Obama said.

Sen, Lindsey Graham (R-S.C.) had a different version of the events on Capitol Hill. Appearing on "Fox News Sunday," Graham said McCain worked with House Republicans to achieve plan changes such as government insurance of mortgage-backed securities and a phase-in of federal aid.

"The fact is the House Republicans were not in the mix at all" until McCain arrived at the talks, Graham said. McCain "was decisive in regards to the House being involved."

For his part, McCain passed this morning on taking credit for the bailout compromise.
He was asked on ABC's "This Week With George Stephanopoulos," if he deserved some praise for helping forge a deal, given his much-publicized suspension of his presidential campaign.

"I'll let you and others be the judge of that," he replied.

"I wasn't going to phone it in. I'm a Teddy Roosevelt Republican. I've got to get in the arena. ... I won't claim a bit of credit, if that makes 'em happy."

Reid, Pelosi, Paulson: We Should Have a Deal on Paper by Sunday

Key members of the congressional bailout negotiations team came out of their meeting in unison at 12:20 a.m. Eastern today to tell reporters that they are close to a deal on the $700 billion Wall Street bailout proposal, and that they hope to have a formal announcement sometime Sunday.

House Speaker Nancy Pelosi (D-Calif.) started out by saying that they are close to deal, but "we have to get it committed to paper."

Senate Majority Leader Harry Reid (D-Nev.) noted that, "this evening has been extremely difficult." He said that there has been constant contact with the White House, and that "we should have an announcement sometime tomorrow."

Treasury Secretary Henry Paulson told reporters, "We've made great progress that will work and be effective in the marketplace. ... We have more to do to finalize it. The staffs will be working on it all night."

In a moment of humor, Rep. Barney Frank (D-Mass) drew chuckles when he said, "I hope no one is offended, but in a few days I won't have to speak to any of the people here."

Clearly progress has been made, but there are few details available. It is not known when it can be in the form of a formal bill, or when the House will be able to vote on the proposal. The House will consider it before the Senate.

House GOP Still Balking at Bailout Plan as Talks Continue

House Republicans on Saturday held steadfast in their opposition to the $700 billion bailout proposal being considered in Congress, saying that it would be too costly for taxpayers.

House Minority Leader John Boehner (R-Ohio) told reporters at the Capitol that his members will not agree to a bill “that bails out Wall Street at the expense of American taxpayers.”

"Somebody, maybe it was Einstein, said things should be done as quickly as possible, but no quicker than possible," Republican Whip Roy Blunt (R-Mo.) told the reporters. "We're not moving on any kind of artificial timeline. We're moving toward the very best solution in the shortest period of time."

But Senate Majority Leader Harry Reid (D-Nev.) said he hoped a framework for an agreement could be in place before 6 p.m. Sunday Eastern, before the markets open in Asia for Monday's trading.

"The goal is to come up with a final agreement by tomorrow," Senate Majority Leader Harry Reid, D-Nev., said from the floor of the Senate. "We may not be able to do that, but we're trying very hard."

The Wall Street Journal's Corey Boles and Michael R. Crittenden reported this afternoon that there were signs that lawmakers and the Treasury Department remain divided on how the $700 billion authority to buy up toxic assets will be meted out.

Lawmakers want Treasury to receive the authority in tranches, receiving $250 billion immediately and another $100 billion if needed as certified by the president. The remaining $350 billion would be subject to a congressional vote, giving lawmakers the opportunity to vote to rescind the funds.

But a Senate aide familiar with the discussions said Treasury is pushing for a larger initial authority, likely around $500 billion.

Sen. John McCain (R-Ariz.) returned to Washington after his presidential debate with Sen. Barack Obama (R-Ill.) in Mississippi last night. His campaign office told Politico that Republicans want McCain's participation in the process to be seen by the public in a better light.

Patrick O'Connor of Politico writes this afternoon:

The latest House GOP posturing comes amid a Republican effort to ensure John McCain is credited with whatever progress is made in the talks.

McCain arrived back in Washington just before dawn Saturday, and his campaign said he planned to “resume negotiations with the administration and Congressional leaders from both parties to forge a bipartisan solution to our economic crisis.”

Republicans are clearly worried that their presidential candidate’s first effort to engage in the bailout negotiations didn’t come off as well as they might have hoped – that in the public’s mind, a deal was close until McCain parachuted in, a White House meeting collapsed and McCain left for the debate in Mississippi with the various factions farther from a deal than they’d been before.

House Republicans are now trying hard to recast those events.

What actually happened, they say: By not taking a stand on the modified version of the Treasury Plan that Democrats, Senate Republicans and the White House seemed nearly ready to support, McCain gave House Republican the time they needed to force a better deal for taxpayers and homeowners alike.

During a brief session in the Capitol on Friday, McCain reminded a small band of Republican leaders that he had given them a political opening in the landmark legislative fight.

According to people present, McCain then told his congressional colleagues, “Now, go get something.”

O'Connor also delves into the political maneuvering earlier in the week that seemed to put an agreement on hold:

While McCain greeted his top allies on Capitol Hill, lawmakers were working toward a compromise deal in a bipartisan, bicameral meeting. When that meeting ended, both Dodd, the Democratic chairman of the Senate Banking Committee, and Bennett said that negotiators had agreed on a plan that could pass both houses of Congress and be signed by the president.

Gregg, a Republican from New Hampshire, told Politico Friday that the compromise wouldn’t have come together so quickly if Democrats didn’t know that McCain was on his way. “We wouldn’t have had as much movement [Thursday] as we did have, if he hadn’t come to town and some of our colleagues on the other side of the aisle wanted to upstage him,” Gregg said.

With the deal struck, Republicans in the House believed that the trap was set, not so much for McCain as for their own leader, Boehner.

As House Republicans saw it, Democrats and the White House were close to a deal and just needed McCain to sign on so they could roll Boehner under the bus and claim a bipartisan victory.

... But if the Democrats and the White House were ready for a game of “ganging up on Boehner” – as the minority leader said later – McCain didn’t play along.