U.S. bailout deal breaks down after GOP revolts
A Republican revoltstalled talks Thursday for the massive multi-billion-dollar rescue package for Wall Street that had appeared earlier in the day to be a done deal.
Negotiations broke down just hours after President George Bush and the two men vying for his job met for a historic White House meeting.
Earlier in the day the $700 billion bailout deal appeared to be imminent. But things fell off course Thursday night after Sens. Barack Obama and John McCain met with Bush and other key lawmakers.
Treasury Secretary Henry Paulson sped to back to Capital Hill late Thursday to revive or rework the plan with Congressional leaders. But those meetings ended at 10 p.m. EDT after the lone House Republican involved left an earlier.
Talks are set to continue Friday morning.
House Republicans are in revolt over the plan, balking at the massive amount of money and the role the government would play in the private markets.
Additionally, Democrats are saying that McCain is hurting the negotiations.
"McCain and the Republican caucus are blocking this bill," Rep. Brad Sherman, a California Democrat, told reporters Thursday night.
Democratic Senate Majority Leader Harry Reid, who attended the White House meeting, harshly condemned McCain.
"I would suggest that anyone in that meeting that tried to understand what John McCain said in the meeting, couldn't... John McCain did nothing to help. He only hurt the process," Reid said.
The House's Republican leader, John Boehner of Ohio, said that he didn't know if McCain could help the situation.
Late Thursday, McCain's campaign issued a statement saying, "the plan that has been put forth by the administration does not enjoy the confidence of the American people as it will not protect the taxpayers and will sacrifice Main Street in favour of Wall Street."
The tentative deal would give the Bush administration about $250 billion of the $700 billion it has requested up front, with at least half the money subject to congressional veto, according to Capital Hill aides.
"Conservative Republicans in the House . . . are really balking at this deal," Newsweek magazine's Eleanor Clift told CTV Newsnet Thursday night.
McCain's campaign released a statement late Thursday saying, "the plan that has been put forth by the administration does not enjoy the confidence of the American people as it will not protect the taxpayers and will sacrifice Main Street in favour of Wall Street."
But Sen. Richard Shelby, top Republican on the Banking Committee, emerged from the White House meeting and said, "I don't believe we have an agreement."
In an evening news conference, Obama suggested that McCain hurt the negotiations.
"When you inject presidential politics into delicate negotiations, it's not always as helpful as it could be," Obama said.
"If you are not worried about who's getting credit or who is too blame, things move forward a bit more constructively."
Bush allowed reporters into the West Wing room just before the start of the meeting.
"All of us around the table ... know we've got to get something done as quickly as possible," Bush said.
Obama and McCain were seated at distant ends of the oval table, where they weren't even in each other sight lines. Neither candidate said anything before the television cameras left to allow the meeting to start.
Earlier Thursday, Democratic Sen. Christopher Dodd said he believed Congress could act within days to pass a bill for the final bailout package.
Republican Bob Bennett said, "I now expect that we will indeed have a plan that can pass the House, pass the Senate (and) be signed by the president."
Earlier, House Speaker Nancy Pelosi said Democrats and Republicans had been working behind closed doors to hammer out the agreement. She had said it would likely include taxpayer protection in the US$700 billion package to help the ailing American banking and housing sectors.
White House Spokesperson Dana Perino had said legislators can "hopefully close on a framework where we can get this legislation passed."
Wall Street was cautious Thursday, as the Dow Jones industrials closed some 196 points higher, but that was down from larger gains earlier to the day.
Both McCain and Obama have tried to take the lead on the economy as it has become the foremost issue in the election campaign.
McCain made the astonishing move to suspend his campaign to focus on the economy Wednesday, saying that he would skip Friday's debate if a bailout package was not worked out.
"Anytime McCain get down in the polls, he does something dramatic," Clift said, noting the surprise pick of Sarah Palin as his running mate. "Senator McCain has taken a number of bold moves in this campaign, he's basically a gambler at heart."
Obama responded that presidents have to do more than one thing at a time and said the debate was still on. As of Late Thursday, it was still unknown whether McCain would attend the debate.
Until the Bush meeting, neither candidate has been deeply involved in the bailout package negotiations.
The summit follows Bush's warning Wednesday night that the U.S. faces a "long and painful recession" if the rescue plan is not approved.
"Without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold," Bush said in a primetime address.
If passed, the bailout will equal more than US$2,300 per every individual in America, including children and prisoners.
With files from The Associated Press