After meeting nearly around the clock for two days, a bipartisan group of Congressional leaders reached a tentative agreement with the Bush administration early Sunday morning on a compromise financial bailout bill that is less sweeping than the original proposal crafted by Treasury Secretary Henry M. Paulson, and includes more oversight, accountability and taxpayer protections. Congressional staff members worked through the night to draft a bill that would be brought to the House floor for a vote on Monday.

 

According to a draft of the proposed compromise legislation released by House Speaker Nancy Pelosi’s office, the goal is to “reinvest, reimburse and reform” while also stabilizing the financial markets. The most significant departure from Paulson’s original proposal is that the Administration's initial request for $700 billion upfront is cut in half, and Congressional oversight and approval will be necessary to commit additional taxpayer funds.

 

Other key provisions include taxpayer protections; limits on “excessive” CEO and executive compensation (“excessive” not being defined); banning multi-million dollar golden parachutes; recovery of performance-based bonuses when top-level executives fail to deliver; a bipartisan oversight board; assistance to homeowners via with mortgage loan modifications; and allowing community banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks so as to enable them to continue to extend credit to small businesses.

 

From the start, the bailout was deeply unpopular with voters – some of whom joined protest rallies against it. Fifty-one percent of American adults participating in a Rasmussen national telephone survey Thursday and Friday nights think that the original version of the $700-billion taxpayer-funded Wall Street bailout is an attempt by politicians to gaining additional power, rather than to fix the economy. One-third also believe that political leaders are trying to scare  us into supporting a bailout plan by making the situation sound direr than it is; 39 percent disagree this is the case and 27 percent are not sure one way or the other. It remains to be seen whether voters will decide they can live with the scope and terms of the bailout once they’ve seen the details in writing.

 

But just what was McCain’s role in brokering this compromise deal? Did he “derail” a “done deal” by charging into Washington, D.C.? Or did he quell a riot by House Repubs by hearing them out, and conveying to the president and other key players that the deal was dead unless certain conditions were met?

 

Here’s the back story, as described by syndicated columnist Debra Saunders:

 

Yes, John McCain's suspension of his campaign earlier in the week and call for a delay of Friday's debate were campaign stunts. But his decision to go to Washington to prod political leaders to pass a sensible bailout measure, while political, showed America a candidate who will risk his electoral fortune to deliver the right policy.

 

McCain was in a corner. He clearly feared that if Congress did not approve a bailout measure, the economy would tank. Then, his bid for the White House would be doomed.

 

And while Senate Majority Leader Harry Reid derided McCain's appearance Friday, on Wednesday Reid declared a need for “the Republicans to start producing some votes for us. We need the Republican nominee for president to let us know where he stands and what we should do.”

 

The alleged deal that had been cut before McCain landed in Washington Thursday did not exist. House Republicans had not signed on.

 

Without them, Democrats would not sign on. On Friday, Reid falsely claimed there was a deal “and then guess who came into town.”

 

And: “The insertion of presidential politics has not been helpful. It's been harmful.” No lie, but it's Reid and company who appeared ready to scuttle any settlement lest McCain get the credit.

 

Here’s how events unfolded, according to The Washington Post:

 

When Sen. John McCain made his way to the Capitol office of House Minority Leader John A. Boehner (R-Ohio) just past noon on Thursday, he intended to "just touch gloves" with House Republican leaders, according to one congressional aide, and get ready for the afternoon bailout summit at the White House.

 

Instead, Rep. Paul D. Ryan (Wis.), the ranking Republican on the House Budget Committee, was waiting to give him an earful. …

 

McCain listened, then, with Sen. Lindsey O. Graham (S.C.), he burst into the Senate Republican policy luncheon. …

 

“I appreciate what you've done here, but I'm not going to sign on to a deal just to sign the deal,” McCain told the gathering, according to Graham and confirmed by multiple Senate GOP aides. “Just like Iraq, I'm not afraid to go it alone if I need to.” …

 

By the time the meeting broke up, the agreement touted just hours before … was in shambles.

 

An incendiary mix of presidential politics, delicate dealmaking and market instability played out Thursday in a tableau of high drama … McCain's presence was only one of the complicating factors. Sen. Barack Obama played his part, with a hectoring performance behind closed doors at the White House. …

 

"If there is a deal with the House involved, it's because of John McCain," Graham, one of the Arizonan's closest friends in the Senate, said yesterday.

 

The fact is, there was never a deal until Sunday, and not just because the House Repubs felt they were being railroaded into accepting the administration’s untenable socialistic solution. It is not politically prudent for either McCain or Obama to rubberstamp Bush’s solution – nor is there historical precedent for presidential candidates to hamper their maneuverability to resolve a crisis should they win the White House, according to an article by Peter Baker in the The New York Times. . For instance, president-elect Franklin D. Roosevelt blew off Herbert Hoover’s repeated attempts to get him to sign a joint declaration ordering a four-day bank holiday to prevent a run on deposits, but then put Hoover’s proposal into practice two days after being sworn in.  

 

Both candidates announced they are backing the compromise legislation – though, predictably, neither wants to give the other credit for having any role in the process.

[Correction: Peter Baker’s article was published by The New York Times, not The Washington Post, as the original version of this post had it.]

 

 

The Debate Over The Debate

 

Friday evening found The Stiletto in the bar at The Watergate - of all places - to watch the first presidential debate between Sens. John McCain (R-AZ) and Barack Obama (D-IL) at the University of Mississippi in Oxford. The first 39 minutes of the 90 minute debate were devoted to economic issues and the proposed bailout plan.

 

Natch, both sides declared victory but it seemed to The Stiletto that it was pretty much a draw with Obama acquitting himself credibly during the portion of the debate devoted to the economy, and McCain shredding Obama’s credibility during the portion of the debate devoted to foreign affairs and national security.

 

Obama’s debate prep clearly paid off - he was smooth, unruffled and kept the hemming and hawing to a minimum - though The Stiletto agrees with Sean Hannity’s assessment that he sometimes came off as a college student in a debate class who had “studied his lines” and was regurgitating them whereas McCain had “real-life experience” informing his answers (“I've been to Waziristan. I can see how tough that terrain is.”) To be sure, lefty pundits have said that Sarah Palin is merely parroting the facts and figures crammed into her head by McCain campaign handlers – but clearly, Obama is vulnerable to the same criticism.

 

Perhaps Obama seemed like student because “[m]any of McCain's answers were preceded with belittling references to Obama as if he were talking to a college freshman way out of his depth,” according to Washington Post TV critic Tom Shales. Interestingly, Shales had previously cast Charlie Gibson in the role of a college professor trying to trip up Palin during his interview with her.

 

For his part, Washington Post columnist David Broder thinks McCain came off as the alpha male, in part because there was “an imbalance in the deference quotient between the younger man and the veteran senator - an impression reinforced by Obama's frequent glances in McCain's direction and McCain's studied indifference to his rival.” Broder also noticed that McCain “flung the adjectives that stick in a listener's mind,” such as “naïve and therefore dangerous” – and thus appeared to be the more aggressive debater.

 

Still, The Stiletto found McCain oddly subdued during the discussion of the bailout. He should have explained to viewers why he suspended his campaign, and what his role was in getting rebellious House Republicans to stick to their principles without losing sight of the bigger picture.

 

Debate highlights that stuck with The Stiletto:

 

† Obama repeatedly said McCain was “absolutely right” or “right” (“I think Senator McCain's absolutely right that we need more responsibility”; “Senator McCain is absolutely right that the earmarks process has been abused”; “John mentioned the fact that business taxes on paper are high in this country, and he's absolutely right”; “John is right we have to make cuts”; “Senator McCain is absolutely right that the violence has been reduced as a consequence of the extraordinary sacrifice of our troops and our military families.”)

 

Obama also said McCain was wrong on Iraq (“[Y]ou said it was going to be quick and easy. You said we knew where the weapons of mass destruction were. You were wrong. You said that we were going to be greeted as liberators. You were wrong. You said that there was no history of violence between Shia and Sunni. And you were wrong.”)

 

It goes without saying that right-wing pundits focused on the number of times Obama conceded McCain was right, whereas left-wing pundits ignored that and preferred to highlight Obama saying McCain was wrong on Iraq.

 

For his part, McCain repeatedly said Obama did not understand the issues (“I don't think that Senator Obama understands that there was a failed state in Pakistan when Musharraf came to power”; “What Senator Obama doesn't seem to understand that if without precondition you sit down across the table …”; and “Senator Obama still doesn't quite understand - or doesn't get it - that if we fail in Iraq, it encourages Al Qaida.”)

 

† Neither candidate seemed willing or able to say what campaign promises they would have to jettison because of the bailout – and Obama’s insistence on increasing funding for early childhood education was particularly tone-deaf:  

 

Lehrer: [O]ne of you is going to be the president of the United States come January … in the middle of a huge financial crisis that is yet to be resolved. And what I'm trying to get at is how this is going to affect you not in very specific - small ways but in major ways and the approach to take as to the presidency.

 

McCain: How about a spending freeze on everything but defense, veteran affairs and entitlement programs. … I think we ought to seriously consider with the exceptions the caring of veterans national defense and several other vital issues.

 

Obama: The problem with a spending freeze is you're using a hatchet where you need a scalpel. There are some programs that are very important that are underfunded. I want to increase early childhood education and the notion that we should freeze that when there may be, for example, this Medicare subsidy doesn't make sense.

 

In future debates, the moderators will have to pin them down on this point, because in 2011 when the first wave of baby boomers start getting Social Security payments and Medicare benefits the Social Security trust fund surplus will no longer be available as a piggy bank that can be raided to fund a panoply of government programs.

 

† McCain finally came alive during the foreign policy portion of the debate and took issue with Obama’s answers that showed his Dem rival to be out of his depth. For instance, in response to Obama’s oft-repeated charge that we shouldn’t have entered into a war on Iraq to begin with, McCain said:

 

The next president of the United States is not going to have to address the issue as to whether we went into Iraq or not. The next president of the United States is going to have to decide how we leave, when we leave, and what we leave behind. …

 

Senator Obama didn't go to Iraq for 900 days and never asked for a meeting with General Petraeus. …

 

Senator Obama is the chairperson of a committee that oversights NATO that's in Afghanistan. To this day, he has never had a hearing.

 

Obama had nothing to say in his defense and instead cited running mate Joe Biden’s foreign policy expertise.

 

† In contrast, when Obama said McCain was wrong about Iraq, in part because the surge was merely “a tactic designed to contain the damage of the previous four years of mismanagement of this war,” McCain let him have it:

 

I'm afraid Senator Obama doesn't understand the difference between a tactic and a strategy. … There is social, economic progress, and a strategy … of going into an area, clearing and holding, and the people of the country then become allied with you. They inform on the bad guys. And peace comes to the country, and prosperity. That's what's happening in Iraq, and it wasn't a tactic.

 

† In response to Obama’s insistence that we have to “deal with” Pakistan, McCain said:

 

Now, on this issue of aiding Pakistan, if you're going to aim a gun at somebody, George Shultz, our great secretary of state, told me once, you'd better be prepared to pull the trigger.

 

I'm not prepared at this time to cut off aid to Pakistan. So I'm not prepared to threaten it, as Senator Obama apparently wants to do, as he has said that he would announce military strikes into Pakistan.

 

We've got to get the support of the people of - of Pakistan. He said that he would launch military strikes into Pakistan.

 

Now, you don't do that. You don't say that out loud. If you have to do things, you have to do things, and you work with the Pakistani government.

 

† And then there was the brouhaha over Obama misunderstanding or mischaracterizing Henry Kissinger’s position on direct negotiations with the leaders of rogue nations:

 

What Senator Obama doesn't seem to understand that if without precondition you sit down across the table from someone who has called Israel a "stinking corpse," and wants to destroy that country and wipe it off the map, you legitimize those comments.

 

This is dangerous. It isn't just naive; it's dangerous. And so we just have a fundamental difference of opinion. …

 

We sit down with Ahmadinejad, and he says, "We're going to wipe Israel off the face of the Earth," and we say, "No, you're not"? Oh, please.

 

† McCain also got in a zinger about Obama’s presumptuousness (“I'm not going to set the White House visitors schedule before I'm president of the United States. I don't even have a seal yet.”), though it may have been inside baseball (third item) to everyone but political junkies and pundits.

 

Finally, despite voters’ concerns that moderator Jim Lehrer would be biased in favor of Obama, a post-debate Rasmussen telephone survey found that 76 percent thought he was neutral. That same poll found there was no clear winner in the debate: 36 percent gave it to Obama, 33 percent to McCain, and 31 percent were not sure.

 

Shales thought Lehrer “did a very accomplished job, willing to interrupt or challenge the candidates when they danced around an issue rather than addressing it” and his colleague Chris Cillizza pronounced Lehrer “the PERFECT person to moderate these debates. … Lehrer seemed perfectly content to step out of the conversation and let McCain and Obama got at one another.”

 

That’s not how The Stiletto and her fellow barflies at The Watergate saw it at all. We unanimously panned Lehrer as being too passive (one wanted to know if he was on tranquilizers) – so much so that he sometimes lost control of the proceedings. For instance, the two candidates talked over each other several times, and twice by The Stiletto’s count Obama actually gave Lehrer permission to continue his moderating duties. Plus, none of us felt Lehrer covered much new ground and phrased his questions in a way that allowed both candidates to reprise chunks of their stump speeches in lieu of fresh answers. For her part, The Stiletto longed for Rick Warren’s approach to questioning the candidates.

 

After the debate, The Stiletto met a couple of cute guys wearing T-shirts that said “Pirates For McCain.” Of course, she had to find out what that was all about. It’s an inside joke; the McCain campaign has been likened to a pirate ship with “a feisty captain, rhetorical saber in hand, leading a fiercely loyal crew.” In contrast, the Bush campaign was a cruise ship. But given Obama’s penchant for engaging in ageism, the last thing McCain wants is to be associated with is a cruise ship. Aaaarrrrgggghhhh!

 

By the way:  As The Stiletto was walking though Dulles International Airport to catch her flight home she passed a shop selling campaign caps, mugs, T-shirts, fridge magnets and the like. Outside the entrance stood life-sized cardboard figures of John McCain, Sarah Palin and Barack Obama. No Joe Biden. Seems he’s just not a draw.