Economy & Budget

After meeting with President Bush, John McCain, and congressional leaders this afternoon, Barack Obama says it's up to Bush and Treasury Secretary Henry Paulson to work with House Republicans and bring them on board if sides are to agree on a bipartisan deal for a Wall Street bailout package.

"The challenge over the next 24 hours or so is for the president and Secretary Paulson to work with House Republicans," Obama said in an interview on Fox News.

When asked how far Democrats and Republicans are from working out a bipartisan deal, Obama said progress has been made on key areas of focus, but that House Republicans are holding out.

"I think we've got a chance to go ahead and solve this problem," Obama told Fox News when asked about today's meeting.

"On all those fronts we've seen some progress," Obama said, noting that "there seems to still be some resistance among House Republicans."

House Minority John Boehner (R-Ohio), who attended this afternoon's meeting, was adamant throughout the day that House Republicans have not agreed on anything. Lawmakers on key committees met this morning to negotiate a bipartisan agreement, and Boehner insisted that no final deal could come of that meeting because House Republicans were not on board.

House Speaker Nancy Pelosi (D-Calif.) on Thursday detailed a conversation with GOP presidential nominee John McCain, in which she rejected the Arizona senator

Sen. Jim DeMint (R-S.C.) said Thursday he won't filibuster the financial bill, but is leaning against the financial bill and described it as "pure socialism."

"No, but I have said that I'd like a chance to read it and to make sure we let the American people know what it is, so it's not a secret vote," DeMint told reporters after leaving a Senate GOP lunch attended by Sen. John McCain (R-Ariz.).

DeMint, a staunch fiscal conservative, also defended McCain against Democratic claims that McCain's presence at the Capitol Thursday was interfering with delicate, last-stage talks on the financial bill. DeMint said McCain has particularly helped persuade reluctant House Republicans to support the bill.

"I think the fact that McCain drew so much attention to theis has really helped people make some decisions and work together," DeMint said. "What we've done is been able to move away from the president's plan, which I think is just pure socialism as far as government-run economy. We need to move back from that, and hopefully we can use loans. I hope McCain will talk about the need for Treasury to do this as loan system that help these banks work out of this mess rather than a bailout solution where we're throwing money at it."

-J. Taylor Rushing

Congressional leaders announced Thursday that they have a tentative bailout deal in place.

"We've reached a fundamental agreement on a set of principles," said Sen. Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee.

Dodd was joined at a news conference by Sen. Robert Bennett (R-Utah), also a member of the Senate Banking Committee, House Financial Services Committee Chairman Barney Frank (D-Mass.), and House Financial Services Ranking Member Spencer Bachus (R-Ala.).

Dodd said that while Treasury Secretary Henry Paulson will get the authority and funding he needs to act, the agreement includes "effective oversight" of how the bailout will be executed and addresses issues for struggling homeowners and pay for executives of companies that will benefit from the plan.

Dodd, however, did not go into details, saying that the deal still had to be taken to Democratic and Republican members in both chambers.

"We'll obviously be talking to our respective leadership as well. But we're very confident that we can act expeditiously. We think we've done a good job in arriving at that," Dodd said.

Bennett said the he expects that the bill will pass the House and the Senate and that the president will sign it.

Frank agreed: "And, yes, we are on track, I believe, to pass this. The market should be calmed down."

House Minority Leader John Boehner (R-Ohio) denied that Republicans have agreed to any deal on a Wall Street bailout plan today, as members of key House and Senate committees met this morning to negotiate.

"As I told our Conference this morning, there is no bipartisan deal at this time. Read more...

The chorus of conservatives trying to keep John McCain from backing the $700 billion bailout plan keeps growing.

"If John McCain supports this bailout, he will lose all of the goodwill and support he has gained from conservatives by picking Governor [Sarah] Palin (R-Alaska) as his running mate," wrote conservative direct-mail guru Richard Viguerie in a blast e-mail.

Viguerie said that the bailout for banks would be followed by more bailouts for carmakers, credit card companies and other troubled businesses.

"It's a death spiral for the American economy, and conservatives refuse to go along for the ride," he said.

A GOP House member added that McCain's possible support of the bailout bill is "terrible."

"McCain would do well to remember that Americans don't like the Paulson plan and Republicans and conservatives hate it," the member said.

Conservative bloggers on The Corner, RedState and elsewhere have already weighed in on the plan, and they don't like it.

The recent wave of Wall Street collapses marks a "sink-or-swim" moment for America, Sen. Hillary Rodham Clinton (D-N.Y.) writes in an op-ed in today's Wall Street Journal.

"This is a sink-or-swim moment for America. We cannot simply catch our breath. We've got to swim for the shores. We must address the conditions that set the stage for the turmoil unfolding on Wall Street, or we will find ourselves lurching from crisis to crisis," Clinton said.

Clinton called for broader reforms than the current $700 billion bailout proposal, including a new Home Owners' Loan Association (HOLC), reminiscent of the original association created in 1933, to purchase mortgages from failing banks and modify their terms.

The current crisis demands fundamental economic fixes to protect taxpayers and keep homeowners from facing foreclosure, Clinton said.

Former President Bill Clinton pushed back against the suggestion that the current economic crisis happened under his watch.

Clinton was asked on NBC's "Today" to respond to President Bush's suggestion in his televised address Wednesday that the financial system's problems began more than a decade ago, during the Clinton administration.

Bush said: "Well, most economists agree that the problems we're witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business."

Here's how Clinton responded:

Well, I think he's suggesting that, when we -- I signed a bill [the 1999 Gramm-Leach-Bliley Act] that the banking industry wanted to let them get into securities issuance there. There are some people who believe that that bill enabled them to somehow participate in some of the riskier housing investments. I disagree with that. That bill primarily enabled them to, like the Bank of America, to buy Merrill Lynch here without a hitch. And I think that helped to stabilize the situation.

I think that the main thing that you could blame the Democrats for, maybe, is that we should have made more of the problems of Fannie Mae and Freddie Mac and maybe the -- and tried more aggressively to regulate derivatives. But this thing really took off when the SEC, under this administration, exercised less oversight and they got rid of something called the uptick rule, which enabled betting down... on housing stocks to go crazy.

Clinton, however, sounded reluctant to take sides in the debate over debates in the presidential campaign. When asked by NBC's Matt Lauer whether John McCain was playing politics with the economic crisis by suspending his campaign Wednesday and calling for a delay to Friday's debate, Clinton said that McCain wasn't.

First of all, I don't have a judgment about whether it would be a good or bad thing to do. But we know -- I mean, he wanted actually more debates, so we know he wasn't afraid of the debates.

I think he's probably looking for some way of, once again, to say to the American people, "Hey, I'm not a traditional Republican. And I do take this seriously." Because otherwise this makes it much, much more difficult for him to win because this is associated with lax regulation and the absence of economic activity in this period.

I think -- but I think, you know, they both issued a statement last night, which I thought was a good thing, their joint statement. Because I really do believe that if it looks like they're playing politics with this and there's a delay, then that's bad for the confidence.

I think, if it looks like -- they're going back to Washington, which apparently they both are... at the invitation of the president, to get their briefing, they will participate in the lawmaking, the work of their jobs, I think we'll be all right. They've been -- they've -- both of them have gone out of their way, I think, not let this whole thing get too much caught up in the politics.

Senate Majority Leader Harry Reid (D-Nev.) on Tuesday called out Republican presidential nominee John McCain to take a position on a massive bill aimed to bail out Wall Street.

Fresh skepticism over the Bush administration's $700 billion proposed bailout plan has moved at least one GOP senator to suggest the plan will be blocked in the Senate.

"There is a good chance it will be stopped," said Sen. Jim Inhofe (R-Okla.), soon after Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke spoke before the Senate Banking Committee to lobby senators for support. Inhofe said he was still digesting the committee's testimony, but said "my first reaction is not positive at all."

Specifically, Inhofe said the plan's cost and rushed timetable are leaning him against supporting it. Read more...