In a White House meeting on Thursday, President Bush gave marching orders to about a dozen business executives: Lobby members of the House to support the $700 billion relief package for the troubled financial sector.
Bush himself has been calling members by phone this week to push the plan, which the House dramatically rejected during a floor vote on Monday.
The meeting comes one day before the expected Friday redo of the earlier House vote on the rescue plan.
That day, the stock market dropped by 777 points, the largest single-day point loss ever on the Dow Jones Industrial Average. The freefall resulted in a loss of about $1 trillion in stock value, although some of those losses were made up in a rally the following day.
Still, business executives are worried about a repeat if the House again rejects the bailout plan. Even more worrisome is the further constriction of the credit markets that allow American commerce to progress.
Since the dramatic events on Monday, the Senate voted Wednesday night 74-25 in favor of a modified bailout plan. Josten and a host of business executives are furiously lobbying to maintain that momentum.
Josten emphasized in the call with reporters following the White House meeting how seriously the larger business community is taking the House vote on Friday, describing it as a “full-court press.” Josten said he has worked with all 3,000 of the group’s local affiliates to put pressure on Washington to act.
“That is the game we are playing until this game is done,” Josten said. “We lost Monday. Look, in this game, part of the way to winning is losing. I have no intention of losing again.”
The Chamber also is funding a radio ad campaign and, along with other trade associations, has bought print ads to support the package.
Though the Chamber has been active in the lobbying effort, it is hardly alone in its support for the Wall Street rescue. In fact, it seems almost all of K Street has mobilized to secure its passage.
In a letter Thursday, close to 60 trade associations thanked House lawmakers who voted for the rescue measure on Monday. The business groups, including the American Chemistry Council and the National Association of Realtors, added a thank-you “in advance for your continued support.”
Many other groups have warned lawmakers that they plan to “score” the vote on their own legislative report cards, which could affect members’ future ability to raise campaign cash.
It is continued access to cash through the credit markets that has added urgency to the campaign in recent days. Chamber economists worry that without a rescue plan, the economy could slip into a lengthy recession like Japan suffered through for a decade. Reports from local chapters that credit lines are already freezing up are adding to that concern.
“If we superimpose a credit crunch on what we are seeing, we are going to get a downturn that will be long and very, very difficult to get out of,” said Marty Regalia, vice president and chief economist for the Chamber.
About 74 percent of the Chamber’s members are small businesses, and many are struggling to refinance loans to stay afloat. Some business owners have already had to lay off workers as the economy worsens.
Others are warning they will have to cut their staff if Congress rejects the bailout and the credit markets stay frozen.
In order to win more support, Senate leaders added a number of inducements, such as raising the cap for federal insurance backing bank deposits, adding parity of insurance coverage for mental health patients and fixing the Alternative Minimum Tax. From the original three-page proposal submitted two weeks ago by Treasury Secretary Henry Paulson, the bill has now grown to 451 pages.
“When you start to look at the different elements of this package, it gives us greater opportunity for points of discussion,” Josten said.
One concern, however, is that Democratic conservative Blue Dogs will drop their support for the bill out of concern that costs of the additions are not offset with additional revenue-raisers or spending cuts elsewhere in the budget. Josten said the Chamber is specifically working with local affiliates in the Blue Dogs’ districts to pressure them to support the bill.