If you want to know whether a bailout deal is possible, watch this space: www.house.gov/hensarling/rsc/.
That's the URL for the House Republican Study Group, a group of 100 conservative House members leading the resistance to the Bush bailout. If they're not on board, House Speaker Nancy Pelosi is unlikely to push a bailout through, even if she can muster enough democratic and moderate republican votes. After all, why give 100 House republicans a potent anti-Wall Street message to go home and beat you up over?
House conservatives are willing to do a deal, but only if it does not involve the actual government purchase of bad debt. Their spiritual leader, former House Speaker Newt Gingrich, put out what at first glance seemed to be a ringing endorsement of John McCain's bailout plan bailout effort Wednedsay.
Gingrich called McCain's move “the greatest single act of responsibility ever taken by a presidential candidate and rivals President Eisenhower saying, ‘I will go to Korea.’” But read the fine print, because there were some big IFs. IF, wrote Gingrich, the bill includes an economic growth component (tax cuts?), and energy solution (drilling?), and a "work-out" not a bail out for the financial sector.
The first two are killers: democrats are not going to ram through a package that gives the GOP what it wants just to get a bill passed. And what does a "work out" mean? Well we know what it doesn't mean; it doesn't mean the US government lifting the burden of bad decisions off of Wall Street and putting it onto the taxpayer, even if the White House says the taxpayer could actually profit in the long run.
As Hensarling himself put it Wednesday:
"I can put a gun to my neighbors head, take his college fund for his children, lace a bet on a roulette table in Las Vegas, and maybe, maybe, I'll triple his money. But ... that is not a risk that my neighbor voluntarily undertook. This is not a risk that the taxpayer wishes to voluntarily undertake."
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