Media reports are describing yesterday's 228-205 House vote against the financial bailout plan as a stunning surprise that adds to the uncertainty and sense of gloom surrounding the world's economy. On ABC World News, George Stephanopoulos mused last night, "You had this economic crisis, the market's bearing down, you had the President of the United States, the Speaker of the House from another party, united Congressional leadership across the board, and both presidential candidates giving cover, and the bill still went down. We have never seen anything like this." Moreover, NBC Nightly News reported, "Congress has left town for the Jewish holiday. There is no plan."
A number of media analyses are attempting to determine what will be the next step as President Bush and Hill leaders try to move the debate forward. The Financial Times says "the best hope for supporters of the bail-out on Capitol Hill and the Bush administration for the time being appeared to be that rank-and-file House Republicans," but "if House Republicans still cannot be brought on board, the administration may have to turn to the Democrats, offering concessions to make up for pressing ahead with the legislation unilaterally. These concessions could start with dropping the White House veto threat on a second economic stimulus bill, and reinserting provisions such as bankruptcy reform and directing 20 per cent of bail-out profits to an affordable housing fund which were stripped out on Saturday night." The Wall Street Journal reports that "for now," Speaker Pelosi "is committed to a 'bipartisan bill,' a Democratic leadership aide said."
On NBC Nightly News, CNBC's Steve Liesman said, "Just so you know, I spoke with the White House this evening. They were meeting with House and Senate leaders again looking for that unknown way forward here," and one "idea is maybe the Democrats do something on their own with all the stuff they wanted." Newt Gingrich, appearing on Fox News' On The Record last night, also predicted that Pelosi is likely to introduce another version of the bill later this week that will garner more Democratic support by stripping elements added by Republicans and adding others that will appeal to liberals. In an editorial, the Wall Street Journal also cautions Republicans about that possibility.
House Leaders Also Ponder "Senate Option." The Politico, meanwhile, says "congressional leaders" are also considering other "ways to recover -- possibly by starting anew in the safer Senate." Rep. Rahm Emanuel, chairman of the House Democratic Caucus, told The Politico, "The Senate should go first: Act on this bill, attach it to another and send it back to the House." The Politico adds "the Senate option is one that House Financial Services Committee Chairman Barney Frank (D-Mass.) had considered even before Monday's defeat. And while making no commitment, Senate Minority Leader Mitch McConnell (R-Ky.) did not rule out working with Democrats to facilitate quick consideration."
Uncertainty, Gloom Envelope Global Markets Reporting on the House vote, the New York Times says on its front page that "the stunning defeat of the proposal...lowered a fog of uncertainty over economies around the globe. ... By the end of day, the Dow had fallen almost 778 points, or nearly 7 percent, to 10,365. Credit markets also remained distressed, with bank lending rates rising and investors fleeing to the safety of Treasury bills." The AP notes that in addition to the Dow, "broader stock indicators also plummeted. The Standard & Poor's 500 index declined 106.62, or nearly 9 percent, to 1,106.39. It was the S&P's largest-ever point drop and its biggest percentage loss since the week after the October 1987 crash." The Nasdaq "fell 199.61, more than 9 percent, to 1,983.73, its third-worst percentage decline. The Russell 2000 index of smaller companies fell 47.07, or 6.7 percent, to 657.72." Reporting on the market losses, ABC World News said last night, "It was like watching a train wreck in slow motion, today." McClatchy, AFP, Wall Street Journal, Washington Post, Financial Times, Washington Times and Christian Science Monitor (9/30, Trumbull) also run stories on the stock numbers, portraying a mood of near-panic on Wall Street following the House vote. Highlighting the day's dramatic losses, the New York Times notes "over a trillion dollars vanished from Wall Street on Monday."
Today, that sense of panic appears to be spreading globally. USA Today reports "stocks plummeted across Asia in panic selling following the US House's rejection of a $700 billion Wall Street bailout." Japan's benchmark Nikkei 225 index "nose-dived more than 544 points, or 4.6%, to 11,199.07" while "Hong Kong's Hang Seng Index plunged 5.5%. In the South Korean capital Seoul, the Kospi index lost 3.5%. And in Singapore, the Straits Times Index fell nearly 3%." The Washington Post, in a front-page story headlined "Contagion Spreads, Moods Abruptly Shift," says "the turmoil that began on Wall Street now spans the globe."
The Washington Post notes that after the bailout bill was defeated yesterday in the House, Republicans "put the onus on Speaker Nancy Pelosi (D-Calif.), asserting that she failed to bring on board 95 fellow Democrats who voted against the bill and charging that a 'partisan' speech she delivered at the end of today's debate turned off many Republicans." House Minority Leader John Boehner "charged that the bill could have passed today 'had it not been for the partisan speech that the speaker gave on the floor of the House.'" On the CBS Evening News, Pelosi was shown saying, "They [Republicans] claim to be free market advocates when it's really an anything-goes mentality. No regulation, no supervision, no discipline."
On Fox News' The O'Reilly Factor, Karl Rove said Pelosi's comments "had a huge impact," calling her speech "five minutes of the most vicious partisan rhetoric. This is the kind of thing that you expect to hear on the floor of the House from some, you know, insignificant partisan back bencher. You do not expect to hear it from...the Speaker of the House whose responsibility it is to try and set the bipartisan tone to get this bill passed. I was appalled by this."
However, the Washington Post reports that while "Republicans initially lashed out at" Pelosi, "later, in interviews after tempers cooled, GOP leaders said they had been fighting an uphill battle from the start -- too many conservatives rejected the idea of a large, taxpayer-funded intervention, and too many moderates came from swing districts where constituents were up in arms over the bailout." The Washington Times, under the headline "Short Of Votes, Bailout Backers Gambled On Arm-twisting," also reports "Democrats and Republicans knew they didn't have the votes Monday morning to pass the Wall Street bailout bill but went ahead anyway, risking the markets on the hope that reluctant lawmakers could be steamrolled." Adds the Times, "They goofed: The votes didn't materialize, the $700 billion bill failed and the stock market lost 7 percent of its value in one day, damaging the American economic psyche." The Hill, however, says that "when Minority Whip Roy Blunt (R-Mo.) went to the floor on Monday, he anticipated that 75 House Republicans would vote for the revamped financial rescue package. But only 65 voted for it."
Weak President A Factor In Bill's Defeat After yesterday's vote, notes the AP, President Bush "vowed to keep pressing on in search of a way to help the US economy." In his statement, Bush said, "We'll be working with members of Congress, leaders of Congress, on the way forward." But some media reports last night and this morning are casting yesterday's House vote against the financial bailout plan as a reflection of Bush's "loss of influence" as he enters the final stretch of his tenure. ABC World News referred to a "political disaster for" Bush, while the New York Times says on its front page, "If there was any doubt that President Bush had been left politically impotent by his travails over the last few years and his lame-duck status, it was erased on Monday." The Los Angeles Times refers to "a stunning setback for the president," while the Financial Times, in a story titled "Humiliation For Bush As Power Wanes," calls the vote "a staggering setback for...Bush." A similar piece in the Washington Post, headlined "Vote Underscores Bush's Loss Of Influence," refers to the vote as "the biggest legislative defeat of Bush's tenure," one that "underscored" his "vanishing influence."
Opinion Pages Criticize Congress, GOP Caucus. Editorials and opinion pieces in major newspapers tend to blame House Republicans for the defeat of the bailout measure. Conservative "free market zealots" are being roundly criticized from both the left but also from the right -- notably the Wall Street Journal editorial board and the New York Times' David Brooks, who goes so far as to suggests that yesterday's vote imperiled the very existence of the Republican Party. The New York Times' David Brooks says House Republicans "led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party." The New York Times editorializes, "After nearly eight years of voting in virtual lock step with President Bush on everything from tax cuts to torture, House Republicans decided on Monday to break ranks on the survival of the nation's financial system. ... Republican no votes were rooted less in analysis or principle than in political posturing and ideological rigidity." The Los Angeles Times and Washington Post also criticize Congress and the GOP.
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The failure of the bailout bill in the House left the two presidential candidates working to spin the outcome to their advantage. Bloomberg's "Money and Politics" broadcast that Sen. John McCain "took credit for positive changes he said were made to the bill while at the same time blaming its defeat on Barack Obama and the Democrats. ... Obama, meanwhile, reacted to the vote and the market sell-off while at a rally near Denver. He urged calm and assured supporters that a rescue plan would get done." The AP reports McCain "said Obama and his allies had 'infused unnecessary partisanship' into the effort to steady the economy." McClatchy reports McCain "blamed Barack Obama and the Democrats for Congress' failure to pass a $700 billion Wall Street bailout on Monday, while Obama avoided blame games and instead implored Americans to 'stay calm.'"
However, most coverage saw the defeat of the bill as a blow to McCain. Fox News' Special Report reported McCain "expected the measure to pass and was left to mourn its defeat." The New York Times reports that besides the "stockholders whose portfolios were ravaged Monday afternoon, the one person with the most riding on the bailout bill that collapsed in Congress may have been" McCain. When the "deal fell apart on the House floor Monday, in no small measure because most of the chamber's Republicans balked at voting for it, the McCain campaign worked to contain the potential for damage." The Wall Street Journal says McCain "arguably has more to lose in this crisis, after inserting himself into the negotiations late last week with a dramatic move to suspend his campaign." The Washington Post reports McCain "found himself in a particularly awkward position after bragging about his role in building a coalition behind the rescue package yesterday morning -- hours before it was defeated."
In contrast, the AP reports Obama's "calmly assured response to the economic crisis and solid debate performance have bolstered the view among voters that he is ready to be chief executive, a crucial threshold he needs to cross to win the presidency." The "improved standing for Obama, a candidate still not well-known, was captured by polling this weekend, in interviews with Democrats and Republicans and by the response of his rival, John McCain, who intensified his criticism that the young senator lacks the experience and judgment to lead the nation."
Due to the coverage of yesterday's House vote and the stock market freefall, the news that Attorney General Mukasey has appointed a prosecutor to probe the 2006 dismissals of nine US attorneys got only very brief mentions on the network news broadcasts. Likewise, this morning's papers give the story much less prominence than may have been expected during a less extraordinary news cycle. Fox News' Special Report reported that Nora Dannehy, the acting U.S. attorney in Connecticut, "will be investigating several instances of potential criminality including possible charges of obstruction of justice, wire fraud and false statements."
According to the Wall Street Journal, Mukasey "said the report showed that the firings were done in a 'haphazard, arbitrary and unprofessional' manner. The report says former attorney General Alberto Gonzales "bears 'primary responsibility' for not supervising his then-chief of staff, Kyle Sampson, who managed the dismissals." The Washington Post, Washington Times, USA Today, New York Times and McClatchy also report the story.
USA Today reports Gen. Ray Odierno, new commander of US forces in Iraq, contends "dramatic security gains made in Iraq over the past year could be jeopardized if its government doesn't improve essential services such as electricity and bring together rival political and religious factions." Odierno also "told USA TODAY he was confident he could recommend pulling more US troops from Iraq next year but called for a cautious, 'deliberate' approach 'to make sure that we don't step backwards.'"
McClatchy, meanwhile, reports from Baghdad that while "security across Iraq is better than it's been in years, and this Ramadan brought a much smaller upswing in violence than previous ones did...in recent weeks, the number of roadside bomb attacks is increasing, and so are assassinations. ... It's not clear whether the changes are by-products of Ramadan that will go away once the holiday ends, or whether they're signs that political frustrations are beginning to erode Iraq's hard-won security gains."
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The AP examines whether Gov. Sarah Palin has become an asset or a liability for John McCain. Palin "still draws huge crowds and energizes McCain's drive for the White House. Yet a whirlwind month after he made her his running mate, Palin is starting to seem very, very vulnerable." The New York Times reports Palin "heads into a critical debate facing challenges from conservatives about her credentials, signs that her popularity is slipping and evidence that Republicans are worried about how much help she will be for Mr. McCain in November."
The concern is seen as increasing the importance of Thursday's debate. Fox News' Special Report reported that "much of the McCain campaign brain trust is focusing on the vice presidential debate Thursday." The Washington Post says the debate is "a potentially pivotal event in what has been a whirlwind since" Palin "joined the Republican ticket." The AP reports that in a debate during her gubernatorial race, Palin's "engaging disposition" was more effective than "facts and figures," adding that Palin and Biden "each bring distinctive qualities and vulnerabilities" to Thursday's debate. Biden, the AP adds, brings an "agile yet unpredictable mind," while Palin has been "disparaged as something of a Podunk lightweight" in debates she went on to dominate.
The AP reports, "Convicted political fixer Antoin 'Tony' Rezko has been quietly visiting Chicago's federal courthouse, setting off speculation that he may be spilling secrets to federal prosecutors in return for a lenient sentence." Attorneys "with knowledge of the government's investigation of corruption in state government say they are convinced the key fundraiser for Gov. Rod Blagojevich and Sen. Barack Obama is either talking or about to do so." Two attorneys "said Monday they and other lawyers have been contacted by prosecutors seeking to check information that only Rezko could have told them."
National tracking polls continue to show a conflicting picture of the national race. The Gallup daily presidential tracking poll of 2,732 registered voters taken September 26-28 shows Obama leading McCain 50%-42%. The Rasmussen Reports automated daily presidential tracking poll for September 29 shows Obama leading McCain 50%-45%. However, the bipartisan George Washington University Battleground daily tracking poll of 1,000 likely voters shows McCain leading Obama 48%-46%, about where the survey has been for the last week. The poll surveyed 200 voters each night from September 22-25 and September 28.
Polls Show Tight Race In Florida A Rasmussen Reports automated poll of 500 likely Florida voters taken September 28 shows Obama and McCain tied at 47% apiece. McCain had a five point lead a week ago. A SurveyUSA automated poll of 599 likely Florida voters taken September 27-28 shows McCain leading Obama 48%-47%.
McCain Edges Obama In Ohio A Rasmussen Reports automated poll of 500 likely Ohio voters taken September 28 shows McCain leading Obama 48%-47%.
Two Polls Show Obama Up In PA A Muhlenberg College /Allentown Morning Call daily tracking poll of 581 likely Pennsylvania voters taken September 24-28 shows Obama leading McCain 49%-42%. A Rasmussen Reports automated poll of 500 likely Pennsylvania voters taken September 28 shows Obama leading McCain 50%-42%.
Obama On Top In Colorado A Rasmussen Reports automated poll of 500 likely Colorado voters taken September 28 shows Obama leading McCain 49%-48%.
Obama Up 3 In Virginia A Rasmussen Reports automated poll of 500 likely Virginia voters taken September 28 shows Obama leading McCain 50%-47%.
Obama Up 2 In North Carolina A Public Policy Polling (D) survey of 1,041 likely North Carolina voters taken September 28-29 shows Obama leading McCain 47%-45%.
Obama Up 10 In New Jersey A SurveyUSA automated poll of 611 likely New Jersey voters taken September 27-28 shows Obama leading McCain 52%-42%.
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Jay Leno: "As you know, the bailout was voted down," and people "are stunned. Nancy Pelosi was so shocked, if she could have made a facial expression, she would have."
Jay Leno: "I guess the big problem was the plan came in two parts and they couldn't agree on which part to implement first, the smoke or the mirrors."
Jay Leno: "Sarah Palin...watched the debate very closely," with "one eye" on it "and the other eye, of course, on Russia."
David Letterman: "A group of...mathematicians have discovered the largest prime number," which "has 13 million digits. ... Coincidentally, that is the price tag on the Federal bailout."
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