Bailout Update: Paulson is backtracking. (McClatchy)

[chill_wind]

Paulson seems to backtrack as bailout talks begin anew

By David Lightman and Margaret Talev | McClatchy Newspapers
Friday, September 26, 2008

WASHINGTON — Congressional negotiators got a new push from President Bush Friday morning as they resumed talks aiming at drafting a financial rescue plan — but renegade members of Bush's own party still showed no signs that they were ready to compromise.

It also appeared that Treasury Secretary Henry Paulson was raising questions about "principles" that negotiators thought had been agreed to on Thursday.

According to two people present, Paulson expressed reservations about limiting pay for executives at firms that benefit from the bailout, an equity stake for taxpayers in those companies and the provision that would allow the $700 billion to be available only in stages.

Paulson had indicated at hearings earlier this week that he supported some limits on executive pay, but apparently had questions about specifics.

The mood grew even more uncertain Friday, as House Republican Leader John Boehner of Ohio made it clear that top House GOP lawmakers were united in their bid to get more protection for taxpayers.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., had expressed surprise Thursday when House Republicans proposed an insurance plan to help troubled financial firms. But in a letter addressed to House Speaker Nancy Pelosi, D-Calif., Boehner stressed that no one should have been surprised.

"Over the last week, we have frequently discussed Secretary Paulson's proposal, and I have repeatedly expressed the need for improvements on behalf of myself and my Republican colleagues," the congressman wrote.

Despite that, he said, Democratic leaders repeatedly announced that a bipartisan deal was at hand even though the House GOP reservations had not been addressed. Each time, Boehner wrote, he made it clear that "any such deal did not include House Republicans."

(...)


Notably absent Thursday night were the rebellious Republicans who scuttled the negotiators' initial deal. Nor was GOP presidential nominee John McCain, who had returned to Washington saying he wanted to help spur bipartisan progress, present.The dissident Republicans, who include some members of the House leadership and top officials from key money committees, insisted that any plan must be far less expensive and involve less government intrusion into private markets than the negotiators' proposal, which would commit $700 billion to the rescue effort.

The House Republicans want instead to allow the government to provide insurance to companies that would buy troubled assets rather than spend taxpayer money on them. The firms would pay insurance premiums to the government in return for coverage.

Dodd said he was unfamiliar with the GOP alternative plan and was not inclined to back it. He and the other negotiators want to commit $700 billion in three phases. They would make $250 billion available immediately and another $100 billion when the Treasury Secretary sees the need. The rest would be available to the Treasury as needed unless Congress blocked the expenditure.

(...)

But Sen. Richard Shelby, the top Republican on the Senate Banking Committee, said on the same program that many members of Congress thought the plans so far do "nothing basically for the stressed mortgage payer. It does a lot for three or four or five banks."

http://www.mcclatchydc.com/251/story/53120.html

[Blue_In_AK]

1. Paulson wants to make sure all his good buddies

get the same wonderful deal he did when he left his former employer. It was so many millions, I couldn't even wrap my brain around it.

[louis-t]

2. I want every CEO from every bank getting bailed out to

go on TV and beg the American people to save his/her ass. I want them to explain why thier company went down the shitter. Who cares if it's all lies, I just want to see each of them sweat.

[mmonk]

3. The "insurance" is the taxpayer.

We don't have enough "insurance" if there is a run on the banks.

[glowing]

4. AND then today, Republican Sentators blocked extending unemployment

and increasing money for food stamps and food banks.. Yeah, they care about the homeowner..NOT!!

[dkofos]

5. They should start impeachment hearings on paulson.

That will shut him up.

[Supersedeas]

6. without an equity stake for taxpayers -- the bailout is a non-starter

[chill_wind]

7. in the meantime....another $488 billion for the Pentagon

(House bill earlier this week)

WASHINGTON (AP) – The House Wednesday took up a $630 billion-plus spending bill awarding the Pentagon a record budget while giving generous help to U.S. automakers and victims of hurricanes and floods.

The year-end budget measure also would lift a quarter-century ban on drilling for oil off the Atlantic and Pacific coasts and is flying under the political radar compared with a hugely controversial White House plan to bail out Wall Street.

(...)

The legislation came together in a remarkably secret process that concentrated decision-making power in the hands of just a few lawmakers, such as House Appropriations Committee Chairman David Obey, D-Wis., and House Speaker Nancy Pelosi, D-Calif.

The rush to the floor also ran counter to Democratic promises for more open disclosure of billions of dollars worth of earmarks, those home-state pet projects sought by most lawmakers. Anti-earmark watchdogs such as Rep. Jeff Flake, R-Ariz., and outside groups such as Taxpayers for Common Sense had but a few hours to scrutinize the legislation before debate began Wednesday morning.

The watchdog group discovered $6.6 billion worth of earmarks, including 1,997 totaling $4.8 billion in the defense portion alone. Among them was a long-standing request by the Iowa delegation for a new $182 million federal courthouse in Cedar Rapids, which was granted after flood damage this summer.


The secretive deliberations – and the intense spotlight cast on the separate Wall Street bailout – seemed to ensure that the spending measure would have a low profile. But that also meant Democrats will have to battle to remind voters of the gains made in funding for popular homeland security and veterans health programs.


more: http://washingtontimes.com/news/2008/sep/24/pentagon-budget-bill-hits-new-record/

*******************************************

The administration also succeeded in blocking Democrats' efforts to extend unemployment insurance, increase food stamp payments and help states deal with shortfalls in their Medicaid budgets.

Democrats doubled the money for heating subsidies for the poor and successfully pressed the White House for a generous $23 billion aid plan for disaster-ravaged states. The measure would avert a shortfall in Pell college aid grants and address problems in the Women, Infants and Children program, which delivers healthy foods to the poor.

Bush had threatened to veto bills that did not cut the number and cost of pet projects in half or cause agency operating budgets to exceed his request. Democrats ignored the edict as they drafted the plan and the White House has apparently backed down. Majority Leader Steny Hoyer, D-Md., suggested additional progress on the budget could have been made had Bush signaled such flexibility earlier.

http://ap.google.com/article/ALeqM5injFfO8MlwJfFFF_n29IR630N94AD93DBGBO0