The Bush Administration continues to aggressively push its Wall Street bailout plan on Congress, where it’s reaching a surprising amount of resistance. Congressional Leaders in the House and Senate are still trying to cut a deal with Treasury Secretary Hank Paulson, but the bailout seems to be getting more unpopular by the day with rank-and-file members of Congress from both parties.
Democrats are unhappy because the bailout favors Wall Street over Main Street. Republicans are unhappy about the $700 billion cost and expansion of "big government."
Matt Stoller of Open Left has been doing an excellent job of monitoring how members of Congress are reacting. Here’s a great clip from Ohio Democratic Representative Marcy Kaptur:
On the other side, Republican web strategist Patrick Ruffini has been urging Republicans to vote against the bailout. "God Himself couldn’t have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration," Ruffini blogged earlier this week.
The economic downturn has thus far benefitted the Democrats politically, but the politics of the bailout are still explosive. Ruffini is right that Republicans could help themselves by voting against a huge and unpopular deal while Democrats could also get in trouble, ironically, for aligning themselves too closely with the Administration. However, neither party wants to be blamed for doing nothing if the economy tanks further, upping the likelihood that some sort of plan might pass.
Thus far, Obama and McCain have sounded similar notes on the subject, calling for more oversight and consumer protections but cautiously supporting the Treasury/Fed effort.