海角大神

Washington 鈥� The tide is shifting over prospects in Congress for an epic $700 billion financial rescue package.

The reason: Voter anger over a 鈥渂ailout鈥� for Wall Street, which nearly shut down switchboards on Capitol Hill last week, is being eclipsed by new evidence that the credit crisis is hitting Main Street 鈥� and is on track to get worse.

鈥淚 got a call yesterday from a car dealer in Las Vegas saying, 鈥業 can鈥檛 buy any more cars.鈥欌�� If somebody buys a car, most of them can鈥檛 get a loan,鈥� said Senate majority leader Harry Reid on Wednesday.

The stunning defeat of the financial rescue plan in the House on Monday sent the stock market plunging and prompted renewed efforts on both sides of the aisle to find a compromise. At the same time, business groups stepped up an all-out offensive to muscle a bill across the line this week.

鈥淭he pain on Main Street is real. It鈥檚 being felt,鈥� says Bruce Josten, chief lobbyist for the US Chamber of Commerce, which has been mobilizing local chambers across the country to weigh in on this vote.

鈥淚t鈥檚 been a 24/7 exercise in improvisation. There鈥檚 no playbook for a crisis like this,鈥� he adds. 鈥淢embers are beginning to realize that, despite ideological reactions, they鈥檇 better do something.鈥�

In a bid to move a bill to President Bush鈥檚 desk by end of week, the Senate opted to vote on a compromise bill Wednesday evening. The new deal adds a package of tax breaks for business, as well as an increase in the government鈥檚 $100,000 cap on insuring bank deposits.

鈥淲e will have demonstrated to the American people that we could deal with the crisis in the most difficult of times, right before an election, when the tendency to be the most partisan is the greatest,鈥� said Senate Republican leader Mitch McConnell, who predicted that the revised plan would pass.

Meanwhile, House members across the political spectrum have been scrambling to add their own elements to a plan that many see as one that must pass this week.
It鈥檚 creating some odd ideological matchups. House progressives, on the left of the Democratic Party, announced on Tuesday that they are working with conservative Republicans on low-cost or no-cost alternatives to relieve credit markets. Such alternatives would have less risk to taxpayers than the $700 billion 鈥渂ailout.鈥�

鈥淭hat鈥檚 a common theme among members both who voted for the bill and who voted against the bill: Don鈥檛 put the taxpayers at risk,鈥� said Rep. Peter DeFazio (D) of Oregon, a member of the Congressional Progressive Caucus, at a briefing Tuesday.

The progressive caucus proposal includes rule changes in the Securities and Exchange Commission aimed at increasing liquidity, such as requiring the SEC to suspend fair-value accounting standards. (This so-called mark-to-market rule forces financial institutions to mark assets to the market value, even if that means dropping still-performing assets, such as some mortgage-backed securities, to zero.)

It鈥檚 a policy change also endorsed by many House Republicans. And in an independent move, the SEC on Tuesday posted clarifications that ease that rule.
GOP presidential nominee John McCain and Democratic nominee Barack Obama, who both spoke with Mr. Bush on Tuesday, urged Congress to add a provision increasing insurance coverage from the Federal Deposit Insurance Corp. (FDIC).

With two-thirds of the House Republican caucus on record opposing the Bush administration鈥檚 plan, the focus is on Senator McCain to help flip enough GOP votes in the House to pass a bill this week. 鈥淚t took Congress awhile, and there were costs to these delays. But they have awakened to the danger. And today, with the unity that this crisis demands, Congress will once again work to restore confidence and stability to the American economy,鈥� McCain said in a speech on the economy in Independence, Mo., on Wednesday morning.

Meanwhile, regulatory agencies such as the SEC and FDIC are giving a nod to reform proposals on Capitol Hill. This week, FDIC Chairman Sheila Bair said she would seek a temporary increase in the deposit insurance limit.

鈥淭he SEC came out [Tuesday] with a clarification on fair-value accounting that would focus on the economic value of the assets. It looks like the SEC is finally moving on this,鈥� says Melissa Netram, director of regulatory affairs at the Financial Services Roundtable, an industry-sponsored consortium in Washington.

鈥淏ut since Congress didn鈥檛 pass the [rescue] legislation on Monday, the credit markets, not just the stock markets, suffered. This hasn鈥檛 been clear to the American public,鈥� she adds. 鈥淭he plan isn鈥檛 just for Wall Street, but also for Main Street.鈥�

But lawmakers say the message from business groups suffering from a credit freeze is being heard, along with voters still angry over what they see as an undeserved, taxpayer bailout of Wall Street.

鈥淎t the grass-roots level, people are still largely opposed to this, but I talked to CEOs of healthcare organizations, business leaders, auto dealers, all of whom say that this credit crisis is real,鈥� says Sen. John Thune (R) of South Dakota. 鈥淭hey believe that steps need to be taken to ensure that we don鈥檛 have a crisis that limits credit to those businesses that operate on credit.鈥�

鈥淭his is going to happen,鈥� says lobbyist Josten. 鈥淭he last House vote was a 鈥榗onscience vote鈥� that wasn鈥檛 whipped on either side. But the credit crisis is now so great that some local businesses aren鈥檛 making payrolls. Congress can鈥檛 afford not to act.鈥�