House GOP rallies against Bush bailout deal

UPDATED:

Defiant House Republicans stood their ground Friday as the White House and congressional negotiators struggled to get a $700 billion Wall Street bailout plan back on track.

President Bush made a fresh appeal for quick action a day after his high-stakes White House summit — which included presidential rivals Sens. John McCain and Barack Obama — appeared to set the bill back and sparked renewed partisan finger-pointing.

“My administration continues to work with the Congress on a rescue plan, and we need a rescue plan,” the president said to reporters just outside the Oval Office as a steady rain fell behind him.

“Any time you have a plan this big that is moving this quickly that requires legislative approval, it creates challenges,” Mr. Bush said. “Members want to be heard, they want to be able to express their opinions and they should be allowed to.”

The stock market appeared to take the Washington drama in stride, with the Dow Jones industrial index up 121 points and the broader S&P 500 index up as well.

But Treasury Secretary Henry M. Paulson Jr., the main architect of the bailout proposal, has warned that the real danger is in the credit markets, where the refusal of battered banks to make new business and consumer loans raises the threat of a general economic implosion.

Whether Mr. Bush’s appeal would sway members of his own party remained an open question, with House Republicans continuing to tout their own alternative plan that they say would avoid a direct taxpayer bailout of troubled banks and financial firms.

House Minority Leader John A. Boehner, whose caucus is fiercely opposed to the idea of a government-financed bailout, sounded a feisty note yesterday. He denied that House Republicans had torpedoed progress on the bill by springing their counterproposal at Thursday night’s White House summit.

“I don’t know what games were being played at the White House yesterday — a gang-up on Boehner — but if they thought they were rolling me they were kidding themselves,” Mr. Boehner told reporters.

House Republicans, who felt they had been excluded from intensive talks between Democrats and the administration, said their proposal had given them a seat at the table and highlighted their deep unhappiness with the Wall Street bailout.

Deputy Minority Leader Roy Blunt of Missouri, designated by Mr. Boehner as his chief negotiator in the talks, said he hoped a bill could be passed, but added that rank-and-file Republican concerns had to be taken into account if the package is to win broad support.

“Clearly, the Democrats have a majority in both houses of Congress. If they want to do this by themselves, they can do this in a minute. If they want to do this with us, we’re prepared to have that negotiation,” he said.

“Finally people realize enough that if they want this to pass it’s going to take some Republican support, and they’re looking at some of these conservative ideas,” Rep. Joe Barton, Texas Republican, who helped formulate the House Republican alternative.

While some Senate Republicans, notably Banking Committee ranking member Sen. Richard C. Shelby of Alabama, have come out against the administration’s plan, others have been working with Democrats to draft a bill.

Story Continues →