- The Washington Times - Friday, September 26, 2008

With the two men who want to succeed him sitting close by, President Bush on Thursday convened a historic, high-stakes summit to sell his $700 billion Wall Street bailout package, but the meeting produced fresh acrimony without clinching a deal on the rescue plan.

Congressional leaders negotiated into the night with Treasury Secretary Henry M. Paulson Jr. on Capitol Hill hoping most especially to overcome objections by conservative House Republicans about the size and scope of the package.

“If we get support from House Republicans, this could all be done in a couple of days,” Senate Majority Leader Harry Reid said.

Adding urgency to the crisis, a trio of new reports showed a rapidly weakening U.S. economy. Orders for long-lasting U.S. manufactured goods and sales of new homes plunged in August while jobless claims shot up last week to their highest level in seven years, according to the government.

New-home sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991. It was a substantially bigger sales decline than the 1 percent drop that economists had been expecting.

Wall Street had a generally good day on Thursday based on early reports that a deal was imminent, but investors braced for the possibility of markets opening without a bailout in place.

The stalemate over the bailout also continued to loom over the first presidential debate between Republican Sen. John McCain and Democratic rival Sen. Barack Obama, both of whom attended the summit in the White House Cabinet Room.

Mr. McCain, who suspended his campaign Wednesday to deal with the Wall Street implosion, has called for a postponement of Friday night’s debate on foreign policy and national security issues, but Mr. Obama has insisted that he wants the debate to proceed.

“One of us will inherit this mess in four months,” Mr. Obama said, adding that the American people should hear where he and Mr. McCain stand on the issues.

Participants in the White House meeting described a number of contentious moments, and Mr. Reid said the White House meeting had actually set the negotiations back.

At one point, Sen. Richard C. Shelby of Alabama, ranking Republican on the Senate banking committee and a bailout opponent, waved a sheaf of letters that he said were from top economists who insist the Treasury plan would not work.

But Democrats in the meeting also were fuming afterward, saying the meeting was a step back from a bipartisan “fundamental agreement” on the principles for a draft bill they announced with great fanfare earlier in the day.

The White House meeting “looked like a rescue plan for John McCain for two hours, and it took us away from the work we were trying to do,” said Sen. Christopher J. Dodd, Connecticut Democrat and banking committee chairman. He complained in an interview on CNN that Republicans floated an entirely new rescue plan at the White House meeting.

Republicans fired back last night. McCain spokesman Brian Rogers said, “There never existed a ‘deal,’ but merely a proposal offered by a small, select group of members of Congress.

“At today’s Cabinet [Room] meeting, John McCain did not attack any proposal or endorse any plan,” he said. “However, the Democrats allowed Senator Obama to run their side of the meeting. That did not work as the meeting quickly devolved into a contentious shouting match that did not seek to craft a bipartisan solution.”

Story Continues →