- The Washington Times - Tuesday, September 23, 2008

NEW YORK | President Bush has softened plans to push world leaders Tuesday on legacy-building projects such as curtailing nuclear proliferation and confronting Russia. Instead, he will use his U.N. address to reassure them on the U.S. financial meltdown.

Foreign leaders and their delegations, bolstered with a larger than usual number of finance ministers, will closely watch the president’s speech to the opening of the body´s 63rd General Assembly and will press the U.S. for information during private diplomatic meetings.

One European diplomat said that “a lot of leaders have looked at the biggest event in New York, and it’s the global financial crisis.” The cover of New York Magazine on the rack inside the Waldorf Astoria, where the president and many other world leaders are staying, screamed: “The Panic of 2008.”

Mr. Bush’s speech was still being worked on Monday as Congress and the global market digested his administration’s $700 billion rescue plan.

“The whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector and retirement accounts,” Mr. Bush said in a statement released Monday morning.

White House press secretary Dana Perino, speaking to reporters flying with the president to New York, said the administration is aware of the concern.

“We are so intertwined with other economies around the world in our increasingly global economy,” she said.

The White House said its rescue plan is already being well-received in foreign capitals, pointing to a statement issued Monday morning by the finance ministers and central bank governors from the industrial nations in the Group of Seven - the U.S., Great Britain, France, Germany, Canada, Japan and Italy - after a conference call.

“We strongly welcome the extraordinary actions taken by the United States to enhance the stability of financial markets and address credit concerns, especially through its plan to implement a program to remove illiquid assets that are destabilizing financial institutions,” the statement said. The ministers also pledged to cooperate “to ensure the stability of the international financial system.”

But the mood in New York belied continued statements of confidence from U.S. government officials.

Abdelaaty Bakry, a 55-year-old limousine driver who works mostly in Manhattan’s financial district, said he was not comforted by the president’s rescue plan.

“The mess which happened, nobody can fix it. People are already scared, everything’s shaking,” he said. “The money will hide now. The people who have money will not spend.”

Mrs. Perino said the president will explain that the rescue plan “was not the president’s first instinct, that he would not have wanted to take this action to help these companies if he wasn’t convinced by the considered judgment of his senior economic team that it was critical to protect the American taxpayers and the American economy as a whole.”

Mr. Bush will also conduct bilateral diplomacy, particularly on the Russia’s recent invasion of Georgia, Iran’s continued defiance of international nuclear strictures and North Korea’s recent statements that they are restarting their nuclear weapons program.

The president will also focus on U.N. reform, a topic on which he has often been at odds with the international body.

And the president will meet for the first time Tuesday with new Pakistani President Asif Ali Zardari. While the White House insists that its relations with the new regime in Islamabad remain strong, there have been several troubling signs recently.

But the economy will dominate, and no matter what Mr. Bush says, leaders and ministers will be watching negotiations in Washington with Democratic congressional leaders, who are resisting administration demands that they pass a “clean” bill without amendments.

Democrats on Monday released more desired changes to the $700 billion plan unveiled Friday by Treasury Secretary Henry M. Paulson, Jr.

The plan would use taxpayer dollars to buy up mortgage-related securities that have plummeted in value and threaten to capsize investment banks and other financial firms. But Democrats want more oversight for the plan than was proposed - Mr. Paulson has agreed to that - along with several other measures that the White House is less likely to accept

Democrats want to limit pay packages for chief executive officers of failed financial firms, which some fear would risk driving executives away from participating in the government’s plan.

Mr. Bush tried to prod Democrats to move forward with minimal amendments.

“Obviously, there will be differences over some details, and we will have to work through them,” Mr. Bush said. “But it would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan.”

Watching the showdown between Democrats and the White House, Wall Street on Monday was not comforted, with the Dow Jones falling 372 points for the day and crude oil shooting up from about $105 a barrel to about $121 a barrel.

This General Assembly will be the last in the auspicious green marble General Assembly chambers. The entire complex is scheduled for a top-to-bottom renovation starting in early 2009. During the six-year renovation, large conferences and plenary sessions will be held in a large, supposedly temporary structure now under construction on the U.N. grounds.

Among the 79 presidents and 38 prime ministers expected to appear this week: Mr. Bush, Mahmoud Ahmadinejad of Iran, Nicolas Sarkozy of France, Hamid Karzai of Afghanistan, Robert Mugabe of Zimbabwe, and Georgia’s embattled Mikhail Saakashvili.

An unusual number of major countries will be represented by relatively lower-level ministers because of political elections or turmoil at home. Among them are Thailand, Japan, Canada, Israel and Bangladesh.

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