Uh oh

It appears we are experiencing a wonderfully bipartisan effort from Congress to test the predictions of modern macroeconomic theory. 

We're in for a ride.  I am not looking forward to it, and neither should you.

Comments

[Will Baird]

aw, shibbt.

Why did it fail?

[Noel Maurer]

It's hard to say at this point. Right now, it looks like the GOP leadership balked. Without their sign-on, lots of Democrats ran for cover.

I'm not sure why Pelosi didn't try to ram it through on a party-line vote. Something will probably come up again soon and be pushed through just that way.

[DaveMB]

80% of members in close races, in either party, voted against.

The party-line vote is not on until things are even more desperate, because the Dems are worried about being tagged with the "Bush-Pelosi bailout bill". Hence all the negotiations, where the GOP House leadership promised Pelosi and Frank that they could deliver 80 votes, then weren't able to do it. (Kos, Atrios, etc., think they were unwilling to do it and were playing the same Lucy with the football strategy that they have used before, but I'm not sure I buy this. Boehner's "but she made a partisan speech, so my members bolted" sounds to me like a guy covering up his own failure.)

Someone mentioned the possibility of working out some individual pairs, with an R and a D agreeing with each other to both vote yes if roughly the same bill comes up again on Thursday. It wouldn't take too many of these. Maybe add one non-trivial sop to each extreme wing? But this close to an election, the members rightly worry that the voters will just see "voted for it", "voted against it", or "changed their vote under pressure", and the last might look worst.

Three of the ten MA Dems, all in quite safe seats, voted no. I bet they could be bought.

[Doug M.]

House Republicans, hum. I saw a lot of them on codels in the Marianas, and some more again in Yerevan.

They tend to be pretty rigid ideologues, and often sort of dumb. There are institutional reasons for this that are perhaps not what you'd think -- things like how the GOP has been recruiting new candidates for the last 15-20 years, especially in safe districts.

Also, being pushed back into minority status has removed much of the GOP leadership's ability to control its caucus. What are they going to do, block your next bill in committee?

Doug M.

[Luke]

Noel, you're nice, but here, you're wrong.

The vote plan was to put in 110 dems, 110 GOPPers, and thus, pass the bill. Pelosi delivered 140 members, and Boehner, well, epic fail.

The underlying strategic premise was to make sure that the GOP couldn't slam vulnerable Reps for backing the bill as it would be "bipartisan." But Boehner, Bush, and McCain don't have enough chips, separate or combined, to do that, especially when Eric Cantor (whip) is working in favor of the Republican Study Group's lunatic Ayn Rand Bailout Bill.

So, where now?

First, Congress is in recess til Thursday for Jewish holidays.

Then...in decreasing order of probability.

1) Nothing passes, congress takes up the issue either Nov. 5, 2008 or Feb. 1, 2009, or an emergency session on inaugeration day. Dems hold out, probably getting very close to a 60 seat senate majority as the meltdown expands and the GOP takes a beating for the blame.

2) Cosmetic and BS touches to the current bill earn "back" the missing 13 or so votes needed to pass the bill. Continued stock market deflation between now and Thursday does make this possible, save that the seven GOP votes aren't particularly likely to be forthcoming.

3) Senate takes up the bill first. It's got more support there, at least COB today, and it /might/ work. Save that you'd end up back at the House, and the recalcitrant Republican factions

4) Bandaid Bill. House passes $150 Billion dollar bailout that either picks up votes from the CBC/CHC or GOP/Blue Dogs. Not both; a patch on a blown tire, but still. It's more likely to end up pulling leftward than rightward, given where likely votes are. The downside for this is that if no bill is passed by Friday, you're going to see the chance of anything passing evaporate as folks race home to cover their asses/get reelected.

5) New Deal or No Deal; Democrats pass a bail out bill on party lines, excluding the Blue dogs but including the CBC/CHC, and probably some moderate Republicans hoping to save their seats (New England, Upper Midwest non-Christianists). Maxes out on all sorts of goodies that are watered down in the current version. Probably won't happen; Dems are too worried that they'll get pinned for the bailout, and thus, the ire of the voting public. I'd bet on "nothing" but I'm a pessimist.

[Jussi Jalonen]

I dunno, man, I'm getting some serious flashbacks. Basically, the United States is in the same situation that Finland was in back in the early '90s.

I'm still not sure if I should feel worried or thrilled about y'all. Probably because I have mixed feelings of the last Depression myself; it was a shit time to live in, but well, you gotta understand, I was _young_.

Cheers,

J. J.

[Noel Maurer]

Hi, Luke,

You're right, I'm wrong. I got a story pretty much like yours from a Congressional analyst, with a few less specifics.

The thing I forgot was that Dodd-Frank was already a compromise bill. A Democratic bill would nationalize the banks, giving cash in return for equity, and reform bankruptcy law to allow homeowner to stay in the home.

The upshot, as Luke says, was that Nancy Pelosi was not going to twist arms and threaten her members in order to pass a compromise bill on a party-line vote. If you're going to have a party-line vote, then you should have a party-line bill.

Me wrong, he right.

[Dennis Brennan]

U.S. Const., Article I, Section 7. Tax bills have to originate in the House, not the Senate.

[Noel Maurer]

Hi, Dennis,

I'm pretty sure that the Dodd-Frank plan isn't a tax bill, since the federal government will borrow the money that it then lends to the finance sector. That, I think (I am not a lawyer) puts it under Article 1, Section 8, which doesn't specify what house bills need to originate in.

A hypothetical Democrats-only bill, though, would almost certainly include tax measures.

[Luke]

What Noel says; also, even if it were a tax bill, you could fudge the Senate bit and pretend to conference whatever the house coughs up with the more Dodd-Frank Senate Bill and cobble something together. Not that such an action would be utter crap.

The structural problem to solving this is that:

1) the GOP has no votes in their pocket, and they can't be located or forced via either the sitting administration or the GOP Candidate (of 19 members of the TX House Delegation, Bush II reached /4/. And everyone hates John McCain. Even if they could be, Cantor is playing hard against Boehner that is really good for the party's long term viability (evil grin), out of ideological purity and some measure of cussedness and stupidity.

2) with a partial market recovery (currently around 270 points up from yesterday's drop) there's less incentive for either the Blue Dogs (swing districts) or the GOP (swing districts/Ayn Randers/plain foolish) to stop being chumps and, heh, put country first. Depending on how things close, they could have enough cover to keep sitting on their hands.

For now, though, it appears the Senate will try something roundabouts Thursday or Friday, but I'm not optimistic. In part because I could imagine a plurality of Senators blocking the "Dodd" bill from making it to the floor if the market stabilizes; McConnell, vulnerable in reelection, would probably slip his grip to cover his ass. Even if the bill were passed, if ballast returns to the markets and the bill goes to the House or into Conference, the ultimate version will be too much a christmas tree to placate anyone, and House support is likely to crater as more liberal Democrats peel off and more reactionary Republicans slough off Boehner's control as the taste of "crisis" passes. But something has to pass before next Monday. After that, odds rapidly diminish.

Of course, if the market doesn't stabilize, it's a different story and we might end up with the party line plan; every day of inaction or failure to pass something after recess ends should drag the market back down into the pit, so there's that.