The White House today is drumming up extraordinary pressure on Congress to approve its plan to enact a $700 billion mortgage bailout fund, suggesting the markets cannot wait much longer and dispatching Vice President Cheney and other top officials up Pennsylvania Avenue to jawbone lawmakers.
Cheney, White House Chief of Staff Josh Bolten and presidential adviser Ed Gillespie are meeting this morning with House Republican conservatives, where a rebellion is brewing against the size and questionable free market credentials of the administration proposal.
Cheney will later gather with GOP Senators at the regular Tuesday lunch. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, who collaborated in drawing up the proposal, are testifying this morning on Capitol Hill in an effort to defend their handiwork.
But Bush himself continues to do little to explain his plan, and he has refused to be questioned about it.
Asked during a telephone briefing for reporters today whether Bush was speaking with lawmakers, White House Deputy Press Secretary Tony Fratto said the president is aware of their concerns but that Paulson is the salesman.
Paulson said Congress and the administration must move rapidly.
We must do so in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families’ financial well-being, the viability of businesses both small and large, and the very health of our economy, Paulson said in remarks as prepared for delivery. The market turmoil we are experiencing today poses great risk to U.S. taxpayers.
Fratto said it would be unthinkable for Congress not to pass legislation this week, asserting the result would be a very, very serious situation for the U.S. economy.
It shouldnt take much analysis to remember what happened last week, which was a very serious freeze-up in our credit markets, Fratto said. Our financial markets right now do not need uncertainty, they need increased certainty as to how this rescue plan is going to go forward and that they can be sure that there is a plan to go forward and that will begin the correction in our financial markets.
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
Amid growing criticism of the initiative from multiple quarters, Fratto sought to defend its key principles and argue against changes.
He argued that the proposal is being unfairly characterized as a boon to Wall Street at the expense of Main Street, since credit market difficulties also squeeze average consumers. He minimized the need to help homeowners as part of the package a key demand of Democrats saying aiding the credit markets will help on its own and noting that Congress just approved a housing bill that includes assistance.
And Fratto sought to beat back efforts to limit the pay of CEOs whose companies would draw assistance under the legislation, saying it would make it difficult for the plan to work If you provide disincentives for companies and firms out there that are holding mortgage-backed securities and other securities from participating in the program.
Fratto noted that some firms holding troubled securities are otherwise successful. They were not necessarily irresponsible players, and so you have to be careful how you deal with them, he said.