The Bailout Brawl Rages On
Update (12:37 a.m.): It's a secret deal! Until they get it down on paper overnight, we won't know what they agreed to.
Except, except. We imagine that that the staff members and lawmakers will quickly be leaking details to reporters. (Leak it to us! Clusterstock@gmail.com or 646-526-FEAR)
Update (12:35 a.m.): Nancy Pelosi speaks first. She says we have a deal. Harry Reid is up next. He credits Pelosi with coming up with a new idea in the final hour but doesn't even hint at what that is! Are the Republicans going to let Pelosi claim the credit? Or are they convinced it's a terrible idea and want her to take the blame? What the heck is this brilliant new idea anyway?
Hank Paulson sounds less reassuring, mentioning that there is lots of work left to be done and concluding "so far, so good."
Gregg just sounds glad to be able to go to bed. Roy Blunt admits he hasn't talked to the House Republicans but seems confident. Blather from Dodd about how "unpleasant" having to "go through all this" has been.
Barney Frank says he's looking forward to not having to speak to all the lawmakers around him. They all agree. Chuckles all around. Old Barney's always good for a moment of levity.
Update (12:27 a.m.): They're walking toward the microphones together. Looks like we have a deal because they're all together. Nancy Pelosi in front, followed by Chuck Schumer, Chris Dodd, Judd Gregg, Hank Paulson, Roy Blunt, Harry Reid. Democrats, Republicans, Senators, House members, Treasury Department. That sure looks like a deal.
Update (12:22 a.m.): The meeting has broken up, and some kind of announcement is apparently imminent.
Update (12:15 a.m.): A person familiar with the progress of the negotiations says describes the progress over the last hour as "significant." Most negotiating plan to announce something shortly. The person warns, however, the there may be a bit of "room fatigue" setting in, as negotiators drop objections out of exhaustion, making an agreement seem closer than it actually is. Many lawmakers, particularly GOP House members, who are not taking part in the talks will still need to be consulted.
Remember: You can send tips to Clusterstock by emailing us at Clusterstock@gmail.com or texting us at 646-526-FEAR.
Update (12:00 a.m.): Still no deal reached! So much for the much anticipated midnight agreement.
CNN just reported that Warren Buffett told lawmakers that if they don't reach a deal soon we'll face "the biggest meltdown in American history.
Update (11:30 p.m.): The WSJ reveals that the negotiators have been calling so-called financial experts around the country for advice. That's right: they've chose to use the "dial a friend" option.
"We've had Warren Buffett on the phone tonight, other experts that we've been consulting," Senator Kent Conrad said.
He added that there were only a "handful of issues" left. Is that true? It seems like we've had bucket fulls of new issues arise tonight. Can the negotiators really have cleared all these new issues with there House and Senate colleagues? Remember, these are the same people who told us we had a deal days ago.
We're now nearing the 10th hour of negotiations.
Update (10:00 p.m.): Despite the happy talk about getting closer to a deal, all the new proposals we keep hearing about suggests the opposite. Rich Lowry, the editor of National Review, thinks things are falling apart on Capitol Hill: "Just talked to a friend who is plugged-in to all this who wants a deal and has tended to think all along that there will be a deal. Now heís not so sure. He thinks the wheels are coming off. House Republicans want their insurance as a mandatory thing rather than an option, while the House Democratic caucus is imploding and pulling the deal far to the left. Itís getting ugly."
Update (9:45 p.m.): Politico reports that there is growing interest in imposing a financial company transaction fee to pay for the bailout. Paulson is said to be open to the idea, although exactly which transaction would be subject to what kind of fees remains vague.
Meanwhile, the Treasury is reportedly pushing back on attempts to stagger the rescue funds into three tranches. Paulson and his buddies want at least $500 billion in the initial tranche.
Update (8:40 p.m.): The meeting on Capitol Hill reconviened this evening but the situation is becoming more complicated not less. Senator Kent Conrad, who runs the Senate Budget Committee, emerged from the meeting and told reporters that "We've got several big issues" that have not been resolved.
House Speaker Nancy Pelosi has added a twist to the negotiations by introducing a new proposal that would allow the government to 'recoup' losses from securities or mortgage bought from financial firms by charging the firms some kind of fee. We described this proposal, which originated with conservative Democrats, earlier today. (See below.) The provision could be highly problematic as it adds complexity and unpredictability to the deal, leaving financial firms on the hook for the downside of the assets that have been dragging them down for the past year.
Update (5:40 p.m.): The point man for the Republican House members, Roy Blunt, just left House Speaker Nancy Pelosi's office. He walked right past the waiting press hordes without offering any comment. The official word is that those meeting, including Barney Frank, Senators Chris Dodd and Judd Gregg, Treasury Secretary Hank Paulson, Blunt and Pelosi, are taking a break.
Apparently, it's not just a break because it's dinner time. House Democrats are meeting in the basement of the Capitol building. Blunt will be speaking with Eric Cantor, who has been taking the measure of the House Republican rank and file. Gregg is presumably briefing fellow Republican Senators, while Dodd meets with Democratic Senators. Paulson is probably on the phone with Robert Steele, his former deputy at Treasury who is now the head of Wachovia, cursing the fact that he has to deal with all this damned poliiticians while another U.S. bank teeters on the edge of failure.
The meeting is scheduled to resume within an hour.
.......................AND THE CONGRESSIONAL CLUSTER (...) CONTINUES !