After meeting nearly around the clock for two days, a bipartisan group of Congressional leaders reached a tentative agreement with the Bush administration early Sunday morning on a compromise financial bailout bill that is less sweeping than the original proposal crafted by Treasury Secretary Henry M. Paulson, and includes more oversight, accountability and taxpayer protections. Congressional staff members worked through the night to draft a bill that would be brought to the House floor for a vote on Monday.

According to a draft of the proposed compromise legislation released by House Speaker Nancy Pelosi’s office, the goal is to “reinvest, reimburse and reform” while also stabilizing the financial markets. The most significant departure from Paulson’s original proposal is that the Administration’s initial request for $700 billion upfront is cut in half, and Congressional oversight and approval will be necessary to commit additional taxpayer funds.

Other key provisions include taxpayer protections; limits on “excessive” CEO and executive compensation (“excessive” not being defined); banning multi-million dollar golden parachutes; recovery of performance-based bonuses when top-level executives fail to deliver; a bipartisan oversight board; assistance to homeowners via with mortgage loan modifications; and allowing community banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks so as to enable them to continue to extend credit to small businesses.

From the start, the bailout was deeply unpopular with voters – some of whom joined protest rallies against it. Fifty-one percent of American adults participating in a Rasmussen national telephone survey  Thursday and Friday nights think that the original version of the $700-billion taxpayer-funded Wall Street bailout is an attempt by politicians to gaining additional power, rather than to fix the economy. One-third also believe that political leaders are trying to scare  us into supporting a bailout plan by making the situation sound direr than it is; 39 percent disagree this is the case and 27 percent are not sure one way or the other. It remains to be seen whether voters will decide they can live with the scope and terms of the bailout once they’ve seen the details in writing.

But just what was McCain’s role in brokering this compromise deal? Did he “derail” a “done deal” by charging into Washington, D.C.? Or did he quell a riot by House Repubs by hearing them out, and conveying to the president and other key players that the deal was dead  unless certain conditions were met?

Here’s the back story, as described by syndicated columnist Debra Saunders:

Yes, John McCain’s suspension of his campaign earlier in the week and call for a delay of Friday’s debate were campaign stunts. But his decision to go to Washington to prod political leaders to pass a sensible bailout measure, while political, showed America a candidate who will risk his electoral fortune to deliver the right policy.

McCain was in a corner. He clearly feared that if Congress did not approve a bailout measure, the economy would tank. Then, his bid for the White House would be doomed.

And while Senate Majority Leader Harry Reid derided McCain’s appearance Friday, on Wednesday Reid declared a need for “the Republicans to start producing some votes for us. We need the Republican nominee for president to let us know where he stands and what we should do.”

The alleged deal that had been cut before McCain landed in Washington Thursday did not exist. House Republicans had not signed on.

Without them, Democrats would not sign on. On Friday, Reid falsely claimed there was a deal “and then guess who came into town.”

And: “The insertion of presidential politics has not been helpful. It’s been harmful.” No lie, but it’s Reid and company who appeared ready to scuttle any settlement lest McCain get the credit.

 Here’s how events unfolded, according to The Washington Post: 

When Sen. John McCain made his way to the Capitol office of House Minority Leader John A. Boehner (R-Ohio) just past noon on Thursday, he intended to “just touch gloves” with House Republican leaders, according to one congressional aide, and get ready for the afternoon bailout summit at the White House.

Instead, Rep. Paul D. Ryan (Wis.), the ranking Republican on the House Budget Committee, was waiting to give him an earful. …

McCain listened, then, with Sen. Lindsey O. Graham (S.C.), he burst into the Senate Republican policy luncheon. …

“I appreciate what you’ve done here, but I’m not going to sign on to a deal just to sign the deal,” McCain told the gathering, according to Graham and confirmed by multiple Senate GOP aides. “Just like Iraq, I’m not afraid to go it alone if I need to.” …

By the time the meeting broke up, the agreement touted just hours before … was in shambles.

An incendiary mix of presidential politics, delicate dealmaking and market instability played out Thursday in a tableau of high drama … McCain’s presence was only one of the complicating factors. Sen. Barack Obama played his part, with a hectoring performance behind closed doors at the White House. …

“If there is a deal with the House involved, it’s because of John McCain,” Graham, one of the Arizonan’s closest friends in the Senate, said yesterday.

The fact is, there was never a deal until Sunday, and not just because the House Repubs felt they were being railroaded into accepting the administration’s untenable socialistic solution. It is not politically prudent for either McCain or Obama to rubberstamp Bush’s solution – nor is there historical precedent for presidential candidates to hamper their maneuverability to resolve a crisis should they win the White House, according to an article by Peter Baker in the The New York Times. For instance, president-elect Franklin D. Roosevelt blew off Herbert Hoover’s repeated attempts to get him to sign a joint declaration ordering a four-day bank holiday to prevent a run on deposits, but then put Hoover’s proposal into practice two days after being sworn in.  

Both candidates announced they are backing the compromise legislation – though, predictably, neither wants to give the other credit for having any role in the process.

Note: The Stiletto writes about politics and other stuff at The Stiletto Blog, chosen an Official Honoree in the Political Blogs category by the judges of the 12th Annual Webby Awards (the Oscars of the online universe) along with CNN Political Ticker, Swampland (Time magazine) and The Caucus (The New York Times).

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