Hurry Up and Wait

We hear the calm before the storm has descended on Capitol Hill, at least outside the House hearing room where Henry Paulson, Ben Bernanke & the gang are getting another grilling. But the broad brushstrokes of the financial bail-out bill are beginning to take shape.

The House and Senate have agreed to hash out a single bill to take to the floor of both chambers, to avoid the kind of protracted procedural ping-ponging that can days or weeks. But that means little concrete has happened while House members and staffers prepped for (and sat through) the hearing.

Expect that to change in a hurry, with a joint bill possible late tonight or tomorrow; agreement seems to be shaping up on several fronts.

Last night, we sketched out how lawmakers wary of public anger were trying to balance that with the need for speed. Some updates:

  • We're told there's broad support for some sort of restrictions on executive compensation. Legal issues could complicate any proposal, a congressional staffer acknowledges. "Nobody knows precisely how to do it yet, so it's unclear what form it will take."
  • Similarly, the bill is likely to include some variation on proposals to give the government and taxpayers a stake in companies receiving Treasury aid. One proposal in a Senate draft circulated earlier in the week: warrants designed to recoup losses when the Treasury goes to sell securities it has acquired.
  • Proposals to give judges the power to modify mortgage terms in bankruptcy -- they can change the terms of other loans already -- are less certain. House and Senate leaders like the proposal as a matter of policy, but Treasury has remained staunchly opposed and there's concern that the provision could sink a bill's chances.
  • Talk at Tuesday's Senate hearing suggested some senators, including Chuck Schumer (D-N.Y.), were considering doling out the proposed $700 billion to Treasury in chunks. While there doesn't seem to be a wave of momentum for the idea, expect to hear it pop up as lawmakers wrestle with how to provide Treasury the oomph it needs to reassure the markets while watching out for the federal purse.

Meantime, Democrats on the Hill are acutely aware of the political calculus: They don't want to be seen holding the bag for a massive corporate bailout That's the risk if fiscally conservative Republicans peel away and leave Democrats to pass the final measure on their own. "The president's got to do his part here. ... He's got to deliver some votes -- and a significant number of votes," the congressional staffer said. "We're not going to bring a bill to the floor and have it be some huge partisan vote where the Democrats and President Bush bail out Wall Street."

House Republicans, in particular, seem to be lining up against the bill, Tom Gallagher, a political analyst for International Strategy & Investment, says in a report this morning. "It's not clear how many votes the leadership in either party can deliver." A possible scenario he paints: "Perhaps defeat of a bill, if it leads to a market rout, could provide the impetus for passage."

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