The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, warnings from an angry president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.
“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.
It was an implosion that spilled out from behind closed doors into public view in a way rarely seen in Washington. Left uncertain was the fate of the bailout, which the White House says is urgently needed to fix broken financial and credit markets, as well as whether the first presidential debate would proceed as planned on Friday night in Mississippi.
When congressional leaders and Sens. John McCain and Barack Obama, the two major-party presidential nominees, trooped to the White House on Thursday afternoon, all signs pointed toward a bipartisan agreement on a grand compromise that could be accepted by all sides and signed into law by the weekend. It was to have pumped billions of dollars into the financial system and transformed the way Wall Street is regulated.
“We’re in a serious economic crisis,” Bush told reporters as the meeting began shortly before 4 p.m. in the Cabinet Room, adding, “My hope is we can reach an agreement very shortly.”
But once the doors closed, the smooth-talking House Republican leader, Rep. John A. Boehner of Ohio, surprised many in the room by declaring that his caucus could not support the plan to allow the government to buy distressed mortgage assets from ailing financial companies.
Boehner pressed an alternative that involved a smaller role for the government, and McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand.
The talks broke up in angry recriminations, according to accounts provided by a participant and others who were briefed on the session, and were followed by dueling press conferences and interviews rife with partisan finger-pointing.
In the Roosevelt Room after the session, Treasury Secretary Henry M. Paulson Jr., literally bent down on one knee as he pleaded with House Speaker Nancy Pelosi not to withdraw her party’s support for the package over what Pelosi derided as a Republican betrayal.
It was the very outcome the White House had said it intended to avoid, with partisan presidential politics appearing to trample what had been exceedingly delicate congressional negotiations.
Sen. Christopher J. Dodd, D-Conn., the chairman of the Senate banking committee, denounced the session as “a rescue plan for John McCain” in an interview on CNN, and proclaimed it a waste of precious hours that could have been spent negotiating.
But a top aide to Boehner said it was Democrats who had done the political posturing.