With the White House and congressional leaders struggling to resurrect a rescue of the nation’s struggling financial markets, they are searching for ways to sweeten the deal for reluctant lawmakers.
The idea of boosting the cap on federal bank deposit insurance has gained some momentum, with both candidates for president – Democratic Barack Obama and Republican John McCain – propose lifting it to $250,000. The Federal Deposit Insurance Corp. insures individual bank deposits up to $100,000.
House Minority Leader John Boehner, who urged fellow Republicans to support the $700-billion federal bailout for banks and other financial institutions that the House rejected on Monday, suggested somewhat derisively Tuesday that the Republicans had promoted that idea of higher FDIC coverage in the talks.
“The presidential candidates’ support for increasing the FDIC cap is welcome news,” Boehner, R-Ohio, said Tuesday. “Increasing the FDIC cap is a proposal put on the table by House Minority Whip Roy Blunt and House Republicans but ruled out by Democrats during the negotiations that led to yesterday’s unsuccessful vote.”
Meanwhile, public support for the Bush administration’s proposed rescue plan has softened, according to a survey that started before the measure’s dramatic collapse on the House floor Monday and ended as stock values plunged afterwards.
The Dow Jones Industrial Average jumped 485.21 points Sept. 30, or 4.7 percent, to 10,850.66. It gained back more than half of Sept. 28’s 777-point decline.
Just 45 percent of those surveyed nationally by the Pew Research Center support a government plan to invest or commit billions to secure financial institutions, and 38 percent opposed it in the poll taken Saturday through Monday. That was down from the 57 percent support voiced in a Pew survey conducted Sept. 19-22, when 30 percent said it was the wrong thing to do.
Nevertheless, President George W. Bush called on Congress to approve the plan when it returns to Washington this week _ the Senate in session on Wednesday, but the tabled bailout bill awaiting a new look in the House on Thursday.
Among the sweeteners lawmakers are eyeing:
Republicans want banks to adjust the value of their assets to reflect current market prices, with some contending that rules forced banks to report huge paper losses on mortgage-backed securities.
Democrats are looking at an extension of unemployment insurance and banning some forms of “short selling,” investors betting a stock will decline in value.
The White House is welcoming all ideas, but leaders say the road out of the bailout impasse has not been charted yet.
For their part, the presidential candidates prefer the term “rescue” mission to “bailout.”
And as they offer their sales pitches on the campaign trail, both are trying to help pass the $700 billion proposal to calm the markets and free the flow of credit – without becoming targets for potential political backlash.
(c) 2008, Chicago Tribune
Distributed by McClatchy-Tribune Information Services.
