Democratic leaders seek ‘sweet spot’ on bailout

On the Republican side, many House members still were skeptical, even after a briefing Tuesday morning from Vice President Dick Cheney and White House Chief of Staff Josh Bolten.

“Should something be done? Probably. But whether this bill is the right approach or not is still up in the air in my mind,” said Rep. Jim Gerlach, R-Pa., a member of the Financial Services Committee.

“We need to see in the next day or two, when more details come into clarity, and then make a decision.”

He added, “I learned a long time ago if you don’t have to vote today, you don’t have to make up your mind today.”

How's it affecting southeast Pennsylvania?
In his district in southeast Pennsylvania, Gerlach said the Wall Street crisis has not so far caused a seizing-up of credit for businesses.

“I had a meeting this morning with my financial services advisory committee, some local bankers and insurance people, and no one stressed any problems they’re having with credit and liquidity. They’re doing OK and we still have a pretty good economy going in southeast Pennsylvania.”

A group of staunch conservative House Republicans offered their own proposals Tuesday, including a suspension of the capital gains tax, in order to free up capital to be invested in distressed assets.

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If there must be a bailout, they said, it should be paid for not by tax increases or by borrowing, but by royalties paid by oil and gas drilling on the Outer Continental Shelf and in Alaska’s Arctic National Wildlife Refuge.

Although such ideas are non-starters in the current Congress, the votes of the conservative Republicans may prove to be decisive.

“We need to be reaching out to the Blue Dog (fiscal conservative) Democrats and see where they’re coming from on this issue. It could be a very interesting alignment of interests who come together to vote ‘no,’” said conservative GOP leader Rep. Michele Bachmann, R-Minn.

Perhaps with an Obama presidency in mind, Bachmann warned that the bailout bill would give too much power not only to the current Treasury secretary but to the next one as well.

“We don’t know what the full power of the Treasury would be going forward. This isn’t just about Paulson and a Republican administration.”

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