A Bitter Bill to Swallow

This was published as an op-ed in the October 2, 2008 Trenton Times, in response to the failed vote in the House of Representatives on the economic "bailout" plan, in advance of the revote expected on October 3.


There are many words in the English language that have dual meanings, but the duplicity of one word, “oversight,” is at the heart of the singular most important debate of our time. Our economy is in shambles, in large part due to the lack of oversight by our government, which allowed this perfect storm to brew without taking any definitive action. It seems, however, that there has been plenty of oversight, of the “Oops, I guess that one got by me” variety.

While few Americans are thrilled about the thought of investing $700 billion with no guarantee that any of that investment will be worth anything in the future, there seems to be little doubt that something urgently needs to be done. The mere failure of Congress to pass the “bailout” plan caused a one-day drop in market value of over $1 trillion. My guess is that when Congress reconvenes, it will reach agreement on the plan, repackaged as a “rescue” plan, with a couple of face-saving tweaks to give some of the previous opponents cover. This bitter bill to swallow is perhaps all that stands between us and the abyss.

What should have been a non-partisan call-to-arms has devolved into a childish morass of finger-pointing and name-calling. Our Republican President, as lame a duck as he may be, tried to rally the Congressional forces together to do the right thing, and do it quickly. There can be no denying that the current economic debacle is having global consequences, and our already shaky world standing is taking yet another hit. Nevertheless, the President’s call was met with backlash, even from his own party.

It’s amazing that Senator McCain “suspended” his campaign to go back to Washington to help get the bill passed, with the result being that 2/3 of his party’s contingent in the House of Representatives voted against it. At the same time, Senator Obama decided to remain on the sidelines and leave the legislative action to those who have been most engaged, and 60% of his party voted for the bill. The same day that Senator McCain said he was “suspending” his campaign, he appeared at the Clinton Global Initiative meeting and gave what was arguably the best speech on the economy of his campaign, and made a big point of his personal magnanimity in putting his campaign on hold.

Despite Senator McCain’s stated desire to eliminate partisanship from the discussions about how to resolve this problem, it seems that his involvement has done anything but that. The plan, put forth by the Republican administration, went down in defeat. When the votes were counted on Monday, Senator McCain’s party came up far short of the number that needed to be delivered, and the Democrats came up with more than should have been necessary. In the insanity that ensued, Republicans accused Democrats of killing this vital bill.

Our economy is teetering precariously on the brink of disaster. As we’ve heard ad nauseum, “It’s not just about Wall Street, it’s about Main Street.” At the heart of the problem is the credit market, which provides money for people and companies to buy things, so that everyone benefits. People benefit by being able to have things today and pay for them in the future. Companies benefit in the same way, but also by having working capital to conduct business. Certainly, the credit market mess has an impact on Wall Street, because the companies that depend on credit to do business become less profitable when they can’t borrow to meet their normal business needs. The solution needs to be one that shores up the credit market, so that the rest of the economy isn’t held hostage. Then we can figure out a way to make sure this can’t happen again. This is a time for first aid – the patient is bleeding to death.

Congress needs to pass the bill, whether it’s a “bailout” bill or a “rescue” bill. But in doing so, it needs to ensure that it has the power to control the way the funds are allocated, and maximize the possible return on our citizenry’s unprecedented financial investment. Congress clearly cannot give a blank check to the Treasury, and hope that it doesn’t gamble all our money away.

So, in the end, what remains to be seen with whatever solution Congress adopts is whether, in this instance, Congressional “oversight” becomes a responsibility or continues to be an excuse.