I have two simple questions for the Democratic majority in Congress with regard to the bail-out (if they remain determined to pass something).
- Why does the main bail-out bill have to specify a dollar amount?
Couldn't Congress pass a bill setting up a fact-finding component, an infrastructure, and a bail-out process, and then allocate resources in tranches, through secondary appropriations?
This is how we've funded Bush's world historic blunder in Iraq, and no one seems to have had any problem with it, or any doubt that funding would be there (the guarantee that is presumably needed to calm the markets).
The first tranche could be $100 billion soon, or an amount TBD in mid-November (when more facts are known).
Right now there is no evidence, anywhere, on how big the problem reallly is, or what level of bail-out / recapitalization might be required.
2. Especially if Republican strategy will be to oppose the bail-out as a way of trying to distance themselves from the mess itself, and from the President, why wouldn't Democrats move a re-regulation bill at the same time as the bailout, as part of a single package?
That way, Democrats can argue that Republican intransigence is all about preventing regulation and transparency:
Which is to say:
Republicans haven't learned their lesson.
(Does anyone really think they have? After the S&L bail-out, Orange County, LTCM, the California energy debacle, Enron, and now this, it would seem they have learned the wrong lesson: they can get away with it every time.)
If a comprehensive re-regulation bill is too hard to get right, how about a first-stab bill, one key part of which might be something like a requirement to register all credit default swaps (and other bizarro instruments) else those instruments lose their enforceability. This would provide a lot of useful data into the shape and dimensions of the "hidden" part of the crisis, beyond the mortgage-backed securities. And it would be a clear first step toward setting up real, transparent markets to sell and trade these things going forward (if anyone still dares).
Moreover, this would put the standoff in a context that reinforces what is fundamentally wrong with the modern Republican Party:
They hate sunlight.
(You may recall, John McCain said it himself.)