By JENNIFER LOVEN
Associated Press Writer | Posted: Wednesday, September 24, 2008 12:00 am
WASHINGTON - With a financial rescue plan facing a tough sell on Capitol Hill, President Bush has scheduled a prime-time address tonight that he hopes will convince regular Americans of its relevance and "get this over the goal line'' with lawmakers.
The address, to be delivered from the White House's grand East Room at 6 p.m. PDT, is to be 12 to 14 minutes long, White House press secretary Dana Perino said. Bush last gave a prime-time address to the nation 377 days ago. This one, expected to be carried by all five major television outlets, could be the last of his presidency.
The meltdown among several financial institutions and intense negotiations with Congress over the administration's requested $700 billion bailout package led the president to return to Washington early from a three-day stay in New York. He canceled his plans to spend the afternoon in Florida raising campaign cash for Republicans.
The package is meeting with deep skepticism on Capitol Hill, especially from conservatives in Bush's own party who are revolting at the high price tag and unprecedented government intervention into private markets. Though there is general agreement that something must be done quickly, the administration's proposal is being altered daily based on demands from the right and left.
In the face of this, White House and administration officials have warned repeatedly of what Perino on Wednesday called the risk of "financial calamity.''
But that argument has not closed the deal, as it recalls for many the grave threats Bush has warned of before - such as before the Iraq war - that did not materialize. So Bush's goal with his speech was to frame the debate in layman's terms to show the depths of the crisis, explain how it affects the daily lives of regular people and inspire the public to demand action from their Washington representatives. He was not expected to dwell much on either lawmakers' loud questions or lay blame for the problem.
"The cold on Wall Street could infect Main Street,'' Perino said. People "are concerned about their homes, their education funds, their retirement accounts, their savings.''
Stocks end little changed amid debate over bailout
NEW YORK (AP) - Tension grew in the financial markets Wednesday, sending stocks mostly lower as investors worried about the effectiveness of a still-emerging government plan to rescue banks from crippling debt. The credit markets also showed added strain, with rising demand for short-term Treasury bills, considered the safest of investments.
Wall Street was calmer than during the first two days of this week, with stocks meandering in and out of positive territory while investors tried to determine what shape the $700 billion plan might take.
Initial enthusiasm over investor Warren Buffett's decision to invest $5 billion in Goldman Sachs Group Inc. gave way to broader concerns that the dealmaking in Washington could produce less potent medicine than proponents say is necessary to aid moribund credit markets. Fear about bad debt on the books of financial companies has led to tightness in credit markets. That has made it difficult for businesses and consumers alike to borrow money.
Treasury Secretary Henry Paulson told the House Financial Services Committee that he agreed to limit the pay of Wall Street executives whose companies might benefit from the proposed $700 billion measure for financial services firms.
Paulson appeared with Federal Reserve Chairman Ben Bernanke before Congress for a second day to brief lawmakers on the plan. Their appearance on Capitol Hill Tuesday unnerved investors, who questioned whether lawmakers were beginning to doubt the necessity and form of the government bailout.
The waiting was clearly wearing on the credit markets, raising concern again about liquidity.
Demand for short-term government Treasuries increased as investors again sought safe places to keep cash. The yield on the 3-month Treasury bill, considered the safest short-term financial asset, was at 0.49 percent late Wednesday, down from 0.79 percent late Tuesday. Last week, demand spiked so high that the yield briefly dipped into negative territory; investors were so focused on putting their money in safe assets that they have been willing to accept very little or even negative returns.
Throughout the crisis, the White House has struggled to determine how best to deploy Bush.
As the problem mushroomed over the weekend of Sept. 13, Bush generally stayed out of the limelight, letting Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke take the lead with reporters, lawmakers and the public. Canceling a planned statement on the situation last Tuesday, Bush remained silent for days.
Since Thursday, however, the president has talked about the crisis almost every day - albeit very briefly most times - and yet he still has had trouble breaking into the debate. News coverage has barely mentioned Bush's comments or those of his aides trying to make points about the plan's aim and substance.
The decision to pull out perhaps a president's largest available weapon - the ability to command attention on evening television screens throughout the country, from a setting with the ultimate bully-pulpit power - is one sign that the rescue package still faces daunting hurdles.
TV executives can't be thrilled about the timing. This is the much-promoted week when the networks unveil their first episodes of the fall season for high-profile shows.
"I am confident when it's all said and done, that there will be a robust plan,'' the president said earlier in the day in New York.
He got an unlikely boost from the two men vying against each other to succeed him in the Oval Office. Barack Obama's spokesman said the Democrat and his Republican opponent, John McCain, were working on a joint statement outlining shared principles for a rescue and urging Congress to act. McCain also said he was returning to Washington to work on the issue and was asking Obama to delay Friday's debate.
Perino called it welcome news amid the flurry of negotiations. "Bipartisan support from Sens. McCain and Obama would be helpful in driving to a conclusion,'' she said.
With so many crises hitting the United States at once, the presidential race has taken a back seat and so has Bush's involvement in politics. Wednesday's Florida trip was the third time in a week that he has canceled his attendance at out-of-town fundraisers, either because of the market turmoil or Hurricane Ike.
The economic crisis also is almost certain to overshadow the rest of Bush's four months left in office and could hugely impact his legacy. It has been assumed that the long-term view of Bush's presidency was to be shaped largely by Iraq, Hurricane Katrina and the Sept. 11, 2001, attacks. Now, the dire economic problems and the aftermath of the government's attempt to deal with them will certainly be added to that list as well.