Congressional Leaders in Standoff Amid Financial Crisis

JEFFREY BROWN:

And for that, we turn to two congressional correspondents covering this story closely. Martin Kady is with Politico.com, and John Shaw is with Market News International, a global wire service that reports on financial markets.

Well, we heard we have a deal; we heard we don't have a deal. Where do things stand?

JOHN SHAW, Market News International:

I think this is one of the most complex negotiations Washington has seen in a long time. It's almost like three-dimensional chess, in which you have at one level the leadership of the Financial Services Committees — Barney Frank and Chris Dodd — and some members, Democrats and Republicans, trying to put together a deal that roughly reflects what the Treasury secretary, Henry Paulson, offered.

Then, at another level, you have the leadership trying to figure out what kind of package could pass their respective chambers, so the House speaker, Nancy Pelosi, Senate Majority Leader Harry Reid, and their Republican counterparts.

And then, you have, as we saw, the White House negotiations going on, which are even further complicated by the emergence of the presidential candidates.

So you have a shifting cast of characters. Some people think there's an agreement; others say there's no agreement. And it's been a really complicated negotiation to follow.

JEFFREY BROWN:

Martin Kady, what's your assessment of the day? Where are we?

MARTIN KADY, Politico:

Well, I still think that we'll have something by the weekend. Maybe I'm overly optimistic.

But the House Republicans were not in on the morning negotiations. Boehner was not in this meeting. And you noticed that Senator Shelby came out and he said, "We don't have a deal."

Well, Shelby is the ranking Republican on the Senate Banking Committee. He was not in the negotiations this morning, either, so he might be a little bit of an outlier on this.

But if the presidential candidates leave town, it might actually be easier to get something done.

JEFFREY BROWN:

We'll come back to them, but where do you see the main hang-ups right now?

MARTIN KADY:

Well, the hang-ups are on a couple of things. The general bailout authority has support in both chambers, with the exception of a sort of hardened group of House conservatives, the general authority to give the Treasury secretary the ability to buy up to $700 billion in bad debt, basically. I think they settled on that.

It's these areas around the fringes, such as how you handle executive compensation, whether they put some sort of a cap or a limit on how much you pay the executives of companies that are getting a bailout.

The other thing that Democrats are really trying to get in there, which they probably won't, is a bankruptcy provision that would allow bankruptcy judges to renegotiate mortgages for people facing foreclosure. That's a poison pill for Republicans, but it's something that a lot of housing advocates and a lot of more liberal Democrats would love to get in there.