European policymakers urged the U.S. Senate on Wednesday to approve a revised $700 billion financial rescue plan aimed at tackling the worst financial crisis since the 1930s.
The contagion stemming from risky home loans has toppled Wall St firms, frozen lending among global banks, and overshadows campaigning as Americans prepare to vote for their next president on November 4.
A revised package which the Senate will vote on sometime after 7:30 p.m. EDT would increase to $250,000 from $100,000 the amount of individual deposits guaranteed.
The main aim of the package remains unchanged -- to allow the U.S. Treasury to buy toxic mortgage-related assets from banks in a bid to unlock credit markets and head off deeper damage to the U.S. and global economies.
It is unclear to what extent these European policymakers followed the details of the debate in the House or even, for that matter, some of the more salient observations made by Representatives of both parties that chose to vote against the bailout. It is even less clear that those policymakers would be aware that there is a contingent in the House that has taken the initiative to "start again on a new package." Those are the words of Oregon Democrat Peter DeFazio; and the only place I have seen them thus far has been on The Beat, a blog maintained by John Nichols on the Web site for The Nation. This is just not the sort of place one would expect Europeans to seek out differing perspectives on the American economic crisis and how it should be addressed. Indeed, if the Reuters report is representative, one has to wonder just how much initiative Europe has taken in their own deliberations over this problem. Consider the words of Josef Ackermann, chief executive of Germany's Deutsche Bank:
If the United States passes such a package, Europe should be prepared to find similar solutions.
Loosely (if not politely) paraphrased, this comes down to:
Let's see what the Americans do, and we shall consider doing the same.
This kind of reasoning does not make for a good way to pressure the Senate.
More important is that this could be a significant moment of truth for Barack Obama. If he wants to show the American voters what he means by "change we can believe in," he should be meeting with DeFazio and his colleagues to learn as much as he can about just what kind of alternative they have in mind. He can then return to the Senate floor and apply all of his governmental skills to either postpone the vote in favor of deliberation that considers serious alternatives (rather than focusing only on the my-way-or-the-highway logic of the Executive branch) or exhibit the audacity to vote against the bailout and persuade enough others to do so in order to make it necessary to think about such alternatives.
Unlike the House, only one-third of the Senate seats are up for review by their respective electorates. That means that two-thirds of the Senate floor is likely to be more susceptible to the voices of Wall Street than to those of Main Street. However, all of those Senators know that they may have to be dealing with Obama in a different capacity in January. If Obama has the power of Main Street behind him, those Senators may be more inclined to hear him out before casting what could be a decisive vote on our country's economic future. Those of us who heard Nancy Pelosi prior to the House vote know the impact that our voices can have right now. For the House vote it was a matter of writing directly to someone whose individual seat dependent on our own individual votes. Now we can turn our attention to Obama and let him know that his performance in the Senate may well be the factor by which we decide how well he may perform in the White House.