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Why Congress will cave on the bailoutSeptember 23, 2008 11:26 AMWhy Congress will cave on the bailout Having been on vaction last week when the Treasury and Fed intervened to buy up $700 billion of bad debts from financial firms, I was encouraged to return and find not only reputable economists but members of Congress from both parties raising objections to this massive bailout. On Capitol Hill, lawmakers from Sen. Dick Durbin (D-Ill.), a liberal, to Rep. Mike Pence (R-Ind.), a conservative, have balked. But will Congress actually refuse to go along with the rescue plan? Almost certainly not. That reality has very little to do with the merits of the issue--whether such radical steps were needed to prevent the End of the World, as we have been told by Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke. It has more to do with the natural aversion of people in government to taking responsibility. The plan conceived by Paulson and Bernanke stems from the oldest bureaucratic imperative: cover your backside. If they had not acted and the inaction turned out to be a colossal error, they would have been tarred, feathered and roasted on a spit for their misjudgment. But if the rescue ends up a mess, they can always say, without fear of contradiction, that the alternative would have been even worse. Not only that, but the ultimate judgment of whether the plan is wise or not may be years in the future, by which time they may both be beyond the reach of angry congressional committees. Blame tomorrow is always better than blame today. That's why Congress is unlikely to stand in the way of the bailout--though it will probably add extras, like help from distressed homeowners, to satisfy various constitutencies. Blocking the way would mean Congress would wear the jacket for anything that goes wrong in the short run--which I define as before Election Day--as a result of financial market turmoil. Better for skeptical lawmakers to go along now while retaining the right to excoriate the administration for incompetence if the rescue doesn't do the job. (See: Iraq war resolution.) It would be heartening to see the legislative branch stand up and assert its equal right to determine policy here. But it would also be a drastic reversal of form by Congress. And spines, alas, are not grown overnight. SOURCE :: By Steve Chapman
Minority of One Solving the world's problems, one post at a time http://newsblogs.chicagotribune.com/steve_chapman/2008/09/why-congress-wi.html 
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