Bailout alternative offered by House Dems

by Mark Silva

Ron Paul and Dennis Kucinich are on top.

Let history record that, for one fleeting moment perhaps this week, the most anti-establishment candidates for either major parties' presidential nominations this year - two who stirred a lot of emotion but attracted few votes -- were riding the wave of the victorious majority of the House of Representatives.

They balked at the bailout.

Paul, the Republican congressman from Texas, delivered a scowling speech against the Bush administration's $700 billion bailout of the banks and other financial institutions stuck with bad mortgage debt on Monday - when it failed on the House floor by a vote of 229-205. And Kucinich, the Democratic congressman from Ohio, stood alongside him. Until now, opposition to the war in Iraq was largely what united these two occasional hotspurs of the political debate.

"The beneficiaries of the corrupt monetary system of the last three decades are now desperately looking for victims to stick with the bill after they have reaped decades of profit and privilege,'' Paul argued on the House floor..

Kucinich calls this "a teachable moment'' in our times.

"Slowly, like the Titanic turning around, sentiments on the Hill shifted, and we heard congressmen capitulating and changing their tune a little, desperately trying to find ways to salvage the bailout without completely enraging their constituencies," Paul wrote on his Web site before the vote on the bailout, which he feared would succeed. "Inevitably, it appears Congress will call their constituents' bluff and the bailout will pass, because that is the habit Wall Street and Washington have fallen into.''

Inevitably, perhaps, the Bush administration will win some variant on the bailout, sweetened perhaps with some lures to make it more palatable to just a few holdouts in both parties.

"Lipstick on a bailout,'' Paul calls it.

But then, Paul and Kucinich will return to the vocal minority.

But for now, they are on top, and Kucinich's own explanation of the bailout, how the Treasury's purchase of $700 billion in bad mortgage debt - with money that ultimately the Treasury will have to borrow from the credit markets - is worth the reading, no matter what anyone thinks of the deal:

by Frank James

A day after the House voted against the Bush Administration's $700 billion Wall Street bailout, the expectation that the legislation will will be brought up again led to so much incoming traffic from angry constituents that it slowed the House website to a crawl when it was accessible at all.

Many House members weren't even around since the chamber was off for the Jewish holiday Rosh Hashanah. But that didn't seem to matter. A congressional aide told me Capitol Hill techies were working to fix the problem and the site does seem better than it was a few hours ago when it was essentially frozen just like those credit markets we keep hearing about.

By James Oliphant

WILMINGTON, Del.--Joe Biden walked into the Pit Tuesday.

As a metaphor for his upcoming debate with Sarah Palin, you could do worse.

But this was the Charcoal Pit, a mom-and-pop diner north of the city and Biden was only making a brief public appearance, a break from the build-it-up, break-it-down debate prep taking place at a downtown hotel.

Biden was there, ostensibly, to have lunch with his son, Beau, the state's attorney general. Beau Biden, a captain in the National Guard, is being deployed to Iraq on Friday, the day after the vice presidential debate.

But he was also there to show his face for the television crews that have been parked here in Wilmington all week with little to do but shoot footage of each other. Biden has been out of public view since Sunday, huddled with advisers and Michigan Gov. Jennifer Granholm, who has been playing the role of Palin.

They have constructed a makeshift stage in a converted gym at the hotel. Biden Monday spent much of the day and evening there.

In an odd way, there may be more pressure on Biden Thursday than Palin, despite the withering criticism she's absorbed since her halting interview with CBS' Katie Couric last week.

by Mark Silva

In that continuing series that is the Katie Couric interview of Sarah Palin, the Alaskan governor explains what she meant by suggesting that she has been listening to speeches by her Democratic counterpart, Joe Biden, since she was "in like 2nd Grade.''

"I do look forward to Thursday night and debating Sen. Joe Biden,'' Palin had said Monday in Columbus, Ohio. " We are going to talk about those new ideas, new energy for America. I'm looking forward to meet him too. I've never met him before. But, I've been hearing about his senate speeches since I was in like 2nd grade.''

Couric, the CBS Evening News anchor, asks Palin what she meant by this in an interview airing this evening.

"You made a funny comment,'' Couric tells Palin in the interview, "you've said you have been listening to Joe Biden's speeches since you were in second grade.

"It's been since like '72, yah,'' says Palin -- Biden, who will turn 66 in November, was first elected to Congress in 1972.

. "You have a 72-year-old running mate,'' Couric reminds Palin, 44, of the candidate at the top of her ticket, Sen. John McCain. "Is that kind of a risky thing to say, insinuating that Joe Biden's been around awhile?''

"Oh no, it's nothing negative at all,'' Palin says. "He's got a lot of experience and just stating the fact there, that we've been hearing his speeches for all these years.

"So he's got a tremendous amount of experience and, you know, I'm the new energy, the new face, the new ideas,'' Palin says, "and he's got the experience based on many many years in the Senate and voters are gonna have a choice there of what it is that they want in these next four years.''

(Photo of Sarah Palin in New York, above,by Henny Ray Abrams / AP. Phot of Joe Biden in Green Bay by Darren Hauck / AP.)

by Christi Parsons

RENO--Barack Obama apologized to voters who showed up for his rally here this morning expecting a "rip-roaring" speech.

Instead, he was going lecture a little about the crisis on Wall Street, he said -- and ask the crowd of 12,000 to reset their view of the mess.

For one thing, he said, "bailout" is no longer the best word to use for the $700 billion plan calm the markets and ease the flow of credit.

"When you call it a bailout, nobody's in favor of a bailout," Obama said. "But this is not a plan to just hand over $700 billion of your money to a few banks on Wall Street."

Voters have a right to expect a greater promise of protection, he said, in the form of increased government insurance coverage for the individual bank accounts of consumers.

The message was very similar to what Republican John McCain is saying on the campaign trail today. Like Obama, McCain is calling for an increase in the insurance the FDIC provides for individuals.

Such a bonus could help the sales pitch for the plan, which McCain also suggests terming a "rescue" instead of a bailout.

Both presidential candidates pressed their case on the campaign trail, preferring to deal with the Bush administration and leaders in Congress by phone.

by Mark Silva

Who wins, Palin or Biden?

A new Marist Poll shows that more voters nationwide expect Joe Biden to win Thursday night's vice presidential debate. Forty-five percent of those surveyed Sept. 24-25 expect Biden to beat his opponent in the debate, while 36 percent expect Sarah Palin to make a better showing.

The breakdown on those expectations: 61 percent of the voters survyed said Biden will have a greater understanding of the issues, and just 28 percent said Palin will.

Yet that certain personal charm that Palin has brought to the ticket is not unnoticed: 65 percent of the voters surveyed expect Palin to "come across as more likeable,'' while just 23 percent expect that of Biden.

However, neither Biden nor Palin have high ratings in this survey of 693 registered voters. With its possible 4 percentage-point margin of error in Marist College poll, the survey found just 49 percent of those surveyed holding a favorable impression of Palin, 45 percent Biden.

The stakes in this prime-time test of a candidate with decades of experience against one with relatively little, and all the media attention attracted by Palin, who ironically has allowed little media questioning of her, could contribute to a better-watched debate than Barack Obama and John McCain presented. The audience for Friday night's premiere presidential debate was 52 million, according to Nielsen Media Research, which did not rank in the Top-Ten watched debates of the past few decades.

Palin's performance in network news interviews has accentuated questions about the readiness of the first-term governor and former mayor of tiny Wasilla for not only the vice presidency, but also the White House, should something befall McCain after possible election as president.

Late-night comic parodies of Palin have fueled an image of goofiness unbecoming a candidate for the highest offices.

At the same time, the buzz about Palin has contributed to perhaps the lowest setting of expectations for anyone entering a national debate in modern times.

By Andrew Zajac

One of the weird little ironies in the massive failure of political leadership in Monday's defeat of the Wall Street bailout package involves the role of Republican Minority Leader John Boehner.

After striking a deal with Democrats, Boehner was unable to deliver his caucus. Somewhere, Vernal Riffe and Corwin Nixon are groaning and rolling their eyes.

Boehner has spent the last 17 years in the House, but he cut his political teeth in the Ohio House of Representatives under legendary Democratic Speaker Riffe and Minority Leader Nixon, a canny survivor of numerous plots against him by his own colleagues.

If Boehner learned nothing else from them, he should have learned how to count votes.

by Frank James

No signs yet that the Era of Good Feelings is about to break out in the nation's capital. Check out this press release from the office of House Minority Leader Rep. John Boehner:

Boehner Statement on Economic Rescue Package

"The presidential candidates' support for increasing the FDIC cap is welcome news. Increasing the FDIC cap is a proposal put on the table by Roy Blunt and House Republicans but ruled out by Democrats during the negotiations that led to yesterday's unsuccessful vote."

Not quite as bad as a poke in the eye with a sharp stick but a poke no less. Boehner's press office forgot to add the last sentence of "N'yah-n'yah-n'yah-n'yah-n'yah."

by Frank James

A new TV ad from Sen. John McCain's presidential campaign strives to tie Sen. Barack Obama to the nation's current economic anxiety by linking him to the subprime mortgage crisis which helped trigger the current financial quagmire by claiming that while the Republican nominee tried to reform Fannie Mae and Freddie Mac the Democrat stood by "silent."

Called "Rein In," as in rein-them-in, the ad even features video of former President Bill Clinton blaming Democrats for impeding reform of the two government-sponsored enterprises that were taken over by the federal government a few weeks ago after they faced insolvency.

Here's the ad's transcript:

ANNCR: John McCain fought to rein in Fannie and Freddie.

JOHN MCCAIN: I'm John McCain and I approve this message.

by Frank James

Take it for what it's worth, but according to the traders at Intrade Sen. Barack Obama now has a better than 63 percent chance of becoming president compared with Sen. John McCain's just over 36 percent chance of winning the White House.

Obama's trading chart with Monday's close.

McCain's trading chart with Monday's close.

(Photo: SAUL LOEB/AFP/Getty Images)

by Frank James

As the fingerpointing continues following the House's failure to pass the $700 billion bailout, a lot of blame is going to Treasury Secretary Henry Paulson Jr. for first trying to run roughshod over Congress and the sensibilities of taxpayers until he realized that approach was doomed to failure.

Paulson is being singled out for crafting an initial proposal that was so offensive to many Americans and members of Congress in how it sought vast new and unreviewable powers for the Treasury Secretary.

With the controversial three-page proposal he dropped on Congress last week, he wound up creating a wave of outrage so huge it couldn't be overcome by the time yesterday's vote occured.

The very same hard-charging qualities that led him to be such major success and riches on Wall Street as investment bank Goldman Sachs' chairman and chief executive, it's thought, caused him to be insensitive to how consensus is formed in Washington and how major legislation must be marketed to the American people.

Interviewed on CNBC this morning, Steve Forbes, chairman and CEO of Forbes Inc., said "Paulson, with House Republicans, has been about as effective as an angry drill sergeant talking to raw recruits."

Meanwhile, Paulson is also being blamed for the worsening condition of the credit markets, especially in the short-term lending area called commercial-paper, resulting from the decision to allow Lehman Brothers to go belly up.

Here's an excerpt from yesterday's Wall Street Journal:

by Jim Tankersley

One of the most important qualities in a president - and one of the hardest for voters to gauge on the campaign trail - is the ability to move key pieces of his or her agenda through Congress. As we learned in the Bill Clinton years, it's one thing to promise universal health care in a New Hampshire living room and another to gather the votes to pass it into law.

The tribulations of a power-sapped president were on full display yesterday, when a $700 billion financial bailout package that President Bush called essential for the nation's economy died in the House: "If there was any doubt that President Bush had been left politically impotent by his travails over the last few years and his lame-duck status," the New York Times' Jackie Calmes wrote in a news analysis, "it was erased on Monday when, despite his personal pleas, more than two-thirds of the Republicans in the House abandoned the plan."

Oddly enough, the failure gives both men running to replace Bush a rare pre-election chance to flex their vote-hoarding muscles.

It's simple math: Both John McCain and Barack Obama count, among their earliest and most fervant congressional supporters, at least 10 House members who opposed the bailout on Monday. These are representatives who endorsed McCain and Obama this time last year, well before the Iowa caucuses, at a time when Hillary Clinton and Mitt Romney were leading their respective parties' Capitol Hill endorsement races.

In other words, these are the true McCain and Obama believers in Washington. If just 12 of them change their votes - out of 22 - the bailout passes.

by Mark Silva

President Bush, insisting that Congress act on a stalled financial market rescue, said today that the nation's economy is "in an urgent situation, and the consequences will grow worse each day if we do not act...

"If our nation continues on this course,'' Bush said, "the economic damage will be painful and lasting.''

The morning after the House narrowly rejected the $700 billion financial market bailout that his administration is trying to push through Congress - and the Dow Jones average suffered a 7 percent slide on the New York Stock Exchange, the largest point-slide ever, and biggest percentage dip since the Black Monday of October 1987 - Bush is making a renewed pitch for his plan.

"I'm disappointed by the outcome, but I assure our citizens and citizens around the world that this is not the end of the legislation,'' Bush said in a statement delivered from the White House. "It matters little what path a bill takes to become law. What matters is that we get a law.''

The measure is essential to help lenders "resume the flow of credit to consumers and businesses and allows the American economy to get moving again.,'' Bush said. "I realize that this is a difficult vote for members of Congress... But the reality is that we are in an urgent situation and the consequences will grow worse each day if we do not act.''

The bill authorizes the Treasury to spend up to $700 billion on bad mortgage-related assets, freeing banks and other financial institutions of frozen assets that are "clogging'' the system.

"That no question is a large amount of money,'' Bush said. "We're also dealing with a large problem... but to put that in perspective, the drop in the stock market yesterday represented more than a trillion dollars in losses.''

"Ultimately we expect most if not all of the tax dollars we invest will be paid back,'' Bush said of the $700 billion.

"We're facing a choice between action and the real prospect of financial hardship for millions of Americans,'' he said.

"Congress must act ... Our economy is depending on decisive action for the government,'' the president said. "The sooner we address the problem the sooner we can get back on the path of growth of job creation... I am confident that we will deliver.''

by John McCormick, updated

With savers increasingly worried about their money, Sen. Barack Obama and Sen. John McCain called today for an increase in federal deposit insurance from its current cap of $100,000 to $250,000.

In a statement, the Democratic presidential nominee said the move would "potentially broaden support" for a proposed government bailout plan that failed to pass in the House on Monday, triggering the largest one-day point drop by the stock market in history.

Obama said increasing the maximum for government insurance from the current $100,000 would help ease some concerns in the economy.

"While that guarantee is more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs," he said. "The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation."

Speaking on CNN's "American Morning," McCain said he recommended to President Bush on Tuesday morning that the limit on federally insured deposits be raised to $250,000.

Obama said the proposed increase in the FDIC limit should be part of the whatever new proposal Congress fashions. He said he would be talking to congressional leaders today about his proposal.

Under current limits, FDIC insurance guarantees bank deposits of up to $100,000. But if a bank fails, deposits above that limit are not necessarily safe.

by Mark Silva

John McCain, who "suspended'' his campaign for a day last week and went to Washington to work on the federal bailout talks, insisted today that Congress will keep working until it gets the "rescue'' right - suggesting they stop calling it a bailout.

"We haven't convinced people that this is a rescue effort not just for Wall Street but for Main Street,'' McCain said in an appearance on CNN's American Morning. "All over America, people are going to lose credit... .We didn't do a good enough job.''

Asked about his own influence - and the fact that the entire Arizona congressional delegation in the House voted against the $700-billion measure that collapsed in a 228-205 vote on Monday, McCain said: "If I think I can do some good, I'll do it... I may fail the second time or the third time, but we'll get the job done.''

Reminded that he had said last week that he would stay in Washington until a deal was reached, the senator, campaigning in Iowa this morning, was asked what he is doing this week.

"I will do whatever is necessary. I spoke to the president this morning,'' he said. "I recommended the Treasury's exchange stability fund, which has $250 billion.''

McCain, like Democratic rival Barack Obama, also is calling for an increase in the insurance that the FDIC provides for the bank accounts of individuals - raising the coverage from $100,000, where it has stood for nearly three decades, to $250,000. This could be one sweetener that makes the rescue bill more palatable to Republicans protesting the measure does nothing for taxpayers.
.
"The first thing I'd do is say,'Let's not call it a bailout,'' McCain said this morning. "Let's call it a rescue. Because it is a rescue of Main Street America..."

by Mark Silva

So much for Friday night debates.

The TV viewing audience for the premiere presidential debate of the season between Republican John McCain and Democrat Barack Obama drew 52.4 million TV viewers, according to Nielsen.

That's down 16 percent from the audience that President George W. Bush and Democrat John Kerry drew in the first debate of 2004 -- 62.5 million viewers.

What's worse, for the 2008 presidential lineup, is their audience trailed the viewership of debates since 1976, according to Nielson - Ford-Carter 69.7 million in their first run, Bush-Clinton-Perot 69.9 million in their first run.

The tops of all: Ronald Reagan and Jimmy Carter on Oct. 28, 1980: 90.6 million.

For the rundown on debate TV audiences, see Nielsen.

Now there's a good chance, considering these numbers, that the debate of the '08 running mates this week - Democrat Joe Biden and Republican Sarah Palin - might just outdraw the top of the ticket in their premiere debate. It is a Thursday, however.

We know Tina Fey will be watching.

by Mark Silva

If you've been following those electoral vote tracking maps which Republican strategist Karl Rove has been kindly sharing with us, you'll remember that Republican presidential nominee John McCain gained some ground after the presidential nominating conventions..

But since the economy has headed south, Democrat Barack Obama has gained in the polling in states that will settle the presidential election contest.

With 270 electoral votes needed to win the White House, Rove's newest tally of the state polls as of Sunday shows Obama favored in states holding 259 votes -- up 48 - from the last review just four days earlier - and McCain favored in states holding 163 - down 26 from that previous tally.

The votes available in "toss-up states,'' such as Florida and others where the polls are too close for comfort for anyone in the latest polling: 116, down 22.

"It's too soon for the 29 state polls released since last Wednesday to reflect the post-debate political environment, but it's clear that the recent economic news has been favoring Barack Obama,'' Rove reports.

"Obama now holds his largest lead over McCain since July 17,'' Rove notes of the electoral tally. " With 36 days remaining before the election, each candidates has the time and ability to change the dynamic of the race - and I am confident that will happen several times more.''

by Mark Silva

When the Democrats put Sen. Chris Dodd in charge of the powerful Senate Banking Committee, Connecticut's senior senator outlined "generally pro-industry positions, but pledging to put consumers -- and the long-term health of the economy -- first,'' colleagues at the Hartford Courant report in a review of Dodd's own fundraising..

"At the end of my tenure on this committee," Dodd said in early 2007, "I want it to be said that the safety and soundness of our financial institutions was not weakened on my watch."

"A year and a half later, Dodd acknowledges that the nation's finances are in an "economic maelstrom.''' note Matthew Kauffman and Jesse A. Hamilton, reporters at the Courant, a Tribune Co. newspaper. "And while Washington engages in an urgent search for after-the-fact fixes, there is also plenty of finger-pointing, and there are enduring questions about whether campaign cash -- millions and millions in campaign cash -- blinded Dodd and other overseers to the excesses of industry.

"Financial-sector firms -- mortgage firms, insurance companies, accountants, brokerage houses, hedge funds -- are among the most generous political donors in America, lavishing more than $1 billion on candidates this decade. And in Congress, few politicians have fared better than Dodd. During the past 20 years, PACs and employees of finance-related firms have contributed more than $13 million to Dodd's election efforts, including nearly $6 million in the past two years. Among members of Congress, only leading presidential candidates -- Hillary Clinton, Barack Obama, John McCain and John Kerry -- have collected more money from the sector,'' they report.

" But now, some of Dodd's heartiest patrons have become the poster companies for the Wall Street implosion: AIG Insurance, Lehman Brothers, Merrill Lynch and Bear Stearns. And although Dodd has emerged in recent weeks as a key player in efforts to stabilize the economy, the five-term senator is also facing criticism that he and others in Washington did too little, too late to rein in those generous companies before the crash.''

"We have a system where the special interests that give the most money tend to get policies out of Congress that are beneficial to them," said Mary Boyle, a spokeswoman for Common Cause, a nonpartisan advocacy group. "What we need is a system where the public is the beneficiary, and not special interests."

See the full report on Banking Chairman Dodd and the banking industry's money.

by William Neikirk

What a story! Embattled Main Street rises up to smite Wall Street. The hordes celebrate. The financiers fret. The little folks have flexed their muscles.

Too bad that isn't the real story. The real story could well be that Main Street shot itself in the foot, but won't know it until banks close, their savings are threatened, and layoffs accelerate. That could happen sooner than you think.

The $700 billion "bailout" plan for financial markets is aimed at getting rid of a large number of toxic mortgage-backed securities that no one wants to buy. But that is a mere means to an end.

The real purpose is to induce bankers to start lending again, so that credit markets do not completely seize up and send the economy spiraling into a deep, deep recession--a Main Street recession, if you will. When the banks don't lend, businesses can't find funds to keep afloat or to invest in job-creating enterprise.

Still, even if the bill should pass, there is no assurance this will work in this complex world.

The bill that took a licking in the House on Monday could be in for some more amending, something that might actually be more to Main Street's liking, another sweetener if you will. For instance, some are suggesting that the Federal Deposit Insurance Corp.'s guarantee of bank deposits should be enhanced--from $100,000 to perhaps $250,000.

Good morning.

Here are a few Washington events of note for Tuesday, September 30.

The debate over the $700 billion bailout of Wall Street will continue with no end in immediate sight.

The U.S. Chamber of Commerce is announcing its comprehensive energy plan with more than 75 recommendations for the next president and Congress.

The Institute for Policy Studies is hosting a discussion about the economics of inequality, market instability and the presidential race.

By Laura Olson

Four Illinois House Democrats voted against the economic bailout proposal,citing a lack of protections for homeowners and of stricter regulations to prevent a similar incident in the future. Five Illinois Republicans also voted against it.

The bill, which failed by a vote of 228-205, was supported by President Bush and congressional leaders as a painful, but necessary step to mend the economy.

Democratic Rep. Jerry Costello, who voted against the proposal, said he felt Congress was "moving too quickly" on a proposal of this size, and hasn't fully considered other options.

"What is essential is that Wall Street help pay for any program to heal the economy," Costello said in a statement. "$700 billion is too much to ask taxpayers to bear without a requisite sacrifice from the industry that bears much of the responsibility for bringing us to this point."

Others said the legislation failed to address the root cause of the financial crisis -- the mortgage industry.

"This bill is simply a Band-Aid, not a cure, for the financial crisis, and it does little for the hard-working Americans who will pay for it," Democratic Rep. Jesse Jackson Jr. said in a statement. "It does not go far enough in addressing the systemic and terminal problems of our financial system."

Jackson said a proposal would need to help homeowners restructure their mortgages to prevent foreclosure, address the need for a second economic stimulus, and outline new rules to increase transparency in financial-related industries.

The other two Illinois Democrats who voted against the bill were Reps. Bobby Rush and Dan Lipinski. The five Republicans who voted against it were Judy Biggert, Timothy Johnson, Donald Manzullo, Peter Roskam and John Shimkus.

Republicans Mark Kirk and Ray LaHood voted for the bailout bill, as did Democrats Melissa Bean, Rahm Emanuel, Danny Davis, Jan Schakowsky, Bill Foster, Luis Guiterrez and Phil Hare. Republican Jerry Weller did not vote.

by Mark Silva

Hand it to Sarah Palin: Showing up for another TV interview with CBS anchor Katie Couric within days after suffering the late-night arrows of comics making fun of her last Couric sit-down.

This time, however, the Republican vice presidential nominee brought the top of the ticket with her to the interview with Couric in Ohio, aired on the CBS Evening News this evening.

And both McCain and Palin were calling "gotcha journalism'' in that quoted comment of Palin's about Pakistan recently - though it wasn't a journalist whom she had addressed that day.

And both McCain and Palin, appearing together after Saturday Night Live had lampooned last week's interview of Palin by Couric, appear intent on quashing any suggestion that Palin is not prepared for the vice presidency.

"This is not the first time that I've seen a governor being questioned by some quote, "expert."'' McCain said. "I remember that Ronald Reagan was a cowboy.

""President Clinton was a governor of a very small state that had "no experience" either,'' he said. "I remember how easy it was gonna be for Bush I to defeat him. I still recall, whoops, that one. But the point is I've seen underestimation before.''

by Mark Silva

With leaders of both Democratic and Republican House ranks blaming each other for the initial failure of a $700-billion federal bailout for struggling financial institutions, congressional leaders plan to redouble efforts to approve a rescue this week.

"What happened today cannot stand. We must move forward,'' House Speaker Nancy Pelosi (D-Calif.), said after the House rejected the bailout, "and our work will not be finished until that is done.''

Despite a stunning setback in the first test of an agreement which leaders of both parties had reached with the White House over the weekend, leaders say the urgency of the financial crisis which the bailout is intended to ease demands that Congress provide a solution before recessing for the fall elections.

President Bush has warned of a "long and painful'' recession if the government does not act to unlock financial markets frozen by bad mortgage debt threatening a credit crunch at every level of the economy, threatening everything from home loans to car loans and credit cards.

Yet the Bush White House has proven unable in the first go-round to corral the president's own party in the House for a vote which the president has deemed essential and which fell just 13 short of approval. In the next 48 hours, with a Jewish holiday recess, reluctant Republican leaders voicing their own dismay about the plan will attempt to rally the forces needed, while Democrats scour their own ranks for a few converts.

The sharply divided House vote against the bailout on Monday - 228-205 - has exposed the depth of dissension within each party. While 60 percent of the Democrats voted for the plan, 95 still voted no. And the Republicans voted by two-to-one against the plan - by 133-65.

Rep. Ginny Brown-Waite of Florida voiced the objections of many fellow Republicans in complaining of being pressed to vote for "surely one of the biggest bailouts in American history.... With a gun to our heads.''

The breakdown has accentuated a rift between the presidential candidates as well. Republican Sen. John McCain, who "suspended'' his campaign for a day last week to return to Washington to take part in bailout talks, has faulted Democratic rival Barack Obama for "watching from the sidelines.

"It's not my style to phone it in,'' McCain said Monday, claiming of Obama: "At first he didn't get involved, and then he was monitoring the situation. That's not leadership. That's watching from the sidelines.''

Obama, who had joined McCain last week in a meeting with Bush at the White House, called Monday for patience that a solution will be reached.

"Now is not the time for fear, now is not the time for panic," Obama told a campaign rally in Colorado. "We may not be able to do everything overnight. It took a long way to dig us into the hole we're in . . . But I want you to understand, I know we can do it... Things are never smooth in Congress. It will get done."

by Christi Parsons and Ray Long

Westminster, Colo.--John McCain bet with $100 chips. Barack Obama threw nickels around like they were manhole covers.

Maybe that's why Obama thinks it's a subject worth harping on - even though both men are guilty of gambling in the company of lobbyists.

Betting habits of the presidential candidates is a hot topic on the campaign trail now, in the wake of a report that McCain played at a casino table he oversaw as a member of a Senate committee.

As even a casual player knows, you can learn a lot about a person by the games they play - and the places they lay down their money.

by Frank James

House Republican leaders are blaming the failure of the $700 billion Wall Street bailout on what they call a partisan speech by House Speaker Nancy Pelosi before the vote.

Pelosi, the House's top Democrat, outraged Republican members of their conference who might have been on the fence before her speech. By her words , she pushed them to vote against the legislation.

In a press conference, the House's top Republican, Rep. John Boehner, the Minority Leader, said:

I think that we need to renew our efforts to find a solution that Congress can support. I do believe that we could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House.

I mean, we were, we were -- we put everything we had into getting the votes to get there today. But the speaker had to give a partisan voice that poisoned our conference; caused a number of members, who we thought we could get, to go south.

A good part of this is obviously political theater. House Republican leaders would love many voters to come to believe in coming weeks that Pelosi was to blame as Republicans they hope to pick up congressional seats or, at the very least, not lose the seats they have.

Rep. Eric Cantor (R-VA.) even held a copy of her speech in his hands like it was a bloody shirt as he blamed her words for the bill's failure.

Here's the prepared version of Pelosi's speech:

SPEAKER PELOSI: Madam Speaker, when was the last time someone asked you for $700 billion?

It is a crisis that freezes credit, causes families to lose their homes, cripples small businesses, and makes it harder to find jobs.

by Christi Parsons

Westminster, Colo.--As Wall Street reeled from the failure of the House's first vote on the bailout package today, Barack Obama rushed to reassure investors and called on Congress to get back on track.

"There are going to be some bumps and trials and tribulations, and ups and downs, before we get this rescue package," Obama told the crowd at a local high school, moments after word of the vote spread through the gymnasium.

"Things are never smooth in Congress," he said. "It will get done."

Obama delayed his appearance while he talked to Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi and other Congressional leaders, aides said.

After taking the stage, he publicly urged members of Congress to get the package passed quickly -- but also to recognize that the work won't end there.

"We have more to do to make sure that Main Street is getting the same kind of help that Wall Street is getting," he said.

by Mark Silva and updated

In a sharply divided vote, with many members of both parties balking, the House today rejected an unprecedented $700-billion bailout for the nation's banks and other financial institutions.

And on Wall Street, which Washington is rushing to offer a sign of relief, the Dow Jones average tumbled 777 points -- a record drop in points for any single day in the market's history, though not the biggest plunge in percentage. It rested at 10,365.

The market already was declining as the House started debating but then the collapse of the bailout on the House floor echoed on Wall Street.

"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid."

The markets turned highly volatile as it became clear that the bailout wouldn't win the votes needed in Washington. Still, in percentage terms, the decline remained well below drops of more than 20 percent on "Black Monday,'' October 1987. and the Depression.

After more than a week of intensive negotiations, with the Senate prepared to act on the plan Wednesday, the House's contentious rejection of a measure which the Bush administration has deemed essential to stabilizing a shaken economy cast into doubt what congressional leaders still might achieve before their adjournment for the fall election campaigns.

President Bush, who pressed for a Treasury purchase of toxic mortgage-related assets threatening an economic crisis, has pushed Congress to approve it swiftly to avert a "long and painful recession.'' On Monday, Bush called the plan "an extraordinary agreement to deal with an extraordinary problem in our economy.... a bold bill that will help keep the crisis in our financial system from spreading throughout our economy.''

The House vote: 228-205 against the measure, with members of both parties reluctant to approve a deal approved by their leaders. Ninety-five Democrats and 133 Republicans voted no.

As leaders fell short of the votes needed for passage, they kept the clock open and pressured members to change their minds. In many minutes of arm-twisting, Democratic leaders added several votes to the yes column, but not enough for passage. The disarray in the chamber was palpable.

"I don't know that they get much tougher than this,'' House Minority Leader John Boehner (R-Ohio) said of the vote - as he voted yes. "Nobody wants to vote for this. They don't want to be anywhere around it. I don't want to be anywhere around it.''

Supporters insisted they were acting to avert a crisis that could freeze credit for consumers at every level - an action motivated by the welfare of Main Street, not Wall Street.

"I wish there was a better way, but I haven't seen it yet,'' said Rep. Tom Davis (R-Va.). "Failure to take this step today will almost certainly worsen the situation.... But politics is the art of the possible, not the art of the perfect. If this bill goes down, I don't think my colleagues want ownership of what will follow.''

Opponents decried the plan as a dangerous government intervention in the failings of Wall Street financiers driven by greed in the accrual of risky mortgage investments that ultimately backfired.

Rep. Ginny Browne-Waite, decrying "what is surely one of the biggest bailouts in American history,'' complained that lawmakers are acting with "a gun to our heads.'' Brown-Waite (R-Fla.) complained that Congress is rushing to the rescue of Wall Street financiers even as the FBI starts investigating possible criminal abuses in trading. "We could call this the in-out plan. As the FBI is going in, we're bailing out.''

by John McCormick

There was a time when political yard signs were free. No more.

Sen. Barack Obama's presidential campaign sent out an e-mail to supporters today encouraging them to put a sign in their yard -- and make a contribution of $15 or more.

"Make a donation of $15 or more before Tuesday's deadline and you'll receive an official Obama-Biden yard sign," the pitch says. "Your sign will arrive no later than Friday, October 17th, so you'll have plenty of time to show off your support and remind your friends and neighbors to vote for Barack."

The deadline referenced is Sept. 30, the final day of fundraising for the month.

For a T-shirt, the campaign is asking for $30 or more.

by Mark Silva

Who's doing a better job of dealing with the Wall Street crisis?

Barack Obama, according to a new survey.

Better than Republican presidential rival John McCain, the Gallup Poll has found, and better even than the Democratic leaders of Congress. Indeed, the Democratic senator from Illinois is the one figure in this survey whose approval ratings outweigh his disapproval ratings on this question.

Obama won the approval of 46 percent of those surveyed Friday and Saturday - before the congressional leadership agreement on a $700-billion bailout for the financial industry was announced on Sunesday.

Both Obama and McCain were rated better for their responses to the Wall Street crisis than their own parties in Congress were rated. Obama's approval: 46 percent. McCain's: 37 percent. Democratic leaders: 39 percent. Republican leaders: 41 percent.

The Gallup survey included interviews before, during, and after the first debate between Obama and McCain Friday night. The survey of 1,011 adults has a possible margin of error of plus or minus 3 percentage points.''

by Frank James

The Justice Department's Inspector General released a magnum opus of a report on the Bush Administration's controversial firings of nine U.S. attorneys.

Few people have had the chance to read the entire 356-page report. But if you read it from the back, you get the conclusions which sum up the findings.

The Justice Department investigators place much of the blame for the firings on Kyle Sampson, former Attorney General Alberto Gonzales's chief of staff, who conducted the firings pretty much on his own and apparently for no good reasons, according to the report.

But they don't let Gonzales and company off the hook. They blame Gonzales and his then Deputy Attorney General Paul McNulty for failing to oversee the process and then not telling the full truth about it.

The investigators do call for a special counsel to probe the firing of former U.S. Attorney David Iglesias saying that the circumstances of his firing, with allegations that he was fired for not pursuing voter fraud and public corruption charges against Democrats, requires an examination into whether criminal charges are required.

Attorney General Michael Mukasey announced that he was following the recommendation and naming the U.S. Attorney for Connecticut, Nora R. Dannehy, to run the investigation.

Mukasey said:

"Today's report is an important step toward acknowledging what happened, and holding the responsible officials to proper account. I hope the report provides a measure of relief to those U.S. Attorneys whose reputations were unfairly tainted by the removals and their aftermath. They did not deserve the treatment they received.

"The Report leaves some important questions unanswered and recommends that I appoint an attorney to assess the facts uncovered, to conduct further investigation as needed, and ultimately to determine whether any prosecutable offense was committed with regard to the removal of a U.S. Attorney or the testimony of any witness related to the U.S. Attorney removals. In the normal course, a report recommending further investigation would not be released until after the investigation and any resulting prosecution had been completed, for fear that disclosing publicly relevant facts and witness statements would hinder the investigation or prosecution. In this instance, the Offices of Inspector General and Professional Responsibility have made the judgment that the circumstances warrant a departure from this usual practice.

by Frank James

Nouriel Roubini, one of the economists who presciently warned that the financial markets and economy were headed for a day-of-reckoning, can't say enough about how bad he believes the Treasury's bailout is.

In a blog posting, this is the paragraph in which he sums it all up.

... The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.

Now keep in mind Roubini called the current crisis pretty accurately years ago. So he deserves to be listened to.

Roubini makes the important point that in other financial crises, the Treasury Department's preferred tack of buying toxic-assets wasn't the typical way government's injected money into ailing financial systems:

A recent IMF study of 42 systemic banking crises across the world provides evidence on how different crises were resolved. First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention. Of the 32 cases where the government recapitalized the banking system only seven included a program of purchase of bad assets/loans (like the one proposed by the US Treasury). In 25 other cases there was no government purchase of such toxic assets. In 6 cases the government purchased preferred shares; in 4 cases the government purchased common shares; in 11 cases the government purchased subordinated debt; in 12 cases the government injected cash in the banks; in 2 cases credit was extended to the banks; and in 3 cases the government assumed bank liabilities. Even in cases where bad assets were purchased - as in Chile - dividends were suspended and all profits and recoveries had to be used to repurchase the bad assets. Of course in most cases multiple forms of government recapitalization of banks were used....

by Mark Silva

This two-stage, $350-billion-plus-$350-billion "bailout'' of the financial markets that Congress debates this week is not really a bailout - that's what members are telling each other.

It's more of "a work-out of the problem, rather than a bailout,'' says Rep. Roy Blunt (R-Mo.), attempting to sell it to his reluctant party.

They could call it a "cook-out.''

That might make it more appealing.

But then, that would be a "cop-out'' if they attempted to change the subject.

Now that Democratic leaders are on the "look-out'' for Republican votes to cover them against any public outcry over the "bail-out,'' it will be telling to see which members "drop-out'' of the coalition that inevitably passes this economic rescue. If they don't "iron-out'' their objections, a few may "tune-out'' to the leaders' spin and "skip-out'' on that vote. They don't want to "sell-out'' voters and taxpayers. The vote will not be a "shut-out."

The political 'fall-out'' of the vote is another thing - particularly if the economy still "bottoms-out'' after the Treasury "buys-out'' all the bad "washed-out'' mortgage-related debt clogging the nation's credit markets. The credit crunch they are trying to "shake-out'' could become a "knock-out'' punch for the econmy.

If the Treasury "strikes-out'' with this attempt to avert a crisis, all of us will "lose-out.''

Now, the public's obligation to the new debt it incurs will "phase-out'' after Treasury "shells-out'' billions and then "clears-out'' the bad assets. in the end, the White House budget office says, it should be a 'wash-out.''

Yet, congressional leaders may be "tripped-out'' if they believe that everyone will accept that this plan is not really a "bail-out,'' but only a "work-out'' of the problem. The cost of the plan is enough to make the average American, "strung-out'' with economic problems of his own, "pass-out" right in the "check-out'' lane.

As they "rough-out'' and "flesh-out'' the plan for resistant "hold-out" members of Congress, some may "laugh-out'' loud, but leaders of both parties are certain to "stand-out'' and explain why it is necessary and "crowd-out'' the criticism. The urgency of the cause should "drown-out'' nay-sayers, who ultimately will be "left-out.''.

The 'turn-out'' of voters on Nov. 4 may ultimately explain what Americans think about the ability of either party's leaders to "ride-out'' the recession that appears inevitable. Here in the Swamp, though, we're starting to "burn-out'' on this thread.

So, what do you think? Give us a "shout-out.''

by Mark Silva

"I fully understand that this will be a difficult vote,'' President Bush said this morning of the vote facing the House today and the vote facing the Senate later this week.

That is the vote for a $700 billion investment of public money in a national financial crisis that threatens to freeze credit and thrust the nation into what he has said could be a "long and painful recession.''

The agreement reached by congressional leaders over the weekend envisions recovering much of the money invested, or all of it, by reselling the toxic mortgage debt that the government will be buying when the market turns around - and also by requiring the banks that benefit from this bailout to make up any remaining cost after five years if all the money is not recovered.

Nevertheless, the prospect of putting as much as $700 billion in taxpayer dollars on the line is causing members of both parties in Congress to question the greatest government intervention in the economy since the Great Depression. The House is expected to vote as soon as today, the Senate as early as Wednesday.

The congressional leaders' agreement -- and the president's message from the South Lawn of the White House this morning - is timed to ensure the tock market reopening today that stability will be restored and consumer confidence will be bolstered.
.
"Every member of Congress and every American should keep in mind, a vote for this bill is a vote to prevent economic damage for your community,'' the president said at a podium propped on the South Lawn this morning just after 7:30 am EDT.

Bush called the bill, which his administration sought and which was modified by leaders, "an extraordinary agreement to deal with an extraordinary problem in our economy... a bold bill that will help keep the financial crisis from spreading throughout our economy.

"I appreciate the leadership of members on both sides of the aisle who came together when our nation was counting on them.

"The bipartisan financial rescue plan addresses the root cause of the crisis,'' Bush said, his administration arguing that bad debt is "clogging'' the financial system and threatening to force the gears of the economy to "grind to a halt.... The federal government will be authorized to purchase these assets from banks and other financial institutions which will help free them to continue lending.

The plan "will help restart the flow of credit, so American families can meet their daily needs.. ..We will make sure that the American government is serious about restoring confidence.

"This bill commits up to $700billion of taxpayer dollars,'' the president said. "However, both the nonpartisan Congressional Budge Office and the Office of Management and Budget expect that the ultimate cost will be far less than that... In fact we expect that over time much or all of the money will be paid back.''

by Mark Silva

In the short run, congressional leaders have achieved their goal of producing an agreement Sunday on a federal bailout of banks and other financial institutions holding bad mortgage debts before the world's stock markets reopened.

But in the long run, the scope and still-unknown effects of the greatest government intervention in the financial markets since the Great Depression - and the remaining underlying instability of the nation's economy -- will impose a new political challenge for the next president and Congress elected in November. The situation already has reshaped the election campaign debate.

Congressional leaders face another immediate challenge this week - with the House expected to vote on the plan as soon as Monday, and the Senate as soon as Wednesday - in corralling enough votes to both pass it and present the controversial two-stage bailout as a bipartisan response to a national crisis.

While resistant House Republican leaders have agreed to it, many rank and file members still are balking at the unprecedented bailout of the nation's financial institutions, piling as much as $700 billion of new federal debt on the nation's taxpayers.
Congressional leaders are attempting to frame the measure as their own best compromise on a plan that the Bush administration proposed which they are now calling unacceptable.

This means, in part, dividing the bailout into two phases, starting with $350 billion but requiring congressional approval for a second pay-out. And it includes a demand that, if the government does not recoup all the money that it invests in reselling mortgage debt that it purchases, banks after five years must pay the balance.

"This is the administration's problem,'' House Speaker Nancy Pelosi (D-Calif.) said Sunday, "they sent us their bill, we did our best to improve it, and now we'll see how much support we can get... We will have to have bipartisanship to pass it.''

President Bush, who proposed the Treasury Department rescue and has pushed for it with national television and radio addresses, calls it essential to averting "financial panic' in frozen lending and a "long and painful recession. Congressional leaders agree that it is essential in averting a freeze in credit for everything from home loans and car loans to student loans and credit cards.

"Getting this done soon, promptly, is absolutely critical to the confidence of the markets,'' Sen. Judd Gregg (R-N.H.), one of the lead negotiators, said Sunday, predicting the votes to approve it this week. "The option of not passing it is not acceptable.''

Resistant Republican leaders are calling on their colleagues to support the plan - if their "conscience will allow them.''

"The American people are angry, angry about the situation they find themselves in,'' House Minority Leader John Boehner (R-Ohio) said Sunday night after hours of closed-door meetings with fellow Republicans balking at the plan. "My colleagues are angry about the situation they find themselves in. Nobody wants to have to support this bill.''

In selling the plan to his party, Rep. Ray Blunt (R-Mo.) is calling it "a work-out of the problem, rather than a bailout.''

How many Republican votes can they deliver? "We don't know,'' Boehner said, "We've made it pretty clear to our members that we are supporting this bill.... I'm encouraging every member of our conference whose conscience will allow them to support this bill.''

by Mark Silva

Sarah Palin: Growing target.

In the few weeks since Republicans nominated the first-term governor of Alaska and ex-mayor of tiny Wasilla for vice president, Palin has provided growing fodder for late-night comics and even serious conservative commentators, one calling for her withdrawal.

Saturday Night Live's Tina Fey, perfecting a spot-on impersonation of the designer-bespectacled political phenomenon, played Palin sitting for an interview with CBS' Katie Couric.

That trip to New York City was terrific, the Fey Palin said Saturday night. She loved "that goofy evolution museum'' and the United Nations, too: "So many interesting people. Though I have to say, I was disheartened by how many of them were foreigners.''

As for her suggestion that she is attuned to foreign affairs because Alaska sits next-door to Russia, Fey's Palin explained: "Every morning, when Alaskans wake up, one of the first things they do is look outside to see if there are any Russians hanging around.... It's our responsibility to say, you know, 'Shoo! Get back over there!'''

Yet the real Palin's apparent inability to address some serious questions - an impression left by the real interview with Couric last week - is causing some to question Palin's nomination.

Conservative commentator Kathleen Parker, writing of the "Palin Problem'' in National Review Online, called for her to quit.

""Like so many women,'' Parker wrote, "I've been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I've also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful... My cringe reflex is exhausted.''

. Now, Palin also has energized social conservatives, with many hailing the working mother of five, staunch opponent of abortion and fundamentalist Christian whom Sen. John McCain tapped for a running mate. Together they draw big crowds.

Palin's own parents come to her defense this morning on CBS' The Early Show.

Her dad, Chuck Heath, explains: "They have to get to know Sarah Palin... There is a good side of Sarah Palin, and they're digging and digging for the bad side and there is no real bad side.''

As for McCain:

"It's a free country,'' he said of the criticism for Palin Sunday on ABC News' This Week. "I'm so excited about the reaction that Sarah Palin has gotten across this country, huge turnouts, enthusiasm, excitement...

"Go right ahead and criticize,'' McCain said. "I'm so happy that she is part of the team.''

Watch CBS Videos Online

Good morning.

Here are a few Washington events of note for Monday, September 29.

Defense Secretary Robert Gates is discussing the 2008 National Defense Strategy.

The National Center for Suburban Studies at Hofstra University is revealing the results of its poll on suburban voters.

The Brookings Institution is hosting a discussion on the most promising poverty-reduction strategies for the next decade.

by Mark Silva and updated at 8:30 pm

The 110-page bailout - the one offering the nation's "clogged'' financial markets a $350-billion purchase of bad mortgage debt and then another $350 billion if Congress buys it again - is ready for a vote of the House as soon as Monday and then the Senate as soon as Wednesday, provided that resistant members go along with the deal their leaders have made.

The bill may be available for reading at the Web-sites of the House speaker - http://speaker.house.gov - and at Barney Frank's committee - http://financialservices.house.gov - but, if the nation's credit markets have not already frozen, the House's Web-sites have, probably in the face of demand for these documents.

So the Swamp is posting the 110-page bailout here:bailout bill.pdf

The White House tonight insists that it is not a bailout, burt rather an investment that will avert a crisis, and predicts that the government will recoup its money. See the lettter from the Office of Management and Budget: Nussle letter.pdf

And a section-by-section legislative analysis of the measure follows in the page below.

House Speaker Nancy Pelosi, calling Treasury Secretary Henry Paulson's original three-page outline "unacceptable,'' has indeed signed off on something similar. What's added though is a two-stage authority for Paulson and probably his successor to plow as much as $700 billion into bad mortgage-related assets, and then a requirement that, if the government does not make all the money back in reselling the paper as the market improves, the financial institutions that benefited from the buyout will have the repay the balance after five years - not all at once, no one balloon payment.

There are other measures as well: Limitations on the pay for top executives at firms benefiting from this transaction - a first for the nation, as Rep. Frank (D-Mass.) puts it. And there is bipartisan oversight with not only an appointed panel watching over the Treasury's shoulder, but also the oversight of the Governmental Accountability Office and an independent inspector general.

"Now we have to get the votes,'' Senate Majority Leader Harry Reid (D-Nev.) said today. The House may vote as soon as Monday, and the Senate as soon as Wednesday.

"This bill, while not perfect, will help stabilize the economy,'' Reid said, "and I think it's going to help the taxpayers.''

"It's not a bill that anyone of us would have written, it's a much better bill than we got,'' Frank said. "This will be the first time in the United States that anything has been done to curtail executive compensation.... We have a recognition in this bill that if there is a shortfall in the amount of money collected as we sell these assets than it must be'' met by the financial institutions that benefited, not all in a year, but it must be repaid.

"Now we'll see how much support we can get,'' said Pelosi, counting on House Republican leaders who balked but then finally bought into compromise plan to bring some votes to the table. This is it, Pelosi said -- this package is locked down and will not be amended. But the Democrats clearly do not want to go these 110 pages alone. "We will have to have bipartisanship to pass it.''

Resistant Republican leaders are calling on their colleagues to support the plan - if their "conscience will allow them.''

"The American people are angry, angry about the situation they find themselves in,'' House Minority Leader John Boehner (R-Ohio) said tonight after hours of closed-door meetings with fellow Republicans balking at the plan. "My colleagues are angry about the situation they find themselves in. Nobody wants to have to support this bill.''

"At the end of the day, there really are no taxpayer funds at risk here,'' Boehner said. "We do know what's at risk, and that's our economy. And that's why we're supporting this bill.''

In selling the plan to his party, Rep. Ray Blunt (R-Mo.) is calling it "a work-out of the problem, rather than a bailout.''

Rep. Eric Cantor (R-Va.) says the bill's insurance provision insures that financial institutions will help with the problem.

How many Republican votes can they deliver? "We don't know,'' Boehner said, "We've made it pretty clear to our members that we are supporting this bill.... I'm encouraging every member of our conference whose conscience will allow them to support this bill.''

by Mark Silva and James Oliphant

There was a new passenger on Joe Biden's campaign plane today.

And it's not just because Democratic presdential nominee Barack Obama and running mate Biden were campaigning in Michigan.

The Michigan govenror, Jennifer Granholm, is standing in for the Alaskan governor, Sarah Palin, in debate practice as Biden prepares to meet Palin for their one televised debate on Thursday. Granholm flew home with Biden to Wilmington, Del., this evening for the looming debate practice

Maybe it's the glasses?.Or maybe Tina Fey was busy.

by Mark Silva

Voters who watched the first presidential debate between Barack Obama and John McCain - nearly two-thirds of those surveyed on Saturday in Gallup's daily tracking surveys - gave Democrat Barack Obama higher marks than Republican John McCain.

Among those who said they saw Friday night's premiere debate, 46 percent said Obama did a better job and 34 percent said McCain did, according to a USA Today/Gallup Poll run Saturday.

The Gallup daily track of the past three days, Thursday through Saturday, also has found that Obama has gained a wider advantage over McCain - an eight-percentage point lead, 50-42.

"The data show a predictable pattern of response from Republicans and Democrats,'' Gallup notes of the debate-ratings:

"Seventy-two percent of the former and 74 percent of the latter said that their party's candidate did the better job in the debate. This reinforces the conventional wisdom that many viewers watch a debate through their preexisting perceptual framework and end up with nothing more than reinforcement for what they believed before the debate began.

"But among the crucial group of independents who watched the debate -- those most likely to actually be swayed by what transpired, Obama won by 10 points, 43 to 33 percent..

"Not only did Obama win the debate among debate watchers, they say that their attitudes towards the Democratic candidate also improved as a result,'' Gallup reports. "Thirty percent of debate watchers said they came away with a more favorable image of Barack Obama, while just 14 percent said they had a less favorable image.

"On the other hand, John McCain did not fare as well. Just as many watchers said that they developed a less favorable image of John McCain - 21 percent -- as said they gained a favorable image of McCain as a result of the debate.

Questions about the debate were posed to a random sample of 1,005 adults as part of the Gallup Poll Daily tracking program on Saturday. Of the total sample of adults, 63 percent said they had watched the debate. Another 12 percent said that they had seen, heard, or read news coverage of the debate, and the rest said they had neither seen the debate nor news coverage of it.

by James Oliphant

DETROIT--Backed by an increasing number of polls that show his campaign gaining momentum, Barack Obama brought his economic recovery message to distressed Detroit Sunday.

In doing so, he sharpened his attacks on rival John McCain over the crisis gripping the nation's financial sector.

"Sen. McCain doesnt get it. He doesn't understand the storm that hit Wall Street hit Main Street long ago," Obama said, standing before the Detroit Public Library. " That's why his first response to the greatest financial meltdown in generations was a Katrina-like response. He sort of stood there. He said the fundamental of the economy are strong. It's why he's been shifting positions these last two weeks, looking for photo-ops, trying to figure out what to say and what to do."

McCain, for his part, spent a second day in Washington, as congressional leaders said they had come to an agreement on legislation to rescue the ailing markets. Top McCaina adviser Steve Schmidt, appearing on "Meet the Press" Sunday, said McCain played a pivotal role in bringing Republicans into the fold to hammer out a final package. (Just how many Republicans are in that fold remains to be seen.)

A new USA Today/Gallup Poll taken over the weekend gave Friday's debate performance to Obama by a rather large edge: 46 percent to 34 percent. The results correspondent with recent polls taken by CBS News and CNN, both of which said Obama was the victor.

Meanwhile, a series of national polls are showing independents beginning to break for Obama as well, as concerns over the economy are becoming paramount.

Obama was joined in Detroit by his wife, Michelle, his running mate, Joe Biden, and Biden's wife, Jill.

In a Quinnipiac University poll taken last week, 48 percent of 1,364 likely Michigan voters said they'd back Obama, while 44 percent said they'd back McCain

But this is a state where Obama did not campaign during the primaries and one where McCain holds several demographic advantages.

So expect both candidates, and their running mates, to be here again, often, in the days ahead.

by Mark Silva

The beating goes on at Saturday Night Live, where a whole cast of impersonators has turned out to explain the presidential election campaign underway.

That includes the eyebrow-raising interview that Republican Sarah Palin had with CBS News anchor Katie Couric last week. Palin (actually Tina Fey, the SNL impersonator) said she had a great time in New York, Todd and the kids enjoyed the home of the "liberal media elite'' and she particularly enjoyed "that goofy evolution museum.'' The U.N. was great too -- except there were so many "foreigners.''

And it includes a take on the first presidential debate, with Darrell Hammond and Fred Armisen in the hot seats and a return engagement by Chris Parnell as moderator.

SNL's Amy Poehler played Couric, asking what it is about Alaska's proximity to Russia that gives Palin so much foreign policy expertise.

"You got Alaska here, this right here is water, and this is Russia. So, we keep an eye on them,'' Palin (Fey) explained. "Every morning, when Alaskans wake up, one of the first things they do, is look outside to see if there are any Russians hanging around. And if there are, you gotta go up to them and ask, 'What are you doing here?' and if they can't give you a good reason, it's our responsibility to say, you know, 'Shoo! Get back over there!'''

Promising to do everything possible to spread democracy in the world and then pressed about how to do that, Palin (Fey) paused and then begged:

"Katie, I'd like to use one of my lifelines.''

See the clips here, and the transcript below, courtesy of NBC:

by Christi Parsons

Democrat Barack Obama says he will most likely support the bailout plan hashed out over the weekend - mainly because it contains provisions for which he claims credit.

"Some core principles that I set forth at the beginning of this crisis were incorporated," Obama said on CBS' Face the Nation this morning.

While some Republicans are crediting GOP presidential nominee John McCain for the agreement, Obama said he himself played a significant role.

"For two weeks, I was on the phone every day" with Treasury Secretary Henry Paulson and Congressional leaders, Obama told host Bob Schieffer. "I was pushing very hard and involved in shaping those provisions."

For all McCain's talk about "being a maverick," Obama then alleged, the Republican candidate's support for President Bush's economic policies is part of the reason the country is in this financial mess.

by Mark Silva

Sen. John McCain, invoking Teddy Roosevelt only four times this morning as part of his rationale for being "in the arena'' of the federal financial bailout, said that he is likely to support the agreement which congressional leaders have reached.

"I'd like to see the details... but hopefully yes,'' McCain said in an appearance on ABC's This Week with George Stephanopoulos. "This is something that all of us will swallow hard and go for...''

Democratic rival Barack Obama also offered a cautious endorsement of the deal:

"It appears, at least... that some core principles that I set forth at the beginning of this crisis were incorporated, the issue of insuring that we have some strong oversight... and the final thing, the issue of executive compensation,'' Obama said in his appearance on CBS News' Face the Nation., "I'm going to be reviewing the language over the next days....Ultimately, I feel that we have to get something done, so if I feel those are meaningful provisions... then my inclination is to support it.''

McCain, who was criticized by some on Capitol Hill for interjecting himself in the negotiations last week - "suspending'' his campaign for a day to attend a bipartisan summit at the White House that ended in disarray - said leaders deserve all the credit for negotiating this deal and he isn't claiming any.

"Frankly, I think that people up on the Hill deserve great credit that conducted these negotiations,'' McCain said this morning on This Week (see more on Obama's Face the Nation appearance here when it is finished this morning). "We saw both a bipartisan and bicameral approach to this that is welcome....

"The real effect of this is going to be restoring some confidence,'' he said. "What a lot of us are hopeful (about) is that this will restore some confidence throughout the economy...''

Addressing Democratic rival Barack Obama's call for further economic stimulus to accompany this plan, McCain said: "We've got a lot of other difficulties, including the continuing decline in home values... But let's look at this particular proposal, let's get it through the Congress... and then let's sit down and see what else needs to be done, before we start saying let's do this, this, this...

McCain defended his role in the negotiations.

"I won't claim a bit of credit,'' he said.

by Mark Silva

The federal bailout for banks and other financial institutions that congressional leaders have approved in a late-night deal will parcel as much as $700 billion to purchase bad mortgage-related debt.

But the federal rescue will flow in waves, with Treasury Secretary Henry Paulson authorized to spend the first $350 billion, with further congressional approval required for the second $350 billion. And a bipartisan oversight board will be created to oversee the bailout, also subject to review by government auditors and inspectors general.

There also is a provision requiring financial institutions to repay the government if the Treasury ultimately loses money on the mortgage-related assets that it purchases for them and then resells when the market improves.

House Republicans also have won a federal insurance plan as part of the deal, enabling financial institutions to purchase insurance for troubled assets - at their cost.

And both Democrats and Republicans have agreed to limits on the pay of financial executives involved in the transaction, with a ban on so-called "golden parachutes'' and limits on the tax breaks that the highest-paid executives get.

But Republicans say they have blocked a provision that Senate Majority Whip Dick Durbin and other Democrats were seeking, enabling bankruptcy judges to readjust the terms of mortgages under the control of their courts.

House Republicans say Paulson will get the first $250 billion and then must submit a progress report before spending the next $100 billion. And then the second installment of $350 billion will depend on subsequent approval - while critics of the plan complain that the burden will be Congress to block that installment with a veto-override level two-thirds vote.

House Speaker Nancy Pelosi's office says the plan will "reinvest in the troubled financial markets ... to stabilize our economy and insulate Main Street from Wall Street, reimburse the taxpayer through ownership of shares and appreciation in the value of purchased assets, reform business-as-usual on Wall Street, strong congressional oversight and no golden parachutes.''

By Andrew Zajac

Democrats in Ohio, already rolling a stone uphill in trying to deliver the Buckeye state for Barack Obama, aren't helping the cause with a series of self-inflicted wounds.

The latest is installing term-limited House Minority Leader Joyce Beatty in a ginned-up $320,000 per year job at Ohio State University. That's roughly quadruple her legislative salary and is more than several Ohio university presidents earn.

by Mark Silva

If you were wondering where Sarah Palin got that accent, wonder no more.

The CBS News interview with the parents of Sarah Palin, coming Monday morning on The Early Show, traces the Republican vice presidential nominee's lingual roots straight to her dad, Chuck Heath.

Asked if the Alaska governor has been getting a fair shake from the national media since Republican presidential nominee John McCain tapped her for his running mate, the governor's father is somewhat predctable:

"That's what I feel. Someone said, 'Well they have to get to know Sarah Palin,' but Sarah Palin -- there is a good side of Sarah Palin and they're digging and digging for the bad side and there is no real bad side. They're fabricating a lot of things that I don't want to go into."

Asked by Early's Harry Smith if Heath's daughter is ready to serve as vice president, good old dad says: "She is ready to do anything she wants to. She perseveres, she works so hard, she learns so fast - yeah, I don't worry about that at all."

The interesting part of the brief excerpts which CBS News' The Early Show has made available in the interest of, well, you know, promotion, is that mom says nothing in these clips.

We'll have to tune in Monday to see Palin's mother's words. Ayep.

by James Oliphant

FREDERICKSBURG, Va.--The question has always been whether Barack Obama can take the heat. But can he stand the rain?

Obama is delivering a speech here this evening outdoors on the campus of Mary Washington University and a drizzle is turning into a steady autumn rain.

"I'm going to take off my jacket," he says. "I need a hat."

His running mate, Joe Biden, is standing beside him, playing the loyal soldier, even as the rain falls.

It's been raining off and on here, and much of the crowd, estimated at close to 26,000, was soaked before Obama got here.

He even works the rain into his speech, saying his opponent, John McCain's economic philosophy was like the weather.

Trickle down. Get it?

Later in the speech, though, he switches suddenly into preacher mode.

"Sometimes the skies grow cloudy, and it's dark," he shouts, "and you think the rains will never pass."

The scene, is well, biblical. The oratory more for a pulpit than a podium. And the crowd eats it up.

by Mark Silva

With help like this...

The reviews on John McCain's impact on the congressional bailout negotiations were rather mixed - with fellow Republicans insisting that he had helped, and Democrats complaining that he had helped run the talks into the ditch with his campaign-suspending day of intervention in Washington on Thursday.

So, whichever it was, it will be telling to see how far negotiators get today.

Huddled in the Capitol, the Democrats and Senate Republicans agreed today that they were making good progress, while the House Republicans complained that leaders are railroading a rip-off of the American taxpayer - and the GOP's John Boehner fired off an incendiary press release accusing the Democrats of Chrismas Treeing the bailout bill with favors for allies of the Democratic nominee, Barack Obama.

And who was calling in to the offices today?

McCain, the Republican presidential nominee, and also Obama, the Democratic nominee - who had called Senate Majority Leader Harry Reid (D-Nev.), Secretary Treasury Henry Paulson, House Financial Services Chairman Barney Frank and others..

The McCain campaign said today that the senior senator from Arizona had called President Bush, Paulson and Federal Reserve Chairman Ben Bernanke.

Also: Fellow senators Judd Gregg of New Hampshire and Jon Kyl of Arzona.

But in particular: Those recalcitrant House Republicans who say they aren't buying Paulson's bailout of the banks: House Minority Leader Boehner of Ohio, Minority Whip Roy Blunt of Missouri and Reps. Adam Putnam of Florida, Eric Cantor of Virginia, Mario Diaz-Balart of Florida, Tom Davis of Virginia and several others.

The question is whether McCain called Boehner before, or after his office issued this:

by Mark Silva

While congressional leaders race toward a hard-fought agreement over a $700-billion bailout for the nation's financial markets, resistant House Republicans say they are in no rush to lay the burden "on the backs of American taxpayers.''

Senate Majority Leader Harry Reid today suggested that an agreement is needed by Sunday evening, in time for the opening of the world's stock markets. Senate Minority Leader Mitch McConnell suggested that they might vote on it Monday - "time is not our ally,'' the Kentucky Republican said today.

"The goal is to come up with a final agreement by tomorrow," said Reid, D-Nev. "We may not be able to do that, but we're trying very hard."

Reid's goal of a federal bailout agreement by 6 pm EDT on Sunday, before the opening of Asian stock markets, echoes what other congressional leaders have voiced about the need to send "a message'' to nervous investors that the U.S. plans to act.

"Everybody is waiting for this thing to tip a little bit too far," Reid said. "We may not have another day."

President Bush, acknowledging that Americans are "frustrated'' about the bailout that his administration is seeking, made a renewed public pitch for it today with his radio address.

"I know many of you listening this morning are frustrated with the situation,'' Bush said. " When the government asks you to pay for mistakes on Wall Street, it does not seem fair ... The rescue effort we're negotiating is not aimed at Wall Street -- it is aimed at your street. And there is now widespread agreement on the major principles. ''

The Bush administration maintains that allowing Treasury Secretary Henry Paulson to purchase as much as $700 billion in bad mortgage-related assets from banks and other financial institutions, "greasing'' the wheels of a financial market at risk of "grinding to a halt,'' will avert a freeze in mortgages, car loans, student loans and other lending and the "financial panic'' that could follow

Senate Republicans joined the Democrats in suggesting that they are making progress in their closed-door negotiations, citing agreements on the need for oversight of the bailout, limits on the pay that financial executives can make in the transactions and possibly parceling the purchase money out in two installments.

"We will stay until we've done something that addresses this issue in a very comprehensive and effective way,'' said Sen. Judd Gregg (R-N.H.), lead negotiator for the Senate Republicans.

by James Oliphant

GREENSBORO, N.C.--Well, somebody thinks Barack Obama showed his commander-in-chief bona fides at last night's presidential debate.

But if that person is Joe Biden, does it still count?

"This was supposed to be John McCain's turf and Barck Obama owned it last night," Biden told the crowd gathered here Saturday afternoon.

Biden, introducing Obama, to the rally was in full attack-dog mode, hammering McCain in foreign policy and economic issues. He repeatedly yelled "John McCain was wrong" on a host of foreign and domestic matters, perhaps to account for Obama suggesting that McCain was "right" on several foreign policy issues at the debate.

The bottom line, Biden said, is judgment.

"At this moment in our history we need more than a brave solider," Biden said. "We need a wise leader."

by Mark Silva

Barack Obama apparently likes his debate performance enough to be putting some of it up on the air himself - OK, snippets from a 90-minute face-off, sort of like the snippets of Joe Biden that John McCain's campaign is playing against Obama in its own new ad.

How many times did John McCain mention the middle class in those 90 minutes? Zero, says the typescript of a new TV ad that Obama's campaign rolled out today.

"Number of minutes in debate: 90,'' says the announcer. "Number of times John McCain mentioned the middle class: Zero.''

"McCain doesn't get it. Barack Obama does,'' says the narrator of a spot featuring a few of Obama's remarks: "The fundamentals of the economy have to be measured by whether or not the middle class is getting a fair shake... And when you look at your tax policies, you are neglecting people who are really struggling right now. I think that is a continuation of the last eight years, and we can't afford another four.''

For his part, McCain says the nation can't afford Obama.

" In the midst of war, Senator Obama voted to cut off funding for our troops,;'' says the announcer of McCain's new campaign ad today, quoting Joe Biden out of any context at all with the remarks: ""They said they voted against the money to make a political point''. And ""This is cutting off support that will save the lives of thousands of American troops."

"Barack Obama, playing politics, risking lives,'' the McCain campaign ad announcer says. "Not ready to lead.''

This is the distillation of the real debate, on the air, with 38 days to go: With Obama warning that McCain represents four or eight more years of "the same,'' and McCain arguing, as he has for some time now, that Obama is "not ready to lead.''

by Mark Silva

Without a significant gaffe from either debater and with an absence of "memorable lines,'' the debate between Barack Obama and John McCain "did not alter a political landscape that has grown more favorable to Barack Obama this month.''

In that light, says Darrell West, the new director of the Governance Studies at the Brookings Institution, "Obama won the debate.''

West, who recently left Brown University as a professor of political science to take up the study of politics in the capital of politics, writes this morning that the Democrat fared better on economic matters last night, McCain on foreign policy.

"Obama conveyed the better economic vision,'' West writes. "The Illinois senator was able to cross the threshold that every young challenger must meet. He was up to the job of commander in chief and could step in and be president on Day one...

"Despite a dramatic suspension of his campaign, a flight back to Washington, D.C., and a contentious meeting with President George Bush and congressional leaders, McCain whispered a weak "I hope so" when asked if he supported the general bailout principles that his opponent had enumerated....

"When the terrain shifted back to the evening's stated agenda of foreign policy, however, the GOP nominee delivered a more effective presentation. On topics from Iraq and Afghanistan to Iran, North Korea, and Russia, McCain was quite articulate at outlining his differences with Obama...

"Obama was overly timid in outlining his foreign policy views,'' West writes. And for the professor's full take on the debate, see the Brookings report here in the Swamp:.

by Jim Tankersley and Christi Parsons

Barack Obama talked about how "we've got to walk the walk and not just talk the talk" when it comes to energy independence.

John McCain said "no one can be opposed to alternate energy."

But in the first debate of the fall campaign, neither candidate for president offered much of a case for achieving it.

It was the pattern for the night's exchange, in which McCain and Obama offered soaring rhetoric on some of the nation's biggest worries but, in most cases, failed to offer tenable solutions.

They started out ambitiously enough, talking about the current crisis on Wall Street. Obama even promised a discussion of "underlying issues" threatening American wages and income.

Then they went straight to the political points.

by Mark Silva

The debate goes on about who won the debate, but the answers are starting to roll in about who was watching John McCain debate Barack Obama last night: One third of all households in the nation's top TV-viewing markets.

In some places, interest was more intense: Missouri is a critical state in this election, and more than half the TVs in St. Louis were tuned in: 52 percent.

Oddly enough, in a contest in which the Republican nominee hails from Phoenix, Arizona, the Phoenix market registered the lowest household rating in the big markets: 24.8 percent.

Among 55 of the nation's 56 top markets, debate viewership ran at 33 percent of all households. (Houston's could not be measured because of the impact of Hurricane Ike.)

Considering that the 90-minute debate was carried by ABC, CBS, NBC, FOX, PBS, CNN, Telemundo, TeleFutura, and BBCA, it seems that other 66 percent of households in the big TV markets had to go out of their ways to find something else.

For more on the top debate-watching markets (Memphis, Baltimore and more) see the initial Nielsen report. The full national TV rating will be available on Monday.

by Frank James

My first impression of last night's' first presidential debate, even during the event, was that Sen. John McCain had won it.

After the debate, I still held that view despite hearing analysts on the cable news shows declare otherwise. I wondered if they and I had watched the same debate.

And this morning, after a few hours of sleep interrupted by a lightning storm that passed over the nation's capital in the wee hours I still believe McCain won.

Whether that matters in the end is unknowable at this point. But if you look at what each man had to accomplish, McCain accomplished more of what he needed to in the debate than Obama did, and by that measure he won.

From much of what I've seen on the blogs, the determination about who won has everything to do with whether which team you're on, Republican red or Democratic blue.

Dan Balz of the Washington Post saw it as more of a draw than I did but he makes the same point that many people are seeing it's outcome through red and blue lenses:

Each rose to the challenge here Friday night, forcefully scoring points on one another, sparkling at times, but neither emerged as the obvious winner except perhaps to their partisans. There were good exchanges but few big moments of the kind that can change a presidential race.

But I think David Yepsen of the Des Moines Register has a better view, if only because his agrees with mine:

It was one of the most substantive debates in recent presidential campaign history, and John McCain won it.

He repeatedly put Barack Obama on the defensive throughout the 90-minute session. Obama did little to assure voters that he is experienced enough to handle foreign and defense policy. That was his No. 1 task Friday night, and he failed.

McCain had to get through unscathed the first part of the debate, which everyone knew was going to deal with the economy, not his strong suit.

by James Oliphant

CNN is reporting that poll it conducted after Friday night's debate indicates that Barack Obama came out as the winner over John McCain, but on points. No knockout recorded.

It should be noted that the poll is slightly blue-tinged because more Democrats than Republicans were surveyed.

From CNN:

The CNN/Opinion Research Corp. survey is not a measurement of the views of all Americans, since only people who watched the debate were questioned and the audience included more Democrats than Republicans.

Fifty-one percent of those polled thought Obama did the better job in Friday night's debate, while 38 percent said John McCain did better.

Men were nearly evenly split between the two candidates, with 46 percent giving the win to McCain and 43 percent to Obama. But women voters tended to give Obama higher marks, with 59 percent calling him the night's winner, while just 31 percent said McCain won.

"It can be reasonably concluded, especially after accounting for the slight Democratic bias in the survey, that we witnessed a tie in Mississippi tonight," CNN Senior Political Researcher Alan Silverleib said. "But given the direction of the campaign over the last couple of weeks, a tie translates to a win for Obama."

McCain apparently failed to get the "game changer" he needed to reverse his deficit in the polls, Silverleib said.

Read about the poll here.

by Mark Silva

In the midst of a tumultuous week on Wall Street and in Washington, Sarah Palin's interview with CBS news anchor Katie Couric may have passed unnoticed by many. The governor of Alaska may be able to see Russia from where she lives, but her interview flew under the radar of a week consumed with bailouts and debating a debate.

It's worth sitting back and listening to what Palin, vice presidential nominee of the Republican Party, had to say about the $700-billion bailout that the Bush administration is pushing through Congress.

Palin feels "ill about the position that America is in and that we have to look at a $700 billion bailout. At the same time, we know that inaction is not an option.''

Is there danger of another Great Depression if it is not enacted?

"Unfortunately, that is the road that America may find itself on,'' Palin told Couric. "There has got to be action taken, bipartisan effort.

"We are getting into crisis mode here. If we don't shore up the economy,'' said Palin, asked what the alternative might be if the bailout is not enacted.

"Inaction is not an option,' she said. "This is a crisis moment for America, and really the rest of the world also looking to see what the impact will be if America were to choose not to shore up what has happened on Wall Street because of the ultimate adverse effects on Main Street and how that affects this globalization that we're a part of in our world.

"I, like every American I'm speaking with, we're ill about this position we've been put in... but ultimately what the bailout does is help those who are concerned about the health care reform that is needed to help shore up our economy-- it's got to be all about job creation too, shoring up our economy and putting it back on the right track.''

After all the debate over the premiere debate that Republican presidential nominee John McCain and Democratic rival Barack Obama had last night, it's Palin's turn now to prepare for the vice presidential debate with Democratic running mate Joe Biden on Thursday. Palin has several days to work on that bailout explanation.

by James Oliphant

GREENSBORO, NC--No problem finding the Barack Obama campaign event here Saturday.

By 11 a.m. a line snaked down Elm Street downtown, stretching as far as eight to 10 blocks, heading toward a restored train depot.

Obama and his running mate, Joe Biden, are campaigning here in a bid to put this Republican bastion in play. That the election is a little more than a month off and the ticket is investing its precious time and resources here is a testament to the campaign's belief that that is possible.

Earlier Saturday, campaign manager David Plouffe, in a conference call with reporters, championed Obama's performance in the Oxford debate, saying that Obama beat McCain on McCain's "home field" --national security.

To that end, Plouffe pointed to a CBS News poll taken after the debate that showed a 16-point gain in uncommitted voters on the question of whether Obama is "prepared to be president."

"We think we moved the ball down the field in a very major way," Plouffe said.

Plouffe also hammered McCain for ignoring the middle-class in the debate and said that the CBS poll showed a 21-point gain for Obama among undecideds on the question of whether Obama "understands their needs and problems."

Of course, Plouffe said all this all while downplaying the effect any single debate can have for undecided voters or in the battleground states.

Later in the day, Obama and Biden will move on to a rally in Virginia, another state the campaign hopes to capture. That state hasn't voted for a Democratic president since Lyndon Johnson.

by Mark Silva

He has gone on national television, he has delivered statements from the White House -- one while seated between the Republican and Democratic nominees for the presidency in the West Wing this week -- and now President Bush is on the radio selling a $700-billion bailout for banks and other financial institutions which he insisted this week is necessary to avert "financial panic'' and a "long and painful recession.''

As congressional leaders negotiate into the weekend on a plan that they hope to produce before the markets open Monday, the president insists that this rescue is not about Wall Street, but rather about Main Street. All the toxic mortgage debt "clogging'' banks and preventing them from lending money could lead to a credit freeze at every level, the administration warns: Home loans, car loans, student loans and credit cards.

"I know many of you listening this morning are frustrated with the situation,'' the president said on the radio today. "You make sacrifices every day to meet your mortgage payments and keep up with your bills. When the government asks you to pay for mistakes on Wall Street, it does not seem fair. And I understand that.

"And if it were possible to let every irresponsible firm on Wall Street fail without affecting you and your family, I would do it. But that is not possible. The failure of the financial system would mean financial hardship for many of you.

"The rescue effort we're negotiating is not aimed at Wall Street -- it is aimed at your street.,'' the president said. "And there is now widespread agreement on the major principles. We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets. We must ensure that taxpayers are protected, that failed executives do not receive a windfall from your tax dollars, and that there is a bipartisan board to oversee these efforts. ''

That agreement, however, is largely among members of the Democratic leadership of the Congress and the Bush administration. And Democrats are calling on Bush's own party -- the House Republicans in particular -- to get in line with an agreement that can be presented as bipartisan. They're going to need a lot of votes to pass this one and then explain why they have committed the federal government to such a bailout..

by Jill Zuckman

Oxford, Miss. - After wrapping up his first debate against Barack Obama, John McCain, his wife Cindy and daughter Meghan stopped by a raucous debate party at the Lyric, a bar and club in Oxford Square.

Huge cheers went up when the party arrived and took the stage. Cindy McCain introduced her husband, who was clearly more than satisfied with his performance.

"Well, my friends, do you think we showed them who's qualified to be
commander in chief?'' McCain said, grinning broadly, to more loud cheers.

"I'm overwhelmed by your enthusiasm and support and
I want to say that I thank you all for being here. I want to tell you
that I will not let you down," he said.

"So my friends, I want you to -- we've only got 39 days, who's counting? And
in those 39 days I'd love it if you would spend a little time making
sure we get out our vote," McCain told the crowd. "As you may know, my family's roots go back to the state of Mississippi...And I was
once stationed at the Naval Air Station in Meridian. And I just want
to say to you I hope I didn't -- I hope I made you proud tonight."

More cheers went up as McCain said, "I'm grateful for your friendship, I'm grateful for your support and I can't think of a better place to be than Oxford, Mississippi.''

by Mark Silva and updated at 11 pm

It's entirely possible that we may have seen a draw tonight, in the first of the presidential election debates of the season.

John McCain started tonight with a skaky voice on economic issues, in the midst of a congressional debate over an extraordinary debate over government intervention in an economic crisis. His voice grew stronger, however, as the debate moved to national security, the Republican nominee's calling card.

Democrat Barack Obama found a consistently strong voice in both the economic and national security debates, though it grew more contentious as they waded into foreign affairs. He also managed to get beyond his notoriously wordy approach to serious questions and directly confront most of the challenges tonight.

There were no body blows tonight, no fatal one-liners, no fatal flubs. There was the occasional mispronunciation of an unpronounceable name - Ahmadinejad. There was an occasional subliminal reference to the age of the older candidate, by the candidate himself. But there was no clear attempt by one or the other to exploit a fatal weakness.

There are two more debates left in this series.

One of them could prove more important than tonight's.

* * * *

The closing "leading question'' tonight: What do they think of another attack on the United States like the one of Sept. 11, 2001?

"I think it's much less than it was the day after 9/11,'' said John McCain, the Republican nominee for president. "We have a long way to go in our intelligence services... I can tell you, America is safer than it was on 9/11.''

"We are safer in some ways,'' said Democratic nominee Barack Obama. "But we still have a long way to go... The biggest threat we face now is not a missile coming across in our skies, it's in a suitcase...''

* * * *

John McCain tonight attempted to portray rival Barack Obama as "naïve'' in matters of foreign affairs.

Unlike President Bush, who looked into former Russian President and now Prime Minister Vladimir Putin's eyes and saw his "soul,'' McCain said tonight, he saw something else.

"I looked into Mr. Putin's eyes, and I saw three letters, a K, a G and a B,'' said McCain, mouthing an oft-used campaign line.

"I think Americans will judge... very seriously, who should be the next president of the United States,'' McCain said tonight. "I've been involved... in virtually every national security challenge we have faced in the last 20 years...

"I honestly believe that Sen. Obama doesn't have the knowledge and experience,'' said McCain, suggesting that Obama's "failure to acknowledge'' the "success'' of the surge of U.S. forces in Iraq is all-telling. "I have the ability and background and judgments to make this country secure.

"I don't think I need any on-the-job training,'' said McCain. "I am ready now.''

Obama responded that the ideals and values of the United States have "inspired the entire world... Part of what we need to do, what the next president needs to do.... Is to send a message to the world, that we are going to invest in education, we need to invest in the issues'' that are important to the world.

McCain closed tonight's debate with a reminder that he was a prisoner of war in Vietnam. "I know how to heal the wounds of war. I know how to deal with our adversaries.''

* * * *

On the question of the threat that terrorists in Afghanistan pose and the relative threat in Iraq, Barack Obama told John McCain tonight: "You don't muddle through the central front on terrorism... You don't muddle through going after bin Laden.''

"Sen. Obama doesn't seem to understand, there is a connection between the two,'' McCain replied.

* * * *

Republican John McCain, supporter of President Bush's war straegy in Iraq now, has said he would rather "lose an election than lose a war.''

Tonight, on the war in Iraq:

"Sen. McCain is absolutely right that the violence has been reduced'' in Iraq, because of the "brilliant performance'' of U.S. troops, Barack Obama told his rival . "John, you like to pretend that the war began in 2007... You were wrong,'' Obama said with the most forceful personal attack so far this evening, suggesting that any success attached to the :surge of U.S, forces overlooks a misguided war.

"I'm afraid Sen. Obama doesn't understand the difference between the tactic and the strategy,'' McCain said. "Sen. Obama refuses to acknowledge that we are winning in Iraq.''

"That's not true,'' Obama said. "That's not true.''

Obama asked, "The question is, was this wise?'
'
"Sen. McCain, in the rush to go into Iraq, said, you know what, we've been successful in Afghanistan,'' Obama said. "What I've said is, we should end this (Iraq) war responsibly. We should do it in phases... and, bolster our forces in Afghanistan. ''

* * * *

As they got deep into their debate over spending tonight, Barack Obama faced John McCain and said that all the runaway spending which he now criticizes is something that the Bush administration has supported - and McCain has supported Bush "90 percent'' of the time.

"It's well known that I have not been elected Miss Congeniality in the United States Senate,'' said McCain, deploying the same prepared and oft-used campaign trail line that he had used earlier in tonight's debate. He is, he said, the "maverick.''

* * * *

"It's hard to reach from that part of the aisle from so far to the left,'' John McCain said tonight, delivering a clearly prepared line tonight, which rival Barack Obama dismissed with a polite laugh

. The audience, silent.

The audience, silent.

"Tom,'' said Obama, quickly correcting himself , quickly yet awkwardly,. "John mentioned me being wildly liberal.... Mostly that's me just opposing George Bush's polices.''

These lines were not working very well in either direction, it seemed, one third of the way into the night's debate.

* * * *

"I've got a pen... this one's kind of old,'' said McCain, wagging a veto-like felt pen in the air and using a term about attacking runaway spending that doesn't really work in his favor. "I'm going to veto every spending bill that comes across my desk.''

McCain is proposing $300 billion of tax cuts for some of the biggest corporations in America, Obama said. "My attitude is, we've got to grow the economy.''

McCain suggested that Obama suspended his request for "earmark'' spending, money for special spending back home, only after he was in office for a while and looking for higher office.

"I didn't win Miss Congeniality in the United States Senate,'' said McCain. "I want to cut spending. I want to keep taxes low.''

Obama, whose voice was deep and firm in an encounter with McCain, his voice occasionally shaky, called McCain's proposals "a continuation of the last eight years... and we can't afford another four.''

* * * *

Before the debate this evening, Democrat Obama left his motorcade for a short walk into the performing arts center at the University of Mississippi where tonight's debate is playing out. He held hands with his wife Michelle.

Supporters in a small crowd nearby shouted, "We love you.''

"Thanks for having us,'' the nominee replied.

Obama was trailed by a large entourage that included senior strategist, David Axelrod., who will join others in the official campaign "spin room'' post-debate this evening.

* * * *

At one point early on tonight, the moderator asked Obama to direct his response direclty to McCain. "Are you afraid I can't hear him? asked McCain, with a joke that could get to the heart of a question a lot of voters are asking about the man who stands to become the oldest candidate ever elected to a first term as president.

* * * *

The first "leading question" from the narrator: ''Gentlemen, at this moment tonight, where do you stand on the financial recovery plan?''

"We are at a defining moment in our history. Our nation is involved in two foreign wars, and we are going through the worst financial crisis since the Depression,'' Obama said.

"We have to move swiftly, and we have to move wisely,'' the Democrat said gazing directly into the television camera.

"No. 1, we have to act wisely.. .. $700 billion is potentially a lot of money,'' said Obama, marching through his prepared talking points in as concise a manner as this candidate often wont to some rambling can do. He was direct, on point.

"That's why I'm running for president,'' he said.

John McCain, the Republican nominee, opened with "a sad note'' about "the lion of the Senate,'' Sen. Ted Kennedy, the Democrat from Massachusetts battling brain cancer and hospitalized today - Kennedy, whom McCain has joined in immigration reform and other bipartisan initiatives.

"I've been around a little while,'' said McCain, whose eyes were fixed on the moderator, not the home viewing audience.

"I went back to Washington,'' McCain said of the negotiations over the financial market bailout. "This isn't the beginning of end of this crisis. This is the end of the beginning... We've got a lot of work to do.''

But that left moderator Lehrer asking: Let's go back to my question here, folks, what do you think of the rescue plan?

Are they going to vote for the $700 billion bailout of the financial markets that the Bush admiistration is pushing through Congress?

"I'm optimistic about the ability of us to come up with a plan,'' Obama said.

"I hope so,'' said McCain, on the quetion of voting for the plan.

"We need more responsibility, but we need it not just when there's a crisis,'' Obama said.

* * * *

Welcome to your own personal spin room, the place where we'll attempt to sort out who scored what in tonight's debate, the first of the presidential debates of 2008.

We'll be live-blogging here when the debate starts.

Anyone who cares to warm up the board with some pre-debate spin is welcome, anyone who wants to weigh in -- in medias res -- is welcome too, and then of course, the clean-up crew will be working overtime.

* * * *

Tonight they debate. The judgments begin.

For Barack Obama and John McCain, engaged in a close, hard-fought and at times intensely personal contest for the White House, the first of the nationally televised presidential camapign debates tonight in Mississippi is a chance to plant in the minds of viewing voters one lasting image or thought that will help carry one to victory in 39 days. It is a chance to start closing a deal with voters that neither has nailed down yet.

It's not only their words, but also their carriage that may leave the most important lasting impression in the minds of those who watch tonight at 9 pm EDT - and those who will be subjected to the endless rotation of the hottest clips from this debate in a weekend of cable news recycling.

It is a chance not only to appear presidential, to present as a commander-in-chief in-waiting, but also to turn a few memorable phrases. Of course, a second debate will follow soon, and a third, before the election plays out on Nov. 4.

The runup to the debate - McCain's abruptly "suspended'' campaign in the midst of the congressional debate over a $700-billion financial-market bailout, with McCain at first calling for a delay in the debate and then finally agreeing today to carry on with it, campaign suspension finished - sets a shaky stage tonight. Obama will attempt to play the steady hand at the tiller, while McCain attempts to regain his grip on a contest in which polls show that Obama has gained something of a lead nationally.

It is the first debate, tonight, which will set the tone for all of their remaining engagements. He who stumbles on the stage at the University of Mississippi at Oxford tonight will spend the next two debates catching up. He who conquers will defend the castle again, on Oct. 7 at Belmont University in Nashville, and on Oct. 15 at Hofstra University in Hempstead, N.Y.

The moderator, anchor Jim Lehrer of the Public Broadcasting service, will want to steer the discussion tonight toward foreign policy, which is said to be the strong suit of the Republican nominee, a third-generation graduate of the U.S. Naval Academy and son and grandson of admirals, a retired Navy captain who spent five and half years as a prisoner of war in Hanoi, and, in his second career of public service, a member of Congress for the better part of 26 years who has traveled the world.

Yet the debaters are certain to seize whatever opportunity they find to steer the debate toward the economic crisis at hand in America, arguablly connected to the slated theme of the debate by the place that America's economy plays in a fast-changing world economy. And this is said to be the strong suit of the Democratic nominee, a Harvard-trained lawyer who has spent less than four years in the Senate but draws the support of more Americans, according to the polls, in his fitness for handling the economy.