A few minutes ago Federal Deposit Insurance Commission Chair Sheila Bair told reporters that she would request a temporary increase in deposit insurance to $250,000. A top Senate Republican staffer just confirmed that Treasury will send up legislative language soon. Earlier today John McCain and Barack Obama endorsed the idea. In my opinion, this ensures that the House will reconsider and pass H.R.3997, the "Emergency Economic Stabilization Act of 2008," Thursday afternoon with this modification.
Members of Congress who voted against the bill have reacted to yesterday's market downturn with pledges to reconsider their votes. They will vote for exactly the bill the voted against yesterday with the addition of the deposit insurance amendment.
Market and governmental gyrations such as this are rare in the U.S. That's what happens when you try to legislate on such important matters too close to an election.
Several of the readers who commented on Andrew's post from yesterday said that the House didn't pass the Paulson-Frank because supporters had failed, miserably, to communicate the need for the plan to those who needed to be convinced.
I'm a managing director at a public relations firm and a former national director of public affairs at one of the largest global PR agencies, so please believe me when I say that it's hard, or actually impossible, to argue with this.
From a communications perspective, this has been done about as wrong as is possible. There have been no credible spokespeople, the messages about the plan have been wrong or incomplete, the plan's supporters failed to understand the different audiences that had to be reached, and few people validated the claim that the plan was needed.
First, nice work Pete. CG&G readers haven't seen everything Pete's done this week and weekend to stay up-to-date on what's been happening on Paulson-Frank-Dodd (Or is it Paulson-Dodd-Frank?), but I doubt that many other people outside those in the room knew as much as soon as Pete did.
Now, about the plan...
One of the things I've learned over the years is that, while there's nothing wrong with having an opinion about something, there are times that you have to allow those who know, or should know, more than you to make the decision. That's what we call leadership. Even in the blogosphere world of alpha males and females, where everyone purports to be an expert on everything, there are times that you need to let others take the lead.
For me, this is one of those cases. I am willing to bow to Paulson, Dodd, Frank, and Bernanke, etc. because I am assume they know a great deal more than me on this situation. It's not weak to admit that; it's called delegation.
In the next few hours, the negotiators on the financial rescue plan will announce an agreement in detail. Legislative language is being finalized. It's still not clear how many House Republicans will vote for it, but enough will for the House to pass it tomorrow morning. There is not enough time for the Senate to take it up before Rosh Hoshanah, which begins tomorrow at sundown, but Senate passage on Wednesday or Thursday is not in doubt. I expect President Bush to sign it late this week.