1. Do you really think you're going to get a lot of GOP cover for your bailout plan, unless it's something that doesn't do anything to directly help anyone not on Wall Street?
2. You realize how the American public feels about this bailout, right?
3. You know you're going to Be Serious and pass a bailout plan that Bush won't veto, right?
4. And when you do, you know that the GOP will run against both you and Bush at the same time, right?
5. So why don't you stop worrying about getting Bush's support, or about getting GOP votes, and put together the best, most populist bailout package you can possibly come up with - one that may not get any GOP support, but one that you're not afraid to sell to the American people?
Then, one of two things will happen:
A) It'll pass, and you'll have saved the day and helped the American people in all sorts of good ways. This isn't a very likely outcome, but you'll have tried - on your terms.
B) The GOP will have proven to the American public that denying any relief to the people is more important than saving our economic system. Which is the absolute truth, of course. Then you can run against the GOP for Not Being Serious about the bailout, and hating the American people, too. Politically, it just doesn't get any better than that.
So, what would such a bailout look like?
- Mandate the restructuring of mortgages in all cases where banks loaned people more than they could have reasonably been expected to pay. (IMHO, this is all the bailout that is needed: this puts real value back in all those questionable mortgage-backed securities, which is the key to unlocking everything else.)
- Include the outline of a new regulatory regime to cover anything remotely bank-like.
- Repeal as much of the Bankruptcy Act of 2005 as you can get that K-Street pawn, Steny Hoyer, to go along with.
- Include the 'second stimulus' package of extended unemployment benefits and so forth, targeting people who will spend the money because they have little choice.
- Include the SCHIP expansion that the GOP defeated last year. Repeal Bush's 2003 tax cut on dividends and capital gains to pay for it.
- To the extent that the bailout still involves paying more for questionable securities than any private investors are willing to do, also do the following:
- Increase income and estate tax rates on the rich and super-rich to pay for the bailout.
- Demand transparency of any firm that Uncle Sam overpays for assets from: if you aren't in enough trouble to open your books in order to be rescued, then you aren't in enough trouble to be rescued.
- Do all the other things that are in the Dem bailout package already: an equity stake, limits on CEO compensation, and all that.