Return to Transcripts main page

Ballot Bowl 2008

Dem Leadership Holds Press Conference on Bailout

Aired September 28, 2008 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JESSICA YELLIN, CNN CORRESPONDENT: Today, we are calling "BALLOT BOWL," "Bailout Bowl," because we are also covering the negotiations on the bailout package on Capitol Hill. They are intense and ongoing. And that's where we fine my co-host, Dana Bash.
Dana, you have been up there. And there is still a lot of action going on.

DANA BASH, CNN CORRESPONDENT: Still a lot of action, a lot of hope which is important, but definitely a lot of action. And still, some skepticism. And for the latest on the negotiations and the tentative agreement, I want to bring in my colleague, Brianna Keilar who has been pounding the marble all day into the night, last night.

I don't think even think, Brianna, you ever went home. I think -- we've been reporting on the tentative agreement -- I think the first question, especially as we're looking forward to when the markets open on Monday, when are your sources telling you that this could potentially be voted on?

BRIANNA KEILAR, CNN CORRESPONDENT: Yes. And, Dana, it's not just about U.S. markets, this is something of a global concern. So, the goal we're hearing from various sources is to have a final agreement by the time Asian markets open. I think that's about 6:00 p.m. Eastern today and then there's the final agreement which obviously is different than having a vote on legislation.

What we're hearing from sources is that this would, of course, go the House first and the possibility is that there would be a House vote on Monday morning. Then there are the Jewish holidays. So, it sound like the vote on the Senate side would be on Wednesday. So that's what we're looking at now.

BASH: OK. And let's get to the meat of this. These negotiators, senators, House members the treasury secretary, they were all here until the wee hours of the night last night, working on, you know, exactly what would be in this. Give us the gist of what taxpayers can see with regard to where their money is going to go to bail out Wall Street.

KEILAR: It is a $700 billion plan which is, you know, that is obviously what Secretary Paulson came to Congress with more than a week ago. But the treasury secretary would only get $250 billion up front to basically use at his discretion. So, obviously this is being delivered in parts, as you can tell, this $700 billion.

Also, we understand there is a provision on CEO pay limits. Basically, major limitations on golden parachutes but also how much corporations can deduct when you're talking about how much they pay their CEOs in teams of those hefty annual salaries.

And then, oversight. There is an oversight board. There are going to be four members. The Housing and Urban Development secretary, as well as the chairman of the SEC, as well as the chairman of the Federal Reserve, and the director of the Federal Home and Finance Agency, which is the agency that is currently overseeing Fannie Mae and Freddie Mac.

Also, under certain circumstances, this is a taxpayer protection. I'm about to tell you about is that the treasury secretary would have the discretion to determine exactly whether there should be the government taking ownership stake in companies that are getting a bailout. So, the idea being there, Dana, if these corporations who participate in the bailout eventually profit, the taxpayers as well could take part in those profits.

BASH: And I'm getting emails, I know you are too from House Republicans saying -- whoa, whoa, you know, we think we're on the right track here but the fine print isn't even there -- some brackets, some kind of question marks or blanks still in this tentative agreement that was posted online. They're going to meet in about 15 minutes.

Just quickly, what are you hearing from them and from others about where they actually stand, the various factions, who really need to come together for the most part to make this actually happen?

KEILAR: That's been the storyline all along, right? We've been hearing some cheerleading from the Senate side, from Republicans and Democrats there, but House Republicans sort of putting on the brakes and minimizing expectations and saying not so fast. So, Senate Republicans and Democrats, we understand, they are probably onboard with this, but, again, watching House Republicans -- we heard Congressman Eric Cantor say the devil is in the details.

So, at this point, yes, as you spoke, the caucuses are getting together. Basically, these key negotiators have been selling this and continue to sell this plan to their rank-and-file members. So, they're going through that process right now trying to get everybody on board. And that's why we're saying its not a done deal. Not necessarily everyone is onboard, especially those House Republicans who were saying, we really need to go over this with a fine-tooth comb.

And the bottom line, Dana, is, there are some House Republicans who are just never going to go for this plan -- the idea of taxpayer dollars going to bail out Wall Street, going to bail out the financial markets, they're never going to be onboard with this.

BASH: Absolutely. There is a huge philosophical divide over just the concept of going ahead and using taxpayer money, even if it's temporary, to bail out Wall Street and that is the problem that a lot of these fiscal conservatives have in the House.

KEILAR: Definitely.

BASH: Brianna, thank you very much.

Brianna mentioned the fact that the House Republicans, and really everybody, they are saying -- wait a minute, let's go through this with a fine tooth comb and read the details. That's exactly what I'm hearing from the McCain campaign. John McCain has not really weighed in on this, or more specifically, not taken a position on this tentative agreement yet. I talked to one of his top advisors who said that they are going through it; they are going to wait and see, wait for those blanks to be filled in.

And Barack Obama is a little bit more positive. He is sort of leaning more into it than John McCain is.

Both of them spoke about this tentative agreement this morning. Take a listen.

(BEGIN VIDEO CLIP, ABC NEWS "THIS WEEK")

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: I did what I thought was the right thing. I saw that they had an agreement that they were working on in the United States Senate. I'm sure it was a good agreement, wasn't as good as the one we have now.

I saw that the House of Representatives was not engaged, the Republicans in the House of Representatives were not engaged in the negotiations. I understand that. They are the most fiscally conservative people. And so I came back and it wasn't because of me that the Republicans in the House of Representatives got into the negotiating and bargaining, which was vital -- had to be bipartisan and bicameral -- but they did it themselves.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP, CBS NEWS "FACE THE NATION")

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: We have to remember how we got here, not so much to allocate blame as to understand the choices that are going to face the next president. Unless we update our 20th century regulatory framework for a 21st century global financial system, then we are going to continue to be vulnerable to this kind of situation.

(END VIDEO CLIP)

BASH: That is Barack Obama and John McCain speaking out this morning on the tentative agreement.

And Jessica, you heard John McCain defending his actions in coming back here and suspending his campaign for about 24 hours, something that has been incredibly controversial and certainly added to the drama of this past week.

With regard to the politics of it, you know, he's been criticized by Democrats, they've been saying, you know, he actually hindered the process, he didn't help the process. You heard him there saying, well, you know, I went and I met with House Republicans, I heard their concerns and I was basically a voice for them in order to get their seat at the table.

So, it's going to be -- it's for a few days maybe even a couple of weeks until we see the real political ramifications of John McCain's decision to come back here, that for sure.

YELLIN: And as you pointed out, Dana and Brianna, the politics of this inside the House, not on the presidential campaign but inside the House of Representatives and on Capitol Hill, in general, still playing out. But I'm joined now by Ali Velshi who is our guru, explaining to us the actual substance of what's inside the bill, putting politics aside.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes.

YELLIN: Ali, let me ask you about one measure in this that's gotten -- we haven't talked a whole lot about it but it's what the House Republicans are focused on and we're getting emails now that even a group of skeptical House Republicans, the conservatives, would prefer that this entirely be financed by an insurance program.

VELSHI: Right.

YELLIN: Can you explain to us what that means? What's in this bill that would provide for that and why they might prefer that?

VELSHI: Well, it looks like there's a -- what they are asking the secretary of the treasury to do is establish based on the money that they put out to a company to help a company out, an insurance policy basically, a risk-based insurance policy that says, if they loan this x amount of money to a company to bail it out, and that company doesn't recover and that money isn't going to come back is there insurance for the taxpayer that sort of saves that money.

That is a -- it's interesting because there's not a lot of details that I'm seeing on this yet in the draft that we've seen but it is a very complicated thing. I should remind people, if they wonder why AIG nearly failed the other day, it wasn't because of most of the businesses that they do, in fact, most of AIG was very successful. It was the part of AIG's business which insured the mortgage-backed securities which caused that company to spiral into sort of insolvency, so -- or near insolvency.

So, this is a tricky one. You caught on to the right thing here. There are few elements of this proposal which are going to be very tricky. Right now, we've got a very broad-based structure, much of which allows the treasury secretary to do what he has to do with the money on the condition that he reports very effectively and regularly to Congress and it says the treasury secretary has to take these things into consideration.

So, it's sort of a win-win situation for a treasury that wanted the $700 billion (ph), as we call it blank check, several days ago, and Congress has said no way we got a lot of checks and balances. But how they actually execute some of these things, there's a provision there about -- if you loan known a financial institution, putting some pressure on that financial institution to renegotiate mortgages with people who are in trouble.

But again, the detail on how that's done is probably the stuff that's holding us up from a final draft right now. There are thing in here that are very interesting but they're not -- were not finalized on it yet. And we are going to continue to study them and find out how they are going to affect people out there.

YELLIN: Well, Ali, if you are hoping to go home to dinner, I have some bad news for you, which is that we have...

VELSHI: It's not going to happen.

YELLIN: ... what is called the final agreement just been sent to us and you should find it in your inbox as soon as you're off TV. We'll hope you can break it all down for us further.

But before we let you go, one more question. I'm out with Barack Obama today. I heard him talking about how if he should become president he plans to review the entire package and see if adjustments need to be made. Are there provisions, what kind of provisions are there for a new president to alter this package come January?

VELSHI: My reading of this is that it, in fact, would be able to be altered because it's not giving everything up at once. The treasury is going to have to come back to Congress at every stage for every $50 billion of the $700 billion that is used. The treasury has got to report back to Congress on a regular basis. And there's an oversight committee.

So, this is actually not the blank check everybody thought it was, which means that if Congress, if the president has the agreement of Congress in saying we're going in the wrong direction here, he only needs to talk to Congress and the treasury secretary and the Fed chair. It doesn't look like anybody has got a blank check in this particular deal.

So, I think if Barack Obama or John McCain decided as they were sworn in as president, they want to look at this again, it does appear that there's room to do that. Now, the only thing, of course, Jessica, is once you've committed the money in those various tranches (ph) and it's all out there, then you don't really have a lot of options because the money is out there.

And the whole reason this could work is because the U.S. government can actually sit on these investments longer than any public corporation can, on the understanding that they will be worth something in years to come.

So, you can't start tinkering with it once the money is assigned. But until then, there's time to figure how best to spend the 700 billion.

YELLIN: OK, Ali, enjoy that reading. I'm sure we'll check back with you once you have some of the new details. VELSHI: Thanks.

YELLIN: And check back with us. We're going take a quick break. But on the other side of it, we hope to hear from lawmakers on Capitol Hill live. So stay with "BALLOT BOWL."

(COMMERCIAL BREAK)

BASH: Welcome back to "BALLOT BOWL '08." I'm Dana Bash, on Capitol Hill today.

On "BALLOT BOWL," we usually bring you the candidates running for president out on the campaign trail in battleground states, making their stump speeches, we bring that to you live sometimes, sometimes on tape. But we bring you always unfiltered.

Today, we're bringing you some of that but we're also bringing you where the news is and the high drama is in politics and in terms of policy, a critical policy for this country right now, 37 days before the election.

Capitol Hill is where House and Senate members, and members of the administration have been working all weekend long to finalize what they hope an agreement on a $700 billion bailout of Wall Street. They hope to do that and come out with an agreement before the markets open on Monday in the United States, and certainly, on the international stage as well.

You're looking at live pictures right now. We are going to have a press conference in about, scheduled for about five minutes from now from the lead Democrats, the Democratic leaders on Capitol Hill. House Speaker Nancy Pelosi along with the Senate Majority Leader Harry Reid. They are going to come out and talk to reporters about where they think things stand with this tentative agreement that they reached in the wee, wee hours of last night.

And you're also looking at another set of microphone. Those are for House Republicans. They are also, you see some of them walking in right now. They are walking into a meeting where they are going to have a discussion with their leadership about some of the fine print of what was discussed.

The House Republicans, of course, have been the holdout here. Many of them feel that it is just philosophically-wrong for the United States government, for the taxpayers, to be bailing out weekend.

So, a lot of these negotiations have been about figures out how to bring some of them in, at least enough of them, so that this can truly be a bipartisan bill that passes Congress and goes to the president's desk. So, that is the state of play right now in Capitol Hill. There is a lot of action here and we're going to bring you those live events as soon as we have them.

But now, we're going to go back out to the campaign trail as we wait for those press conferences to start. My colleague, Jessica Yellin is out there. And I think, Jessica, you're going to look back a little bit at the debate on Friday night and bring in Bill Schneider about just how Americans view that debate.

YELLIN: I will in just a moment, Dana, but I wanted to take the time now to ask you one of the questions we keep hearing or I keep hearing is, why is it that it's the House Republicans who are opposing this when it was the Republican president and his administration that proposed this bill to begin with? Isn't this a Republican initiative and why are these conservative House members objecting to it?

Now, I've heard to a certain extent that it is exactly what you said, those philosophical differences, but there's some interesting politics playing out here as well. I wonder if you have a sense of some of those politics and your take on this situation.

BASH: Well, I think the politics are that a lot of these members are fiscally-conservative. There's a couple of thing. One of them is that a lot of these members are fiscally-conservative and hearing from their constituents who are, in some instances, in the reddest of red districts and the reddest of red states saying, you know, wait a minute, this is not what we sent you here to do. You can't do this.

The politics, another layer of those politics is, and I think this is might have been what you were alluding to, well (ph), how things have changed. I mean, you and I have covered both the White House and Capitol Hill. And it used to be that House Republicans used to get a directive, frankly, from President Bush and they used to say, "Thank you, sir, we'll carry out your marching orders" -- no longer. If anything right now, it is political suicide, frankly, for many of these people, even in conservative districts, to go along with something that the president of the United States is doing because he's so intensely unpopular.

And I think, you might also be talking about some internal politics inside the House Republican leadership as well, because there's a lot of personality differences, I think, and jockeying is probably the best word inside the House Republican leadership here.

YELLIN: I want (ph) you to know, it isn't simple, when we're talking about Congress, it never is.

Thanks, Dana.

And we're going to check with Bill Schneider, who's on the road in Missouri. He's going to talk to us about those poll numbers Dana mentioned, and how people thought the debate went. That's on the other side of this break. Stay with us.

(COMMERCIAL BREAK)

YELLIN: Welcome back to CNN's "BALLOT BOWL." I'm coming to you from Detroit, Michigan, where Barack Obama held a rally just a short time ago.

But yesterday, he was in Greensboro, North Carolina, the day after his first debate with John McCain. He was on the attack, accusing John McCain of being too focused on Obama, not focused enough on the voters.

Let's listen.

(BEGIN VIDEO CLIP, GREENSBORO, NORTH CAROLINA)

OBAMA: Last night we had a debate. And on issue after issue -- from taxes, to healthcare, to the war in Iraq, you heard John McCain make the case for more of the same -- the same policies that got us into this mess.

But just as important as what we heard from John McCain was what we didn't hear from John McCain. He talked about the economy for 40 minutes and not once did Senator McCain talk about the struggles of middle class families. Not once did he talk about what they are facing every day right here in North Carolina and around the country.

He defended the plan to give $300 billion in tax cuts to corporations and the wealthiest Americans but he had nothing to say about fact that wages have flat lined and jobs are being shipped overseas. He didn't have anything to say about that.

He railed against some study on bears in Montana. That's an old line he's been using, since the beginning of this was campaign. But he has nothing to say about the fact that more and more Americans can't afford to pay for their college education, can't afford healthcare for their families, can't afford a retirement that is dignified and secured.

Senator McCain spoke again and again about the need to keep spending $10 billion in Iraq and he said nothing about the need to end this war, so we can invest in good jobs, and rebuild roads and bridges, and put broadband lines all across rural North Carolina, all across America, so we can be competitive for the future. He didn't talk about that.

The truth is, through 90 minutes of debate, John McCain had a lot to say about me, but he had nothing to say about you.

(CROWD BOOING)

OBAMA: Didn't even say the word middle class, didn't say the word working people.

See, I think, Senator John McCain just doesn't get it. He doesn't get this crisis on Wall Street. He doesn't get the fact that it hit Main Street long ago. That's why his first response to the greatest financial meltdown in a generation was to say that the fundamentals of the economy were strong. That's why he's been shifting solutions this last two weeks, looking for a photo-op, and try to figure out what to say and what to do. He doesn't really know what to do and hasn't been clear what to say.

Well, North Carolina, I know what we need to do. We need to stop giving tax cuts to corporations and CEOs on Wall Street and start standing up for families on Main Street. We need to turn the page on the failed policies of the last eight years, and finally put working people first. And that's why I'm running for president of the United States of America.

(APPLAUSE AND CHEERS)

(END VIDEO CLIP)

YELLIN: Barack Obama speaking yesterday in North Carolina, the day after the first debate.

Now, we're going to turn to Bill Schneider, our poll expert who is near the site of the next debate, he's in Missouri, and we're going to find the vice presidential candidates debating in that state on Thursday.

Bill, first of all, you have some poll numbers looking at how the voters thought or the debate watchers thought the two men did on some of the key issues in their first face-off Friday night.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That's right. Now, these, remember, we interviewed debate viewers, they are not a cross- section of the public because a lot of Democrats, more than the usual number of Democrats watched that debate. Now, one of the big subjects was the financial crisis, Barack Obama talked about the deregulatory policies that had led Wall Street get out of control, and John McCain said that he would...

YELLIN: Bill, we're going to take a break for a moment from the poll. I'm sorry. Nancy Pelosi has just stepped to the mike on Capitol Hill. We're going to break to her and come back to you after this live press conference -- Nancy Pelosi.

SCHNEIDER: OK, very good. We're going to Nancy Pelosi.

REP. NANCY PELOSI, U.S. HOUSE SPEAKER: Acceptable to us. It was a proposal that requested an enormous amount of money, a number that hadn't been suggested to us two days earlier, $700 billion. It talked about unparalleled, unheard of powers for the secretary of the treasury. Where he would have powers free of judicial review or the oversight of any federal agency as well as the ability to fund, to use the revenues that might come in any way that he wished, to name a few -- to name a few of those powers.

Working together in a bipartisan way, we fashioned an alternative. Democrats insisted that if this was so necessary, to bail out Wall Street, that we had to insulate the American people and Main Street from the crisis from Wall Street. We insisted on protecting the taxpayer as we stabilize the markets. That meant having very serious oversight that had been lacking. That meant also having forbearance for the homeowners, so that people who were responsible could stay in their homes with the help of their lender. That now being -- that now be the federal government.

That we have -- and we had two issues that we all agreed, Democrats and Republicans alike, the reform of CEO compensation. The president acknowledged these issues in his speech a few nights ago where he talked about oversight, homeowners, compensation, and equity and other issues to protect the taxpayers, where in addition to infusing cash and buying up this paper from these institutions, the American people could get the upside of those transaction.

We debated for a number of days. We went back-and-forth and negotiated, and then last night, it came down to three issues. How this money would be distributed -- then we thought that it didn't have to go out $700 billion all at once. Golden parachutes and compensation for CEOs -- we had strong resistance from the administration on that subject as well as an insistence that we have that the American taxpayer was not going pay this price. That if this $700 billion investment did not come back whole, that is to say, earn itself back, there was any shortfall, then the financial institutions would pay that price, not the U.S. taxpayer.

Again, working in a bipartisan way, we sent a message to Wall Street -- the party is over. The era of golden parachutes for high flying Wall Street operators is over. No longer will the U.S. taxpayer bail out the recklessness of Wall Street. And that's the news that this legislation brings.

Again, we want to insulate the American taxpayer, Main Street, every day Americans from the crisis on Wall Street. People have to know that this isn't about a bailout of Wall Street, it's a buy-in so that we can turn our economy around and we can help people who are saving for their pensions and retirement, for the education of their children. Save them so that they can stay in their homes. Small businesses can get credit so they can continue their transactions. The list goes on and on, and it comes down to one word, jobs -- jobs. So we can create jobs in our country.

And now I'm very pleased to say that under the leadership of Harry Reid and the United States Senate, it has been a joy to work with him, he really gets impatient about the lack of decision sometimes. And under his leadership, this was brought together last night, expeditiously, so that we could come before you today.

We had two great field marshals in this -- in the House, Barney Frank, chair of the Financial Services Committee and who just, his mastery of the subject matter, the knowledge of personalities and occasional good humor that he injected into it made this legislation possible. And on the Senate side, Senator Chris Dodd, chairman of the Financial -- Banking Committee. The Banking Committee in the Senate was great expertise as a maestro bringing the Senate Democrats and Republicans together in that regard.

So, the bipartisan plan was carefully negotiated to restore confidence in the markets and to protect the American taxpayer. I'm pleased that the gentlemen I mentioned are here. One other, Charlie Rangel, helped us a great deal on the House side from the Ways and Means Committee. But I want to pay special mention of Ron Emanuel, a person who has had experience with the financial markets, who is well known for his knowledge in that field and respected on both sides of the aisle and I think up and down Pennsylvania Avenue. And his work was indispensable to our reaching a compromise last night. As -- before I yield to Senator Reid I want to tell everyone that I am now informed that at this moment you can find the plan on financial services.house.gov., if not there, on speaker.gov. It's there for all Americans to see, for our members to read, so they can make a decision tomorrow in the House.

I also want to say that later when this -- when this bill passes and is implemented, all of the transaction related to this legislation will be on the Internet within 48 hours. And that represents change. That transparency, that oversight will be very important to the health of our economy.

And now, again, I want to acknowledge the great leadership of Senator Reid who just had had enough and said these negotiations must come to an end. And I thank him for his leadership in this in so many ways.

SEN. HARRY REID, (D), MAJORITY LEADER: Madam Speaker, thank you very much.

Senator Dodd and I were talking earlier. Somebody said we'll be in the Green Room, do you know where this is? This is our old home. Senator Dodd and I served in the House with great fond memories of which we have discussed -- which we've discussed on a number of occasions.

It's very clear that Americans have some reason to be concerned and even angry about where we find ourselves. We know that there's been greed on Wall Street, and it's been exacerbated significantly during the last eight years because they had no oversight. Regulations have been unenforced and it's created the situation we now find ourselves. But we have a lot of opportunities to assess blame. Chairman Dodd is going to hold, before the end of the year, hearings on how we got to where we are. But we are where we are now and we have to do something about it.

We received from the Treasury Department a few days ago a three and a half page bill giving unfettered discretion to the secretary to basically do anything he wanted to do with $700 billion. As the speaker mentioned, there's now a bill on the Internet and it's very clear that it's no longer unfettered discretion. There are responsibilities that we all have to meet to make this work and that's what the legislation is all about.

Our responsibility and that's what this legislation is, is to keep a bad situation from getting worse. Every American has an interest in fixing this crisis. Inaction would paralyze our economy. Even now it's difficult for people to get a car loan. Even now it's difficult for people with the school year. and the situation is to make sure that the student loans are available, because a number of institutions are no longer making student loans. The market is frozen as far as buying homes in many places in our country. People are buying homes in their neighborhood, in the same neighborhood because it's cheaper to buy the home next door to them than the one they just bought three years ago. So we've got to change this and that's what this legislation is all about. It's fair to say that the administration's initial proposal was a non- starter. They wanted a blank check and we couldn't give them one. We've improved the president's plan in a number of ways. The speaker has outlined those. But this has been a bipartisan approach. We've had input from both presidential candidates and we've appreciated that. They have both signed on this morning saying this is a good piece of legislation and we appreciate that. Now we have to get the votes. The speaker is going to move this, as I under it, tomorrow sometime here in House and we will take it up with our rules which are a little more difficult in the Senate. We have a very important vote tomorrow at 12:30 on Amtrak, first time we reauthorize Amtrak since 1997, train safety for the first time since 1994. And after that, as soon as we get this from the House, we're going to move forward on it.

This agreement, though not be perfect, will help to stabilize our economy and I think it's going to protect the American workers, the taxpayers. And I've said it before, and I have to say it again, I've really admired Chairman Dodd and, of course, he and Chairman Frank have spent a lot of time together and we hope that ends soon. We've all had enough of each other, if you know what I mean.

PELOSI: He has to go back to the caucus.

REP. BARNEY FRANK (D), I have to go back to the Democratic caucus where my eighth attempt at explaining this bill is eagerly awaited.

It's not a bill that any one of us would have written. It's a much better bill than we got. It's not as good as it should be but there's some very valuable points. This is the first time in the history of the United States that anything has been done by Congress curtail excessive CEO compensation. But it's a very good beginning and both Senator Dodd and I plan to address this next year.

Secondly, we have a recognition in this bill, it's not a binding recognition, but it's a recognition, that if there's a short fall in the amount of money collected as we sell the assets, it should be made up not by the general taxpayers but by the financial institutions and the industries that are benefiting. There's a strong statement that say it's binding. At the end of five years the president must send us an accounting. And if there's a short fall, the president must send us a proposal to collect that short fall, not all in one year, a reasonable period, from the institutions and industries that benefitted. These are two very important principles.

Next as Senator Reid and the speaker alluded to, as Senator Dodd and I have discussed, we're debating here the consequences of some grave mistakes. It's important to debate the consequences, but just as you shouldn't blame the victim, you shouldn't blame the consequences. We have to get to the cause. The cause is reckless deregulation by too many people who thought that the market was not only a good creator of wealth, which it is, but sufficient unto itself and that there should be no regulation. The absence of regulation, beginning with the subprime loans that were made, but multiplied in other ways, is at the root this was crisis. It would be irresponsible of us to take this action and not be committed as we all are to try to prevent it from recurring. Finally, let me join in what others have said. People said are you helping Wall Street? Remember, that the people on Wall Street who have gotten wealthy during this period, will live very well no matter what happens over the next couple of months. If lending dries up, if people have trouble refinancing homes, if there aren't car loans, as Senator Reid mentioned, if small businesses can't finance their inventory, the people on wall street aren't going to be hurting. The people who will be hurting is the average American who are already in trouble with this economy with an unemployment rate that's skyrocketing. Add that to a shutdown in credit, the average American would be hurt. It's unfair. The average American didn't cause this problem. We are going to go to the root of the problem next year and prevent it from recurring.

In the meantime, if we do not act a bad situation will become worse and that's why we're determined to get this bill through.

SEN. CHRISTOPHER DODD, (D), BANKING COMMITTEE CHAIRMAN: Thank you, Barney.

I'll be very brief. First of all let me begin by -- thank you, Barney.

FRANK: You're welcome.

I'll defer all tough questions to you down at the caucus.

(LAUGHTER)

FRANK: (Inaudible).

(LAUGHTER)

DODD: Let me begin by thanking Majority Leader Harry Reid, as the speak said last evening, the arrival of the Senate majority leader sometime around midnight, I think it was, Madam Secretary, was a great catalyst for moving the final pieces of this together to allow us to arrive at the result we were at about 1:30 in the morning. The speaker was remarkable. I'm preaching to the choir for those of you who cover it every day, but to host all of this beginning yesterday afternoon and sticking with it and staying there. It was a great asset in all of this process. So we're all deeply grateful to her.

In many ways, I'm saddened to be here. This is a day that none of us should celebrate. This is a truly sad occasion in many ways because we're having to grapple with a problem that was avoidable and preventable. It was not a natural phenomenon. This was not a hurricane or a tornado that came through, an act of god. This occurred because of the failure to discipline, failure to enforce, failure to be on the street regulating an environment that should have been far more policed than it was. But we are where we are. We were asked to then come together and formulate a proposal to allow us to get back on our feet again and to give our country a chance to recover economically.

If this were just about lower Manhattan, I wouldn't be here today. I would not have supported the proposal. It was merely designed to support a group of industries in New York City or elsewhere. We're here, as the speaker and majority leader and Barney Frank have said, because of the implications that affect people far beyond lower Manhattan that affect people in communities and small towns, small business, families counting on income to provide for their retirement, their 401(K)s, their accounts that allowed them to send their children to college, their ability to hold on to a job. That's what this is about. If we had not acted there's legitimate concern that everyone one of these people and these issues have been adversely affected. We're here to try to put ourselves back on our feet again and deal with it in a responsible fashion.

The bill that the president sent us a week ago yesterday had a life span of about an hour. It was from that point forward we started to draft legislation to deal with the conditions we though critical in order for us to support anything like this. First and foremost to make sure taxpayers would be considered first and foremost with any kind of recovery.

Secondly, that we see to it that executive compensation would be dealt with, as Barney has just said, maybe for the first time ever and to see people who were culpable in all this would not benefit from it.

Thirdly, to make sure there's accountability. And there are strong accountability provisions in this bill, an independent I.G., and independent GAO study, a separate board, an advisory board to monitor and watch how these dollars are spent, and to deal with forbearance in the mortgage issue, as the speaker has spoken about. So these issues are now incorporated in this bill.

It's not a bill, as Barney said, he and I would have written alone but we had to work with our colleagues. I want to thank Judd Gray, my counterpart, in a sense, on the Senate side, for his good work. Roy Blunt over here as well, who was terrific last evening in representing the House Republicans. I want to thank Bob Bennett and Bob Corker as well, Senators that I worked with closely on the Senate side Banking Committee. I want to thank Chuck Schumer and Jack Reid and Max Bacchus (ph) of the Finance Committee, all pulling together here to make a different. This was a collaborative effort to deal with a proposal that our colleagues in both chambers with support and will allow us to move forward and avoid the kind of cataclysmic events that we were warned about.

So, madam speaker, I thank you very, very much.

Mr. Majority Leader, I thank you as well.

PELOSI: Thank you.

In terms of accountability and regulation, our chairman of Government Reform and Oversight Committee, Congressman Henry Waxman, will have hearings in that regard, continuing, but starting after the bill this week. Again, Barney will be having hearings as was mentioned so will Senator Dodd. The beat goes on. There's more to be done. But, again, working in a bipartisan way we approved the product. This is the administration's problem. They sent us their bill. We did the best we can to improve it. And now we'll see how much support we can get for it as we put it on the Internet and as we talk to our colleagues about it. It's my hope we'll be able to take it up tomorrow.

Yes?

REPORTER: (Inaudible).

PELOSI: Oh, no. This bill just went up on the Internet now. This is when most people are seeing it in its totality. As I say, this is not a Democratic bill. This is the bill that has been sent by the president, improved by the Congress in a bipartisan way. And we will have to have bipartisanship to pass it.

REPORTER: Senator Reid, do you anticipate having (inaudible) package in any part of the process?

REID: We'll have to wait and see. I hope not. The speaker will send this tomorrow. We hope this legislation, we hope it passes here. We'll see what kind of support we get from the Republican House members. When we get it on our side we'll try to move it. We'll get it so we only have to have one vote, I believe. We have people who aren't willing to cooperate. There are ways we can move this as early as Wednesday.

REPORTER: Madam Speaker, (inaudible) insider trading (inaudible).

PELOSI: Haven't seen his legislation, but we're focusing on legislation that we have before us now. I haven't seen it. If anybody has a conflict of interest they should recuse themselves. Those are the rules that we live by.

We'll just take one more question because we have -- two more questions.

Go ahead, mike.

REPORTER: Madam Chair, The Republican proposal (inaudible) what do you say to that?

PELOI: This is their proposal. This is their administration. I had not objected to it being among things that the tactics that the secretary could use in his -- and he's not prevented from doing that. What the president has told me and every suggestion we have made is that it's up to the secretary to see if it will work, because we can have great ideas if they will not work, then they don't accomplish their goal. Perhaps it will work. I don't know. It's not something that I know a great deal about. It's the Republican proposal.

But, there were two issues at the end of the day last night that I think very important to note. One was the golden parachute that met the most resistance from the administration, the golden parachute and the pay for. We were insistent, Democrats and Republicans alike, insistent that this not be any cost to the U.S. taxpayer. Everybody had their ideas about how that would work.

We had a specific idea, that is in the bill now that says that if after, in five years if a judgment is made there's a short fall in the program that the money has not come back, then whatever that short fall will be paid for by those who benefitted from this program in the financial services industry. This is a major, major change. That met with much resistance from the Republicans and from the administration, but then everyone came around to it. I think with some incentive for them to agree because I said, whether it was golden parachutes or preventing the taxpayer from footing the bill, if they couldn't agree last night we could probably find strong bipartisan support on the floor and agreement for those amendments should they come up that way. That was a little persuasive to them but we probably should agree to them last night.

Just one more because I have to go the caucus too.

REPORTER: (Inaudible).

PELOSI: The bill is frozen. It's on the Internet. The public is looking at it. That's the bill we'll bring down to the floor. Thank you.

REPORTER: Thank you.

REPORTER: Thank you.

(END VIDEOTAPE)

DANA BASH, CNN NEWS CORRESPONDENT: There you have it, the Democratic leadership there describing and explaining what they call an important and fair -- they call it a fair decision to come to an agreement on how to bail out those wall street firms. And they say -- the point they were trying to make there, these Democrats, is it's not just about bailing out Wall Street, it's protecting Main Street.

I want to bring in Ali Velshi who has been looking at this and looking at it from the perspective of Wall Street but also from the perspective of Main Street.

Ali, a couple of things. You heard Nancy Pelosi at the end sum really it up in terms of what they think were the most important provisions in here that they got. First of all, the idea that the taxpayers wouldn't in the long run they believe with this end up footing the bill. Why? Because in the wee hours of the night they put a provision in that requires, after five years, if the taxpayers haven't gotten back their $700 billion for this investment, basically in Wall Street, then the firms would have to payback the treasury.

Secondly, the other provision she was talking about, we've heard about is this golden parachute provision, which she says, very interesting in terms of this deal, is it's CEO compensation reform, not a cap, but a reform. A very different thing from some of the things politically that Democrats and Republicans were calling for in terms of stopping the millions and millions of dollars going to Wall Street executive. ALI VELSHI, CNN BUSINESS ANALYST: Chris Dodd sort of said, interestingly enough, he said look this is the first time Congress has dealt with reform of executive pay. They've had a lot of hearings about it but they've never done anything.

As I've been saying all week, this is a red herring. There are ways to pay people to compensate and to work for your company that can work around this. I don't think it's going to have a substantially material effect. But people are mad. They don't want any sense of an idea that people will benefit from the government and taxpayers injecting money into their company. They have made a strong statement.

I commend the parties in this for coming together in what is an unprecedented bill. Even with the guarantee that Nancy Pelosi talked about, the bottom line is, forcing companies to pay you back in five years, assumes they will be around and liquid enough to do that. They have put in as many provisions as they can to protect the taxpayer and come out with something creative. They fought back. I think there were reasonable challenges on all sides of this, Dana, there was one unreasonable challenge and that was from the conservative Republicans who were saying we shouldn't be having a bailout. They will continue to hold out. From the perspective of main street America and Wall Street, that is an unreasonable hold out. This is an unprecedented situation and they've worked out to come up with something that makes sense.

Now, bottom line, how does this connect to you on Main Street, in two very, very important ways. One is liquidity is coming unfrozen as we speak around the world. I'll be able to give you a better hold on that in about three hours when we see international markets open. Money that was held back is now being loaned. We are probably going to see deals within the next 24 hours. Companies that need to raise -- money to pay your salary are free to do that.

Number two, that liquidity works its way down to you needing a loan for your home loan, for student loans, they mentioned, for auto loans, anything you need. There is more money in the system. So you're not going to find some wondrous result from this whole thing. What you're going to find is a system freezing up over the last seven or eight days is unfrozen. It is absolutely, very necessary deal that will be hard for taxpayers to feel the benefit of. All you won't feel is another bank going down that might now close a deal.

We're keeping a close eye on Wachovia, the next bank in terms of a target for another buyer. We're in touch with them. A lot of people say Washington Mutual wouldn't have been bought out if there was greater liquidity in the system.

If you're sitting at home on the Internet looking at that deal, wondering what it does for you, this is more about what's not going to happen that's bad because they cut this deal, Dana.

BASH: Very well put, Ali. Thank you very much.

I just want to mention obviously that press conference we saw and heard. That was the Democratic leadership, in the House and Senate. We're waiting to hear from Republicans. They made clear, and we saw last night, that the administration signed onto this. You see somebody doing a mike check outside the House Republican meeting going on as we speak. We are told by our Deirdre Walter (ph), our House producer, who has been doing excellent reporting on this, she was told inside that meeting House Republican leadership is trying to bring their rank and file along, trying to convince them this is something they can sign onto, because they also got some provisions in this tentative agreement that was finalized or at least came to an agreement in the wee hours of the night. So we're waiting to hear from House Republicans in just a short while.

Until we do that, we're doing to take a quick break. Stay with us. Much more on "BALLOT BOWL." Much more about this bailout right after this.

(COMMERCIAL BREAK)

JESSICA YELLIN, CNN NEWS CORRESPONDENT: Welcome back to "BALLOT BOWL." We just heard from the Democratic leadership in Congress about what they are calling the financial rescue legislation.

I want to bring back in Ali Velshi.

Ali, quickly because we don't have much more time, I want to ask you, we have heard if this deal is not passed, isn't passed by Monday morning there could be economic crisis. We're now hearing the Senate doesn't get to vote on this until Wednesday at the earliest. Does that pose a problem?

VELSHI: Jessica, I can tell you more clearly in three hours when we see what the international markets will do. We follow them from Asia, though Europe to New York. I think there's the sentiment there, if there's some sense -- and we need to wait to hear from the Republicans. If there's some sense the intent here is to get this deal done, I think markets will respond very favorably. What they need to know is this wouldn't be a series of false starts. We're probably in the point, that unless they hear something that says they do not have the votes to get it through, you'll see markets soften up and credit markets unfreeze starting immediately, Jessica.

YELLIN: Thanks so much, Ali.

Dana, I'm going to throw it back to you. I know the candidates are going to be reading this bill, as are the folks in the building you're in.

BASH: Absolutely, and they're doing it right now. And before we leave, we want to remind out viewers, we heard from Democrats in a press conference, talking about why they think this, at the end of the day, will be the way to deal with the financial crisis and bail out Wall Street, they said, for Main Street. Terms we've heard a lot lately.

We're waiting to hear from a critical, critical group on Capitol Hill, House Republicans. They have been meeting behind closed doors. They are still meeting now. We expect to hear from the leadership whether they can support this. That's an important thing to hear.

We'll hear that later on, on the next program, that's Don Lemon in the "Newsroom." And that's right after this.

(COMMERCIAL BREAK)