In My Time - Dick Cheney [268]
I remember thinking how grounded the president was through the whole economic ordeal. He kept perspective and was very good at handling pressure. He dealt effectively with some of the most difficult and complex economic issues any president has had to face.
On Thursday, September 18, I was traveling when the president’s economic team was scheduled to present the rescue plan they had devised. Keith Hennessey, assistant to the president for economic policy, and Neil Patel, my chief domestic policy advisor, called me on Air Force Two to brief me on the details: a guarantee for money market deposits, an initiative to restore liquidity to the commercial paper market from the Federal Reserve, and the centerpiece, a plan to buy $700 billion of the mortgage-backed securities that were dragging down major institutions and causing credit to seize up. I had long been an advocate of keeping government intervention in the private sector to a minimum. What we were talking about now was the largest such intervention in the history of the republic, and I was a strong supporter. I told Hennessey he could tell the president I was behind the package, and I reinforced that point in a private meeting with the president in the Oval Office the next morning. There was no other option.
I knew the Congress would be wary of such a plan. Republicans who were facing tough reelection battles would not be eager to cast a vote that looked like a Wall Street bailout at precisely the moment when so many Main Street businesses were severely hurting. We briefly contemplated not seeking congressional authority. When the Federal Deposit Insurance Corporation Act had been passed in 1991, it included language that would allow for a major injection of funds directly into the banking system with the approval of the president, the secretary of the Treasury, and a majority of the Federal Reserve Board should there be a threat to the integrity of our financial system. Ben Bernanke made clear, however, that he would feel much more comfortable with congressional approval, so we went to work trying to secure it.
Hank Paulson worked very well with congressional Democrats and spent much time with Speaker Pelosi, House banking chairman Barney Frank, and Majority Leader Steny Hoyer trying to put the package together. House Republicans felt out of the loop and were soon so angry that they were refusing to participate in meetings with Secretary Paulson. I got a call from House Minority Leader John Boehner asking me to come up to the Hill to brief the Republicans.
On Tuesday, September 23, I left the West Wing at 8:45 on my way to the Capitol. I had Keith Hennessey and Kevin Warsh, a member of the Federal Reserve board of directors, with me. When we walked into the large meeting room in the Capitol, the House Republican conference had already gathered and they gave me a very warm welcome, a standing ovation. They expressed the same support, giving me another ovation, as I left. But in between my coming and going, many members made it quite clear that they would not support the $700 billion Troubled Assets Relief Program, or TARP, as it was known. There were a number of problems, but the biggest was that we had allowed the package to be described as a “Wall Street bailout,” leaving the impression that we were giving taxpayer money to Wall Street fat cats rather than trying to prevent a total financial collapse. In addition, I don’t think we had adequately conveyed to the public how serious the consequences of not acting could be. Joe Barton, an old friend and Republican