McCain has transformed a minority in both houses of Congress and a losing position in the polls into the key role in the bailout package, the main man around whom the final package will take shape.
He arrived in Washington to find the Democrats working with the Bush administration to pass an unpopular $700 billion bailout. The Democrats had already cut their deal with Bush. They agreed to the price tag while Bush agreed to special aid to families facing foreclosure, equity for the taxpayers, and limits on executive compensation. But no sooner had McCain arrived than he derailed the deal.
Knowing how unpopular the bailout is with the American people, the Democrats are not about to pass anything without broad Republican support even though their majorities permit them to act alone. Instead of signing on with the Democratic/Bush package, the House Republicans are insisting on replacing the purchase of corporate debt with loans to companies and insurance paid for by the companies, not by the taxpayers.
That, of course, is a popular position. McCain would be comfortable to debate this issue division all day. And, if the Democrats don't cave in to the Republican position, that's probably exactly what he'll do on Friday night's scheduled debate in Mississippi.
But the Democrats are not about to be stubborn. They know their package is a lemon and need the political cover of Republican support. So the Republicans can write their own ticket — and they will. John McCain will be at the center of the emerging compromise while Obama is out on the campaign trail kissing babies.
If the deal is cut before Friday's debate, my bet is that McCain shows up in triumph. If it isn't, he shows up anyway and flagellates Obama over the differences between the Democratic package and McCain's.
By Monday, at the latest, the Democrats have to cave in and pass the Republican version. They don't dare pass their own without GOP support, so they will have to acquiesce to the Republican version.
Then McCain comes out of the process as the hero who made it happen when the president couldn't and Obama wouldn't. He becomes the bailout expert. And, of course, the bailout will work.
With the feds standing behind the bad debt, whether by purchase or loans and insurance, Wall Street will breathe a sigh of relief. Bears won't dare bet against the economy with the entire weight of the federal government on the other side. They may be bears but they are not rabid.
Finally, McCain, as the reigning expert on bailouts, then can take the tax issue to Obama, saying that a tax increase, such as the Democrat is pushing, would destroy the bailout, ruin the economy, and trigger a collapse.
This bold move by McCain is about to work. Big time.
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