Stalled

They met, they photo-oped, they failed. So far, no deal.

The status of a rescue plan for the nation’s financial system was in doubt, at least for the moment, on Thursday as lawmakers emerged from a White House meeting with President Bush to say that negotiations have a ways to go.

Looking tired and annoyed, Mr. Dodd complained that late complications were making the episode sound more like “a rescue plan for the Republican presidential candidate, than one for the country’s financial system.

It does no good, Mr. Dodd said, “to be distracted for two or three hours by political theater.”

It seems that Democrats are so depressed over the reality, setting in over recent weeks, that Barack is going to lose this election, that they can't buckle down and focus in on solving the crisis. They feel compelled to claw at the GOP.

The leading Democratic negotiator on the Bush administration's $700 bailout plan accused John McCain of undermining the proposal and prodding House Republicans to lay out a wholly different approach that is opposed by the White House.

"This is the presidential campaign of John McCain undermining what Hank Paulson tells us is essential for the country," said Democratic Rep. Barney Frank, (D-Mass.), chairman of the House Financial Services Committee. "This is McCain at the last minute getting House Republicans to undermine the Paulson approach."

Republican leadership aides reacted incredulously to Frank's broadside, saying there was no way McCain's chief economic adviser, Douglas Holtz-Eakin, could undermine a deal with House Republicans that has never had rank-and-file support.

Republicans expressed their concerns this morning, they said, well before McCain's arrival, and before Democrats started telling the media that a deal was close. Were Democrats trying to sandbag McCain - saying a deal was done when it wasn't so they could blame him for breaking it up?

(McCain's chief economic adviser, Douglas) Holtz-Eakin met this morning with Boehner, House Minority Whip Roy Blunt (R-Mo.) and House Republican Conference Chairman Adam Putnam (R-Fla.), but the GOP leaders did virtually all of the talking, and what they told him was how little support the $700 billion package had with their rank-and-file.

The senator was apparently alluding to a growing revolt by conservative House Republicans against the proposed $700 billion rescue, and the fact that Senator McCain has not yet endorsed the plan, whose concept runs contrary to the policy positions he has taken for years.

The more time that goes by, the more unhappiness with the plan can fester.

Conservative Republicans, in particular, have said that such a huge government intervention violated their free market principles.

House Speaker Nancy Pelosi of California has made clear that she does not want to approve the bailout plan without rank-and-file Republican support.

A group of Republicans, led by Representative Eric Cantor, a House leader, were circulating an alternative plan that would rely on mortgage insurance, provided by the government, rather than taxpayer purchase of frozen mortgage assets.

A senior Republican lawmaker, speaking on condition of anonymity so as not to undermine the party leadership, said there is a ‘’violent reaction” among House Republicans to the Paulson plan. He said backers of the alternative, one of several that have been proposed in the House, are calculating that they can force the negotiators to accept it as part of a larger deal.

Word is, things got ugly at the White House meeting when Senate Democrats realized that House Republicans, unhappy with the notion of the huge bailout, were pushing an alternative approach.