Treasury Secretary Henry Paulson

The Issue:  The current session of Congress goes to recess this Friday to campaign for their respective re-elections or to campaign for their respective presidential candidates.  If Congress has not approved a spending bill to bail out the Wall Street investment firms currently seeking aid for their bad debt, it is doubtful they will recieve aid at all.

Both Henry Paulson, the US Secretary of the Treasury and Ben Bernanke, the Chairman of the Federal Reserve Bank are in Washington fighting for the passage of the Bailout Bill, which is losing support from all sides.  Specifically, taxpayers are upset that their money will be going to save banks who are going under because of their own risky investments.

The Los Angeles Times reported that California Senator Diane Feinstein had received 15,000 calls on the matter and stated “You cannot just sit by and let this thing crash.”  She also stated “How do I know this will work? I don’t.”  Her reaction is not unlike many elected officials, who aren’t convinced of the success of this plan and have significant public pressure not to support it.

Analysis: I don’t expect many elected officials to stand behind this proposal because of the public outcry that has resulted.  Many members of Congress are up for re-election in about a month.  No one wants to go on record as supporting the plan that didn’t work and wasted $700 Billion.  We are in election season and everyone in Congress is trying to stay in office.