September 27, 2008 / 10:04 PM / 10 years ago

Bailout push is fueled by market fears, pizza

WASHINGTON (Reuters) - Angry messages from voters back home and empty pizza boxes were piling up at the U.S. Capitol on Saturday as lawmakers and staff labored around the clock on a plan to bail out Wall Street.

With one eye on the November 4 elections and another on volatile stock market indices, negotiators were trying to reach agreement on a bill aimed at shoring up the shaky financial system. Some legislators echoed the Bush administration’s pleas for urgent action. Others were still skeptical.

Some congressional staffers have been sleeping at the office and living on pizza, Thai food and sandwiches. True to Washington form, though, most are still in business attire, with only a few marking the weekend by dressing down to jeans.

“We’re all a little punchy,” said one aide, expressing the kind of fatigue that worries outsiders watching the process unfold.

The U.S. Treasury wants to spend up to $700 billion to buy broken mortgage-backed bonds from banks and dump them into a vast government portfolio, betting that the move will help thaw out frozen capital markets.

The plan — being promoted by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke — has met fierce resistance from some quarters in Congress. Embattled lawmakers from the Senate and the House of Representatives were trying to hammer out a list of features acceptable to all.

For days, House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, has been shuttling from meeting to meeting with Paulson, House Speaker Nancy Pelosi, Senate Banking Committee Chairman Christopher Dodd and others.

Presidential politics invaded the frantic proceedings on Thursday when Republican candidate John McCain and Democratic rival Barack Obama both took part in a White House meeting with President George W. Bush that dissolved into a shouting match.

At every step of the way, television cameras and hordes of jumpy journalists have packed the hallways, waiting for the announcement of a final deal. That was still proving elusive by Saturday evening.

Acknowledging that capital markets are in crisis and that Congress must do something, House Republican leader John Boehner said, “We should not be bailing out Wall Street on the backs of the American taxpayers.”

Alabama Rep. Spencer Bachus said on Friday he was stunned a week ago when Paulson proposed the $700 billion bailout. Paulson and Bernanke warned at that time that if Congress did not immediately approve their proposal, the financial system and the economy were in grave danger.

“It caught all of us on the (Capitol) Hill by surprise,” said Bachus, the top Republican on the House Financial Services Committee. “It was a gun to our head. “And any time we rush on that stuff we make mistakes.”

Editing by Chris Wilson

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