The Bailout is Dead, Long Live the Bailout

The New Republic's Eve Fairbanks notices that all but four retiring Republicans voted for the bailout bill; the bulk of the opposition came from conservatives whom people didn't take very seriously last week.

[It] highlights an increasingly dominant House dynamic: the rise of the conservatives, what a friend calls the proponents of "free trade, libertarianism, true free markets, freedom from government intervention in a wide range of sectors, true, rock-ribbed, hard core conservatism," led by younger Reps. Jeb Hensarling and Mike Pence. Hensarling and Pence flexed their muscles and showed their power by opposing this bill.

But the question is, well, what did all the flexing accomplish? Talking to Hill staffers today, I'm not convinced that the picture is any better for conservatives. (Certainly it's still pitch black for the resolute invisible hand crowd.) Both the Democrats and the Republicans are proposing new additions to the bill and making it clear what it would take to get them on board. Democrats are talking about adding unemployment insurance to the bill. The Republican proposals are summed up by CQ:

The Republican Study Committee, a group of conservative House Republicans, wants the core of the bill to create a government insurance plan for shaky assets, with premiums paid by financial institutions… [and] new Securities and Exchange Commission regulations prohibiting "mark to market" accounting, which requires companies to value assets based on their current potential sale price.

From what I've heard, adding one or both of the GOP's reforms to the bill that failed yesterday might bring on enough Republicans to pass it, if every Democrat voted the same way. Republicans are not at all sure that they're winning the PR war here. Constituent calls, which were running about 9-1 against the bailout on Monday, were running about 50-50 today, a development pinned on the stock market crash, media alarmism, and Sec. Paulson's grave warnings.