Wall Street: Congress set for the $700bn bank job-The Independent UK

Instead, everything fell apart. As Democrats tell it, Republicans in the House of Representatives cynically turned against a deal they were backing only 12 hours earlier. The White House talks became a virtual slanging match after John Boehner, the House minority leader, declared the package was unacceptable and came up with counterproposals of his own. President Bush was dismayed: "If money isn't loosened up, this sucker could go down," he warned the meeting. But this desperately unpopular President, with under four months left in office, is now so weak he could not control his own party, on his own turf.

Chris Dodd, the Democratic chairman of the Senate Banking Committee, was visibly furious, telling reporters that the new Republican stance was "not a rescue plan for our financial system, but a rescue plan for John McCain". In fact, the rebels had reasons stretching beyond the salvation of their White House nominee. They had reservations all along, these Republicans claimed – and indeed, many are conservatives who object to the bailout on ideological grounds, as tantamount to socialism.

The most important factor, however, was public opinion. Out on Main Street America, in blue states as well as red, the $700bn bailout is even less popular than the President. Not only Mr McCain, but all 435 members of the House are up for re-election. "They simply have to take account of public opinion," a Republican strategist said. And that applies to Democrats as well as Republicans. For that reason, Democrats will not pass the measure on their own, even though they have the majorities to do so.

The dissidents are playing a gigantic game of chicken with the markets. If bank credit clogs up and Wall Street crashes, public opinion could rapidly turn against them.

http://www.independent.co.uk/news/world/americas/wall-street-congress-set-for-the-700bn-bank-job-944759.html