History > 2008 > USA > Politics > Senate (II)

Senate Drops Automaker Bailout Bid

December 13, 2008
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — The Senate on Thursday night abandoned efforts to fashion a government rescue of the American automobile industry, as Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.

The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which say they may not be able to survive through this month.

After Senate Republicans balked at supporting a $14 billion auto rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a deal but deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009.

The failure in Congress to provide a financial lifeline for G.M. and Chrysler was a bruising defeat for President Bush in the waning weeks of his term, and also for President-elect Barack Obama, who earlier on Thursday urged Congress to act to avoid a further loss of jobs in an already deeply debilitated economy.

“It’s over with,” the Senate majority leader, Harry Reid of Nevada, said on the Senate floor, after it was clear that a deal could not be reached. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

Mr. Reid added: “This is going to be a very, very bad Christmas for a lot of people as a result of what takes place here tonight.”

The Republican leader, Senator Mitch McConnell of Kentucky, said: “We have had before us this whole question of the viability of the American automobile manufacturers. None of us want to see them go down, but very few of us had anything to do with the dilemma that they have created for themselves.”

Mr. McConnell added: “The administration negotiated in good faith with the Democratic majority a proposal that was simply unacceptable to the vast majority of our side because we thought it frankly wouldn’t work.”

Moments later, the Senate fell short of the 60 votes need to bring up the auto rescue plan for consideration. The Senate voted 52 to 35 with 10 Republicans joining 40 Democrats and 2 independents in favor.

The White House said it would consider alternatives but offered no assurances.

“It’s disappointing that Congress failed to act tonight,” Tony Fratto, the deputy press secretary, said. “We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable. We will evaluate our options in light of the breakdown in Congress.”

Markets reacted quickly in Asia. In Japan, the Nikkei 225 index closed down 5.6 percent after the proposal failed and other markets registered substantial retreats as well.

Immediately after the vote, the Bush administration was already coming under pressure to act on its own to prop up G.M. and Chrysler, an idea that administration officials have resisted for weeks.

House Speaker Nancy Pelosi and other lawmakers called on the administration to use the Treasury’s bigger financial system stabilization fund to help the automakers, but there may not be enough money left to do so.

About $15 billion remains of the initial $350 billion disbursed by Congress and Treasury officials have said that money is needed as a backstop for existing programs.

Democrats instantly sought to blame Republicans for the failure to aid Detroit, while a number of Republicans blamed the union. But on all sides the usual zest for political jousting seemed absent given the grim economic outlook.

“Senate Republicans’ refusal to support the bipartisan legislation passed by the House and negotiated in good faith with the White House, the Senate and the automakers is irresponsible, especially at a time of economic hardship,” Ms. Pelosi said in a statement.

She added: “The consequences of the Senate Republicans’ failure to act could be devastating to our economy, detrimental to workers, and destructive to the American automobile industry unless the President immediately directs Secretary Paulson to explore other short-term financial assistance options.”

Senator George V. Voinovich, Republican of Ohio, and a supporter of the auto rescue efforts, said: “I think it might be time for the president to step in.” Senator Christopher S. Bond, Republican of Missouri, also urged the White House to act.

So far, the Federal Reserve also has shown no willingness to step in to aid the auto industry.

Democrats have argued that the Fed has the authority to do so and some said the central bank may now have no choice but to prevent the automakers from entering bankruptcy proceedings that could have ruinous ripple effects.

G.M. and Chrysler issued statements expressing disappointment.

G.M. said: “We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis.”

Chrysler said it would: “continue to pursue a workable solution to help ensure the future viability of the company.”

Earlier in the day, G.M. said that it had legal advisers, including Harvey R. Miller of the firm Weil Gotshal & Manges, to consider a possible bankruptcy, which the company until now has said would be cataclysmic not just for G.M. but for Chrysler and the Ford Motor Company as well.

Ford, which is better financial shape than its competitors, had said it would not seek the emergency short-term loans for the government, but urged Congress to help its competitors because the fates of the Big Three are so closely linked.

The rescue plan approved by the House on Wednesday, by a vote of 237 to 170, would have extended $14 billion in loans to the G.M. and Chrysler and required them to submit to broad government oversight directed by a car czar to be named by Mr. Bush.

But even before the House vote, Senate Republicans voiced strong opposition to the plan, which was negotiated by Democrats and the White House.

At a luncheon with White House chief of staff, Joshua B. Bolten, on Wednesday they rebuffed his entreaties for support.

And on Thursday morning, Mr. McConnell dealt a death blow to the House-passed bill, giving a speech on the Senate floor in which he said that Republican senators would not support it mainly because it was not tough enough.

“In the end, it’s greatest single flaw is that it promises taxpayer money today for reforms that may or may not come tomorrow,” Mr. McConnell said.

Mr. McConnell, however, held out slim hope for a compromise suggesting that Republicans could rally around a proposal by Senator Bob Corker, Republican of Tennessee, to set stiffer requirements for the automakers.

Mr. Obama, whose transition team consulted with Congressional Democrats and the White House on the efforts to help the automakers, urged Congress to act in his opening remarks at a news conference on Thursday in Chicago.

“I believe our government should provide short-term assistance to the auto industry to avoid a collapse while holding the companies accountable and protecting taxpayer interests,” he said. “The legislation in Congress right now is an important step in that direction, and I’m hopeful that a final agreement can be reached this week.”

But in Washington, there was little appetite among Senate Republicans for yet another multibillion-dollar bailout of private companies. Still, with the Democrats and the White House eager to reach a deal, Mr. Corker’s proposal became the subject of intense negotiations well into the evening.

Under his plan, the automakers would have been required by March 31 to slash their debt obligations by two-thirds — an enormous sum given that G.M. alone has more than $60 billion in outstanding debt.

The automakers would also have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees in the United States.

It was over this proposal that the talks ultimately deadlocked with Republicans demanding that the automakers meet that goal by a certain date in 2009 and Democrats and the union urging a deadline in 2011 when the U.A.W. contract expires.

G.M. and Chrysler have said the two companies would likely not survive through this month without government aid, and the companies had already agreed to carry out sweeping reorganization plans in exchange for the help.

The negotiations over Mr. Corker’s proposals broke up about 8 p.m. and Mr. Corker left to brief his Republican colleagues on the developments.

The Republicans senators emerged from their meeting an hour later having decided they would not agree to a deal. Several blamed the autoworkers union.

“It sounds like the U.A.W. blew it up,” said Senator David Vitter, Republican of Louisiana.

Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee and a leading critic of the auto bailout proposal, said: “We’re hoping that the Democrats will continue to negotiate but I think we have reached a point that labor has got to give. If they want a bill they can get one.”

The last-ditch negotiations made for a dramatic scene on the first floor of the Capitol, where high-level lobbyists for G.M. and Ford, as well as Stephen A. Feinberg, the reclusive founder of Cerberus Capital Management, the private equity firm that owns 80 percent of Chrysler, gathered with senators and legislative staff in an ornate conference room.

A Democratic aide said that there were no lobbyists present who represented Chrysler.

At times, various participants huddled in corners of the cavernous hallway outside the conference room, shielding their documents and whispering into their cellphones, as a throng of reporters and photographers waited nearby.

Some of the lobbyists and banking committee staff members huddled by two towering windows, looking out on a frigid rain that had been falling all day.

Senate Drops Automaker Bailout Bid, NYT, 13.12.2008,
http://www.nytimes.com/2008/12/13/business/13auto.html

Back on Capitol Hill,

Auto Executives Still Find Skeptics

December 5, 2008
The New York Times
By DAVID STOUT

WASHINGTON — The head of the Senate Banking Committee said on Thursday that the Big Three automakers had convinced him that they deserved federal aid, but another prominent member of the panel remained firmly opposed, and it was obvious that the companies still faced considerable skepticism.

“Not perfect by any means,” Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the committee, said of the Big Three’s detailed plans to turn their companies around. Nevertheless, Mr. Dodd said, the companies had demonstrated “a commitment to that kind of necessary reform” needed to keep American carmakers viable in the 21st century.

But the committee’s top Republican, Senator Richard C. Shelby of Alabama, said Detroit had failed to show that it could reverse a decades-long slide. “I intend to oppose bailing out the Big Three,” Mr. Shelby said at the outset.

Not only had the auto executives failed to make a better case than they did at their first appearance on Capitol Hill two weeks ago, but new questions have arisen, Mr. Shelby said. In particular, he said, the companies had raised their request for federal aid to $34 billion from $25 billion.

“How are you going to pay it back?” Mr. Shelby asked. A bit later, Mr. Shelby wondered aloud why the companies should not be forced into a Chapter 11 bankruptcy filing, which provides for restructuring “if they’re worthy of restructuring.”

As the hearing unfolded, it became clear that a broad assistance plan for Detroit was by no means a sure thing, with public opinion running against it and many lawmakers opposed, and that the contours of any such plan are uncertain.

But another theme running through the session was the shaky state of the entire economy, especially with the recent official finding that the country is indeed in a recession.

Mr. Dodd and Mr. Shelby agreed on one thing: that the original $700 billion rescue plan approved weeks ago for banks and investment companies was being run haphazardly in Washington, and had failed to move lenders to open the flow of credit, as it was intended.

“Still waiting, still waiting,” Mr. Dodd said in exasperation, arguing that if the government could make $700 billion available for the financial sector of the economy, it ought to be able to find a much smaller sum for Detroit, especially since not doing so would endanger “tens, if not hundreds of thousands of jobs.”

The $700 billion package already enacted could be tapped to aid the auto companies, Gene L. Dodaro, the acting comptroller general of the United States, said in response to questions. For that matter, Mr. Dodaro said in response to questions from Mr. Dodd, the Federal Reserve has the power to help the companies.

“Both of those avenues of authority are available,” Mr. Dodaro said, noting that traditionally the Fed has focused on helping financial institutions.

Mr. Dodaro said any federal aid to the three carmakers should be supervised by a powerful board, but Senator Charles E. Schumer, Democrat of New York, suggested that a single individual be assigned that mission, partly for the sake of speed.

As for the auto companies self-inflicted pain, Mr. Schumer said he still did not trust their leadership. But he, too, said the companies could not be allowed to fail. And he said formal bankruptcy proceedings would be a death sentence for Detroit.

“Nobody’s going to buy a car from a bankrupt company,” Mr. Schumer said.

The chief executives of the Detroit automakers were back on Capitol Hill on Thursday for the legislative equivalent of a mulligan.

Two weeks ago, the executives — Alan R. Mulally of Ford, Rick Wagoner of General Motors and Robert L. Nardelli of Chrysler — asked Congress for $25 billion in loan guarantees but left Washington empty-handed after skeptical lawmakers refused to approve federal aid until they heard detailed plans on how the companies could be viable .

“It’s fair to say that last month’s hearings were difficult for us,” Mr. Wagoner said Thursday in prepared remarks. “But we learned a lot.”

This time, the executives will be seeking more money — $34 billion — and also altered their approach. Instead of telling lawmakers about the fallout to the economy if the carmakers are allowed to collapse, the executives talked about building fuel-efficient cars and long-term strategies.

“Our plan dramatically accelerates and expands the restructuring that we’ve been driving in North America for the past several years,” Mr. Wagoner said in prepared remarks. “It’s a blueprint for creating a new General Motors. ... One that is lean, profitable, self-sustaining and fully committed to product excellence and technology leadership, especially in alternative compulsion.”

In its plan to Congress, G.M. said it would significantly reduce jobs, factories, brands and executive compensation in a broad effort to become more competitive with American plants operated by Toyota, Honda and other foreign auto companies.

The plan also called for increased production of hybrid, flex-fuel and other fuel-efficient vehicles, and “an increased commitment to energy-efficient technologies.”

“Ford is committed to building a sustainable future for the benefit of all Americans,” Mr. Mulally said in prepared text, “and we believe Ford is on the right path to achieve this vision.

Two companies, G.M. and Chrysler, have both said they are dangerously close to running out of cash to run their operations by the end of the year. Ford is somewhat healthier, but is also seeking government loans.

The three executives, along with the head of the United Auto Workers union, Ron Gettelfinger, will also appear at a hearing on Friday in the House.

The U.A.W. on Wednesday agreed to suspend its jobs bank, in which idled workers continued to be paid, and to delay financing for retiree health care. In addition, the union said it would be willing to modify its current contract.

Democratic Congressional leaders have said that they want to help the automakers and that they were heartened by the gesture of contrition that the executives made by driving to Washington — rather than flying on corporate jets, as they did two weeks ago — and by the more comprehensive plans submitted by the companies.

But the political climate on Capitol Hill is still doubtful for the automakers, and only seemed to worsen on Wednesday with a new CNN poll showing a majority of Americans opposing a taxpayer rescue.

As a result, there is growing concern among the Democratic leadership that they will simply not be able to drum up enough votes to pass an aid package next week, and that to do so will require a major lobbying effort by President Bush and President-elect Barack Obama.

“We don’t have a good sense from our members that this is something they want to do,” a senior House Democratic aide said. “It’s going to take Bush and Obama calling people.”

Bill Vlasic contributed reporting from Washington and Nick Bunkley from Detroit.

    Back on Capitol Hill, Auto Executives Still Find Skeptics, NYT, 5.12.2008, http://www.nytimes.com/2008/12/05/business/05auto.html?hp

Ford Says It Can Get By

if Rivals Survive

December 3, 2008
The New York Times
By NICK BUNKLEY

DETROIT — The Ford Motor Company told Congress on Tuesday that it wanted access to $9 billion in loans but that it could survive and become profitable in three years without the money unless the current recession “is longer and deeper than we now anticipate.”

In a 33-page plan submitted to the Senate Banking Committee, Ford said it was healthier than the other two Detroit automakers but warned that its fortunes were closely tied to that of its two rivals, General Motors and Chrysler, both of which have said they could soon run out of money. “Because our industry is an interdependent one, with broad overlap in supplier and dealer networks, the collapse of one or both of our domestic competitors would threaten Ford as well,” the company said in its plan. “It is in our own self-interest, as well as the nation’s, to seek support for the industry at a time of great peril to this important manufacturing sector of our economy.”

The three Detroit automakers are scheduled to appear before Congressional committees later this week as they seek $25 billion in government loans. The executives are returning to Washington a second time after they were unable to convince lawmakers during earlier hearings that taxpayer money could save the industry. Lawmakers told the auto companies to submit plans to how they would restructure to become viable.

Ford’s chief executive, Alan R. Mulally, said in a statement: “For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company.”

If the company does access the loans, it said Mr. Mulally’s salary, which amounted to $21 million last year, would be reduced to $1 a year. Last month, when he and the chief executives from G.M. and Chrysler were asked whether they would be willing to eliminate their own pay, Mr. Mulally had been the most resistant.

The three men also had been criticized for flying corporate jets to Washington to ask for financial assistance. This week, Mr. Mulally plans to drive a Ford Escape hybrid sport-utility vehicle to Washington to testify a second time before Congress, and Ford said in its submission that it now plans to sell all five of its corporate jets.

The company said that it would speed up its plans for electric vehicles, starting to roll them out in 2010. Ford will also invest up to $14 billion to improve fuel efficiency over the next seven years.

Ford acknowledged making “mistakes and miscalculations in the past” but asserted that it has made considerable progress in its restructuring. It said its performance was improving before the weakening economy and tighter credit markets caused industry sales to plummet.

The company said it expected to break even or earn a profit in 2011, the first time it has given such financial guidance since abandoning its goal of making money in 2009. Its original restructuring plan had called for a return to profitability in 2008. Ford lost $8.7 billion in the first nine months of this year.

    Ford Says It Can Get By if Rivals Survive, NYT, 3.12.2008, http://www.nytimes.com/2008/12/03/business/03auto.html?hp

Change in Congress More Than a Slogan

November 21, 2008
The New York Times
By CARL HULSE

WASHINGTON — Age and seniority gave way in Congress on Thursday, a transformational shift for an institution where tremendous power has traditionally been built on sheer longevity, accumulated and savored with the passage of years.

The farewell speech of Senator Ted Stevens, 85, a 40-year member of Congress, came on the same day that House Democrats deposed Representative John D. Dingell, 82, a 53-year member, from his committee chairmanship. It was one of those moments when lawmakers could almost hear an era ending.

“This election really was about change,” said Senator Norm Coleman, Republican of Minnesota, as he sorted through the striking events of the day.

It was not only Mr. Stevens, an Alaska Republican, and Mr. Dingell, a Michigan Democrat, who found themselves treated like old bulls put out to pasture. Senator Robert C. Byrd, a West Virginia Democrat who turned 91 on Thursday and has amassed 56 years in Congress, had already voluntarily relinquished the chairmanship of his beloved Appropriations Committee before his colleagues could ease him out.

The abrupt change in status for the three lawmakers sent this fact swirling around Capitol Hill: their combined age of 258 exceeds the age of the United States itself.

The careers of other very senior lawmakers were also coming to a close, including Senator John W. Warner, 81, the Virginia Republican elected 30 years ago; Senator Pete V. Domenici, 76, the New Mexico Republican who spent 36 years in the Senate, and Representative Ralph Regula, Republican of Ohio, 84, a 36-year veteran of the House.

As they watched the procession, lawmakers said the generational transition had potential consequences for Congress, as the House and Senate were losing most of their World War II-era veterans and that unique perspective on history.

But younger lawmakers say they are being inspired to assert themselves, spurred in some respects by the success of President-elect Barack Obama, a first-term senator who this year battered the seniority system on his way to the White House, leapfrogging more experienced senators of both parties along the way.

“You have got a lot of ambitious — in a good way — and talented younger and newer members of the Congress who are trying to find ways to create their niche,” said Representative Stephanie Herseth Sandlin, a 37-year-old Democrat from South Dakota who next year will take a leadership role with the centrist Blue Dog coalition. “I think there is certainly a respect for our colleagues who are longer-serving members of Congress, but also an impatience based on what we deem to be the issues of our time and our desire to influence those issues.”

While the changes made for a remarkable moment, seniority is far from dead, and the best way to the top in Congress remains formidable staying power.

Mr. Byrd is being replaced as chairman of the Appropriations Committee by Senator Daniel K. Inouye, Democrat of Hawaii, who at 84 has spent 46 years in the Senate. Representative Henry A. Waxman, Democrat of California, the man who upended Mr. Dingell, is 69 and has been in the House since 1975. And Senate Republicans this week beat back an effort to impose term limits on their party leader and members of the Appropriations Committee.

But there was a sense in the Congress that the days were over when a lawmaker could seize a committee chairmanship and keep an ironclad grip on it for decades.

“Bit by bit, the pillars of this old institution are shaken,” said Mr. Warner as he yielded the Senate floor Thursday evening for what could be the last time. “But I am not suggesting that the pillars are not going to hold the roof over a better generation that might come along.”

Some of the pillar-shaking is coming from the very fact that serving in Congress is no longer the absolute goal of many members, and some find themselves drawn to the private sector or other government jobs, partially out of frustration at the inability to advance quickly. The interest being shown by lawmakers eager to move to the Obama administration is striking — and reflects an unwillingness to wait for a chairmanship.

Senator Hillary Rodham Clinton, Democrat of New York, for example, is in her second term and attracted millions of votes in the primary season, yet still sees herself removed from real power in the Senate. Representative Rahm Emanuel, Democrat of Illinois, a man who had already made a quick jump to leadership, gave up the No. 4 Democratic post in the House and a legitimate chance at becoming speaker to take the White House chief of staff job in the Obama administration.

In addition, some see the seniority system as fostering some of the ethics problems that have plagued the House and Senate in recent years as lawmakers grow too comfortable in their jobs, seeing the rules as flexible and themselves as untouchable.

Senator Jim DeMint, Republican of South Carolina, said he had recent instances of abuse in mind when he unsuccessfully proposed this week that Republican members of the Appropriations Committee be held to six-year terms. He said it was his view that such restrictions could curb potential corruption.

“Obviously we have had some problems in the House and Senate when it comes to that,” Mr. DeMint said.

While lawmakers said an infusion of new ideas and new blood could be healthy, they lamented the loss of experience and world view held by some of the older senators who grew up in the years of the Great Depression and helped shape America in the post-war years.

On Thursday, it was striking how members of Congress can spend a lifetime building power and pushing legislation, but how quickly it can end. It did for Mr. Stevens, his re-election bid denied, as he took the floor Thursday to remember his work on behalf of his state and reflect somberly with his colleagues and staff.

“That’s it,” he said in his final remarks, “40 years distilled into a few minutes.”

    Change in Congress More Than a Slogan, NYT, 21.11.2008, http://www.nytimes.com/2008/11/21/us/politics/21cong.html?ref=washington

Congressional Memo

Lame Duck? The Dodo Seems a More Apt Bird

November 21, 2008
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — Democratic leaders, exuberant over their Election Day victories, called Congress back to Washington with ambitious plans to push an economic stimulus measure and throw a lifeline to the struggling auto industry. Now, amid fears of deflation, soaring unemployment, plummeting stock prices and deep consumer anxiety, lawmakers are leaving town having approved only a modest extension of jobless benefits.

Lawmakers may yet be back next month, but for now the meager results show why lame-duck sessions often do not work. And why some historians and scholars of Congress, not to mention some of the most prominent lawmakers over history, think that calling such sessions lame is overly generous.

The result this week was that America’s automakers, already reeling from the hard economic times, got banged over the head with a hard lesson about legislative politics in Washington.

Democrats are relishing their more robust majority next year — and a Democratic president — and so they saw no reason to cave to Republican demands. Republicans, in turn, while chastened by the election results, saw no reason to fast-forward Democratic control of Washington.

Several Republican lawmakers who are either retiring or were defeated said they would not support aid for the auto industry. And their impending departures gave them little or no incentive to compromise, evidence of why postelection sessions are dicey.

Consider Senator John E. Sununu, Republican of New Hampshire, who lost his bid for a second term, and who on Wednesday objected to a bill offered by Senator Barbara A. Mikulski, Democrat of Maryland, to help the auto industry. Ms. Mikulski snarled, “Boy, am I sorry that is the last act of John Sununu in the Senate.”

Mr. Sununu returned to the floor later. “Well, it won’t be the last thing I do,” he said. “If nothing else, the last thing I will do is explain why her legislation was such a terrible idea.”

The Republican leader, Senator Mitch McConnell of Kentucky, knew that this week offered one of his last moments, ahead of two years of wider Democratic control, to dictate what could or could not get through the Senate.

And Mr. McConnell made clear that he opposed any new money for Detroit and would only support speeding up access to $25 billion in federally subsidized loans already approved. Democratic leaders rejected that idea, leaving the automakers empty-handed.

The assistant majority leader, Senator Richard J. Durbin, Democrat of Illinois, glumly acknowledged that the effort to aid the auto industry appeared to be mired in lame-duck muck. “We’re at an impasse,” he said.

To be sure, there are examples of momentous things occurring in lame-duck sessions. Congress first proposed repealing Prohibition during a lame-duck session in 1933. The Homeland Security Department was created in a lame-duck session in 2002 and several major budget bills have been approved in postelection sessions.

Often the focus of such sessions has been narrow. President Bill Clinton was impeached in a lame-duck session in 1998; and Senator Joseph R. McCarthy of Wisconsin was censured in a lame-duck session in 1954.

Mostly, however, lame-duck sessions have been rare — and useless.

After a particularly bitter postelection House session in 1982, Speaker Thomas P. O’Neill Jr. vowed to never hold another one. He kept that promise.

“Lame-duck sessions are poor excuses for sloppy, secretive legislation,” John B. Oakes wrote in an Op-Ed in The New York Times after the 1982 session. “The latest was not only unnecessary but degrading and dangerous.”

In recent years, Congressional leaders have often held postelection sessions hoping to wrap up unfinished business.

“Somehow there is this thought that when you come back after an election that politics is over with and everybody is just going to tackle the issues,” said Donald K. Ritchie of the Senate Historical Office. “But the politics are the same, and people are now counting heads as to whether I’ll do better or worse in the next Congress. So it’s often not a very productive period.”

Mr. Ritchie added, “Whatever problems they have during the regular session, they are compounded during a lame-duck session.”

The problems in the 110th Congress over the last two years, of course, have been bountiful, with a record number of filibusters in the Senate.

In an interview, the former Senate majority leader, Trent Lott, Republican of Mississippi, could not mask his disdain for lame-duck sessions.

“In my 35 years in Congress, I have probably been through 15 or 16 lame-duck sessions,” he said. “They are always a mess, accomplish little or nothing and wind up being an embarrassment to everybody.”

Mr. Lott said he always resisted holding postelection sessions. “One time I think I got rolled by Newt and the House guys,” he said in reference to the former speaker, Newt Gingrich. “And it was a mess.”

Mr. Lott said that inevitably lawmakers take up controversial issues, guaranteeing that little gets done. “You just start doing dumb things, all of a sudden everybody has got a bad attitude, and it just doesn’t seem to work,” he said.

But Mr. Lott said that if Congressional leaders miscalculated by coming back into session, the automakers made a bigger miscalculation by seeking aid before President-elect Barack Obama took office. “They have made many calculated mistakes or uncalculated,” Mr. Lott said of Detroit’s Big Three. “I don’t know who they get their advice from.”

    Lame Duck? The Dodo Seems a More Apt Bird, NYT, 21.11.2008, http://www.nytimes.com/2008/11/21/washington/21lameduck.html?hp

Democrats Vow to Pursue an Aggressive Agenda

November 6, 2008
The New York Times
By DAVID M. HERSZENHORN and CARL HULSE

WASHINGTON — Flush with victory built on incursions in the South and West, Congressional Democratic leaders promised to use their new power to join President-elect Barack Obama in pursuing an aggressive agenda that puts top priority on the economy, health care, energy and ending the Iraq war.

By reaching deep into traditionally Republican turf, the Democrats in Tuesday’s elections expanded their majorities in both the House and the Senate. They picked up at least five Senate seats, in Colorado, New Hampshire, New Mexico, North Carolina and Virginia. And they picked up at least 19 House seats, with new Democrats coming from Alabama, Arizona, Colorado, Nevada, New Mexico, North Carolina and Virginia.

The full extent of the new Democratic majorities remained unknown, with tight Senate races still undecided in Alaska, Minnesota and Oregon and a runoff scheduled on Dec. 2 in Georgia. At least six House races remained too close to call.

Still, the promise of strong control of Congress also left Democratic leaders grappling with challenges of balancing a wider spectrum of views within their own party while confronting a diminished House Republican conference now decidedly more conservative.

The exuberance of Tuesday night’s victories was also tempered by unease over the public’s high expectations for a party in control of both Congress and the White House amid economic turmoil, two wars overseas and a yawning budget gap.

On the day after the election, leadership battles were breaking out across Capitol Hill as lawmakers contemplated the prospects of new power and opportunity. The quick start to the skirmishing signaled that some of the more bitter fights in the next Congress could be internal battles among Democrats.

For instance, Democratic aides said that Representative Henry A. Waxman of California was expected to challenge Representative John D. Dingell of Michigan, the longest-serving House Democrat, for chairmanship of the Energy and Commerce Committee. Energy issues are expected to be a major focus of the Obama administration.

And before the week is out, Democrats could try to oust Senator Joseph I. Lieberman of Connecticut, the independent who campaigned for Senator John McCain, from the chairmanship of the Homeland Security and Governmental Affairs Committee.

Speaker Nancy Pelosi, who spoke with Mr. Obama by phone on Wednesday morning, said that they had made plans to discuss coordinated efforts for the transition and the new Congress, but that a more ambitious agenda would unfold next year.

“Our priorities have tracked the Obama campaign priorities for a very long time,” Ms. Pelosi said at a news conference where she cited the economy, health care, energy and the Iraq war as topping the agenda.

She said Democrats were talking with the Bush White House about a potential $61 billion economic stimulus that could be approved in a lame-duck session.

But Ms. Pelosi said Democrats could open the 111th Congress in January with efforts to adopt measures blocked by President Bush, including ones to expand the State Children’s Health Insurance Program and embryonic stem cell research. She said Democrats had no choice but to chart a centrist course. “The country must be governed from the middle,” she said. But Democrats on both sides of the Capitol were just beginning to digest the new faces in their expanded caucuses.

Those new members include Jim Himes, a Harvard- and Oxford-educated former Goldman Sachs banker turned affordable-housing advocate who ousted Representative Christopher Shays of Connecticut, the only Republican House member in New England.

But even as Democrats tightened their grip on the traditionally liberal Northeast, roughly one-third of this year’s gains in the House came in the West, including two seats in New Mexico and one each in Arizona, Colorado, Idaho and Nevada.

In Idaho, the Democrats scored an unlikely House victory when Walt Minnick, a self-described “gun-owning outdoorsman” who once worked in the administration of Richard M. Nixon defeated Bill Sali, a Republican incumbent.

Mr. Minnick, who emphasized his résumé as a businessman and longtime executive in the lumber industry, will join a Democratic conference long dominated by urban liberals and led by Ms. Pelosi, of San Francisco.

The Senate majority leader, Harry Reid of Nevada, and other Democrats pointed to their successes in the West as evidence that they were building an enduring majority. They said new lawmakers from the region would bring a pragmatic approach driven less by partisanship and more by common sense.

Representative Tom Udall, a Democrat who won a Republican-held Senate seat in New Mexico, said, “I feel like I am coming in as a Western problem-solver, as somebody who has had success working across the aisle on many issues in my home state.” Mr. Udall’s cousin Representative Mark Udall won the Senate race in Colorado.

Gov. Brian Schweitzer of Montana, a Democrat who won a second term on Tuesday, said the results showed that Republicans no longer had a guaranteed hold on the West. “When Democrats win in Idaho, that means that there is not a single place that’s safe left anywhere,” Mr. Schweitzer said.

New Mexico was a showcase of Democratic strength in this election, partly because of strong support from Hispanics, as the party won a Senate seat and two more House seats, turning the state’s Congressional delegation thoroughly blue.

But even as Mr. Reid was crowing about gun-loving Democrats in the West, Senator Sherrod Brown, Democrat of Ohio, was part of a separate conference call focusing on how many Democrats won by embracing progressive economic policies.

Mr. Brown said that he expected Republicans and more conservative Democrats to join an array of legislation related to alternative energy, trade, jobs and tax policy. “With a popular president leading,” he said, “we are going to see all but the most closed-minded Republicans joining us.”

The Senate Republican leader, Mitch McConnell of Kentucky, issued a statement on Wednesday offering Mr. Obama cooperation.

Representative Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee, said he believed that the new House majority would coalesce on most major economic issues but that some disagreements were inevitable.

“Clearly we are a big-tent party, and when it comes to social issues there will be some different perspectives in the caucus,” Mr. Van Hollen said.

Although Democrats fell short of their goal of a 60-vote Senate majority, which would have given them the power to break filibusters, Ms. Pelosi said it would be far easier to get Republican support for Democratic bills with Mr. Bush out of office. She said Republicans often blocked bills to protect the president.

House and Senate Democrats said they believed the Obama administration and Congressional Democrats could mesh in a way that Capitol Hill Democrats and the Carter and Clinton administrations could not. As senators, Mr. Obama and Vice President-elect Joseph R. Biden Jr., built strong relationships on Capitol Hill.

President Jimmy Carter and President Bill Clinton, as former governors, were outsiders to Congress.

Republicans are already warning that Mr. Obama, a relatively junior lawmaker, will be outmaneuvered by more experienced operators on Capitol Hill, a proposition Democrats dismissed, noting that Mr. Obama would benefit from the counsel of Mr. Biden, a longtime senator from Delaware. “I think both sides realize we need one another and both sides realize that we better not blow this,” said Senator Charles E. Schumer of New York.

    Democrats Vow to Pursue an Aggressive Agenda, NYT, 6.11.2008, http://www.nytimes.com/2008/11/06/us/politics/06cong.html?hp

Democrats Expand Control of Senate by Five Seats

November 5, 2008
Filed at 4:29 a.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- Democrats fattened their majority control of the Senate on Tuesday, ousting Republican Sens. Elizabeth Dole of North Carolina and John Sununu of New Hampshire and capturing seats held by retiring GOP senators in Virginia, New Mexico and Colorado.

Piggybacking on the excitement level raised by presidential victor Barack Obama and his voter-registration and get-out-the-vote drives, Democrats increased their effective majority to at least 56 seats in the 100-member Senate.

They did not turn over a single seat to Republicans. All Democratic incumbents on the ballot prevailed.

But Republicans stopped a complete rout, holding the Kentucky seat of Senate Minority Leader Mitch McConnell and a Mississippi seat once held by Trent Lott -- two top Democratic targets.

North Carolina state Sen. Kay Hagan, little known politically before her run, defeated Dole -- a former Cabinet member in two Republican administrations and 2000 presidential hopeful. Dole had tried to tie Hagan, a former Presbyterian Sunday school teacher, to atheists in an ad that appeared to backfire.

In New Hampshire, former Democratic Gov. Jeanne Shaheen defeated Sununu in a rematch of their 2002 contest.

In pair of western races, Reps. Tom and Mark Udall took over Senate seats held by retiring Republicans. Tom Udall, the son of former Interior Secretary Stewart Udall, defeated Republican Rep. Steve Pearce to succeed Pete Domenici in New Mexico. Tom's cousin Mark, the son of the late Rep. Morris Udall of Arizona, won the Colorado seat held by Republican Wayne Allard, who did not seek re-election.

Former Democratic Gov. Mark Warner breezed to victory in Virginia to take a Senate seat held for five terms by retiring GOP Sen. John Warner, beating another former governor, Republican Jim Gilmore. The two Warners are not related.

Democratic vice presidential candidate Joe Biden won another six-year term representing Delaware in the Senate. It became moot when Obama won the presidential election.

Democratic Sen. Mary Landrieu of Louisiana, the only serious GOP target, won her re-election over Republican state treasurer John Kennedy.

Senate Majority Leader Harry Reid, D-Nev., attributed the Democratic gains to Obama's coattails.

''It's been a really good night,'' Reid said in an interview with The Associated Press. ''Obama ran a terrific campaign, he inspired millions of people.''

McConnell, the Senate Republican leader, had been a target of national Democrats after leading successful filibusters against much of their legislative agenda the past two years. He won re-election against two-time Democratic gubernatorial candidate Bruce Lunsford in a contentious race.

''Winston Churchill once said that the most exhilarating feeling in life is to be shot at -- and missed,'' McConnell said late Tuesday. ''After the last few months, I think what he really meant to say is that there's nothing more exhausting.''

In a tight Mississippi contest, Republican Roger Wicker, defeated former Democratic Gov. Ronnie Musgrove to serve another four years of the term originally won in 2006 by Lott. Wicker was appointed to the post temporarily after Lott stepped down.

With Warner's victory in Virginia, Democrats now control both Senate seats and the governor's mansion. Virginia usually votes Republican in presidential elections, but Obama also won there Tuesday.

Democrats had counted on a slumping economy, an unpopular war and voter fatigue after eight years of President Bush to bolster a razor-thin 51-49 effective majority they've had the past two years after adding six seats in 2006.

They set a sky's-the-limit goal of controlling 60 Senate seats when the new Congress convenes in January -- the magic number needed to prevent Republicans from blocking bills and judicial nominees. It was always a long shot.

But having a majority in the high 50s will enable Democrats to exercise far more control than they have now, since some Republicans probably would join them in efforts to break Senate logjams on many bills and judicial appointments.

Included in the Democrats' majority are two holdover independents, Bernie Sanders of Vermont and Joe Lieberman of Connecticut, who have voted with them for the most part over the past two years. However, Lieberman, the Democrat's vice presidential nominee in 2000, spent most of 2008 campaigning for McCain.

It was unclear even to Senate leaders Tuesday night whether Lieberman would continue to caucus with the Democrats or keep his chairmanship of the Senate Homeland Security committee. Reid said in the interview that he'll discuss the matter with the Connecticut senator later this week.

Democrats will lose two incumbents: Obama and Biden. Democratic governors in Illinois and Delaware are sure to appoint Democrats to replace them.

Democrats had fewer seats to defend than Republicans. Of the 35 races on Tuesday's ballot, 23 were held by Republicans, 12 by Democrats.

Another possible pickup for Democrats: Sen. Ted Stevens, R-Alaska. Stevens, at 84, the longest serving Republican in Senate history, sought re-election despite calls from GOP leaders to resign after he was convicted last week of seven counts of lying on Senate financial disclosure forms.

He was locked in a tight contest with Democrat Mark Begich, the mayor of Anchorage. Another closely contested race was in Minnesota, where Republican incumbent Norm Coleman was challenged by Democrat Al Franken, the former ''Saturday Night Live'' writer and actor. A significant third-party candidate, Independent Dean Barkley, was complicating the race.

Republican Sen. Gordon Smith in Oregon was also on the list of Democratic targets.

Republicans held the Nebraska seat of retiring Sen. Chuck Hagel, with former Gov. Mike Johanns defeating Democrat Scott Kleeb, a college history instructor. Johanns resigned as Bush's agriculture secretary to make the race.

Republicans also held the Idaho seat of Sen. Larry Craig, who decided not to run for re-election after he was caught last year in a men's room sting. Idaho Lt. Gov. Jim Risch won the seat.

Republican incumbent senators who cruised to re-election included Lindsay Graham in South Carolina, Susan Collins of Maine, Jeff Sessions in Alabama, James Inhofe in Oklahoma, Lamar Alexander in Tennessee, Pat Roberts in Kansas, Thad Cochran of Mississippi, John Cornyn of Texas and Michael Enzi in Wyoming. Sen. John Barrasso, appointed after Wyoming Sen. Craig Thomas died, was elected to fill the remaining four years of Thomas' term.

Democratic senators easily winning re-election included Jay Rockefeller of West Virginia, Dick Durbin of Illinois, John Kerry of Massachusetts, Frank Lautenberg of New Jersey, Carl Levin of Michigan, Tim Johnson of South Dakota, Mark Pryor of Arkansas, Max Baucus of Montana, Tom Harkin of Iowa and Jack Reed of Rhode Island.

    Democrats Expand Control of Senate by Five Seats, NYT, 5.11.2008, http://www.nytimes.com/aponline/washington/AP-Senate-Rdp.html

Republicans Scrambling to Save Seats in Congress

November 3, 2008
The New York Times
By CARL HULSE

WASHINGTON — Outspent and under siege in a hostile political climate, Congressional Republicans scrambled this weekend to save embattled incumbents in an effort to hold down expected Democratic gains in the House and Senate on Tuesday.

With the election imminent, Senate Republicans threw their remaining resources into protecting endangered lawmakers in Georgia, Minnesota, Mississippi, New Hampshire, North Carolina and Oregon, while House Republicans were forced to put money into what should be secure Republican territory in Idaho, Indiana, Kentucky, Virginia and Wyoming.

Sensing an extraordinary opportunity to expand their numbers in both the House and Senate, Democrats were spending freely on television advertising across the campaign map. Senate Democrats were active in nine states where Republicans are running for re-election; House Democrats, meanwhile, bought advertising in 63 districts, twice the number of districts where Republicans bought advertisements and helped candidates.

“We are deep in the red areas,” Representative Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee, said on Sunday. “We are competing now in districts George Bush carried by large margins in 2004.”

What seems especially striking about this year’s Congressional races is that Democrats appear to have solidified their gains from the 2006 midterm elections and are pushing beyond their traditional urban turf into what once were safe Republican strongholds, creating a struggle for the suburbs.

Trying to capitalize on economic uncertainty, House Democrats are taking aim at vacant seats and incumbents in suburban and even more outlying areas — the traditional foundation of Republican power in the House. With many of the most contested House races occurring in Republican-held districts that extend beyond cities in states like Florida, Michigan, Minnesota and Ohio, Democrats said expected victories would give them suburban dominance.

The same is true for Senate Democratic candidates, who are seeking to nail down swing counties outside urban centers and move the party toward a 60-vote majority. That majority could overcome a filibuster, if party leaders could hold the votes together.

Among open House seats Democrats say they have a good chance of capturing include those being vacated by Representatives Ralph Regula and Deborah Pryce in Ohio, Jim Ramstad in Minnesota, Jerry Weller in Illinois and Rick Renzi in Arizona.

On the list of incumbents Democrats believe they can defeat are Representatives John R. Kuhl Jr. in New York, Joe Knollenberg in Michigan, Tom Feeney and Ric Keller in Florida, Don Young in Alaska, Robin Hayes in North Carolina and Bill Sali in Idaho.

Democrats say they have been able to peel away suburbanites by emphasizing Republican culpability for the economic decline, a point they say House Republicans helped make themselves by initially balking at the $700 billion bailout and sending the markets into a tailspin that depleted retirement and college savings accounts.

“Suburban voters are angry that their quality of life and standard of living is under attack,” said Representative Rahm Emanuel of Illinois, chairman of the House Democratic Caucus and a leading advocate of Democrats trying to broaden their appeal in the suburbs.

The partisan spending gap was stark. As of last week, Senate Democrats had spent more than $67 million against Republican candidates, compared with $33.7 million in advertising by Republicans. In the House, the Democratic Congressional Campaign Committee had spent $73 million, compared with just over $20 million for the National Republican Congressional Committee, according to campaign finance reports.

Most of the House Republican money was spent on behalf of incumbents or in districts where a Republican is retiring, emphasizing how much the party was playing defense. By contrast, House Democrats spent most of their money in the last month going after Republican seats in Colorado, Nebraska, Washington, West Virginia and elsewhere. On Sunday, Democrats prepared one last radio advertisement to begin running Monday in an effort to claim the seat of Thomas M. Reynolds, a Republican retiring from his upstate New York district near Buffalo.

“That kind of says it all,” said Representative Thomas M. Davis III, a retiring Virginia Republican whose own suburban seat is likely to go Democratic on Tuesday. Mr. Davis said Republicans simply faced too many disadvantages heading into Election Day, including a higher number of retirements in the House and Senate, an unpopular president and an economic collapse.

“You like to see a fair fight,” said Mr. Davis, a former chairman of the Republican Congressional campaign committee, “but basically we are playing basketball in our street shoes and long pants, and the Democrats have on their uniforms and Chuck Taylors.”

Neither of the national Senate campaign arms was advertising in Colorado, New Mexico or Virginia, indicating that Republicans were virtually ceding those states, where members of their party are retiring, to the Democrats. Senate Democrats were also optimistic about the prospects of unseating Senator John E. Sununu in New Hampshire and Senator Ted Stevens in Alaska, where Mr. Stevens campaigned despite being newly convicted on felony ethics charges.

Democrats said they saw themselves with the advantage in Minnesota, North Carolina and Oregon, giving them a reasonable chance at claiming eight seats and enlarging their Senate majority to 59 if they hold their current seats.

If Democrats swept those races, it could leave the potential 60th vote to break filibusters resting on the outcome in Georgia, Mississippi or Kentucky, where Senator Mitch McConnell, the Republican leader, is in a competitive race with Bruce Lunsford, a businessman. Polls show Democrats trailing but within striking distance in all three races, with the final results potentially hinging on the presidential race and turnout among Democratically inclined black voters.

In Mississippi, which has not sent a freshman Democrat to the Senate since John C. Stennis was elected in 1947, Senator Roger Wicker, a Republican appointed last year to fill the seat left vacant by Trent Lott’s resignation, is in a tight race with former Gov. Ronnie Musgrove, a Democrat.

“We feel we have a lot of momentum,” said Senator Charles E. Schumer of New York, chairman of the Democratic Senatorial Campaign Committee, “but we are ever mindful that getting to 60 is an extremely difficult thing to do because we are in so many red states.”

Republicans privately acknowledged that there was little hope for some of their candidates, including Senator Elizabeth Dole of North Carolina. But Republicans have not given up on the idea of unseating Senator Mary L. Landrieu in Louisiana, a state where Senator John McCain was running well against Senator Barack Obama in the presidential race. A victory over Ms. Landrieu by John Kennedy, the state treasurer, would be a significant moral victory for Republicans, and they pointed to internal polls that show a close race.

In Louisiana, North Carolina and Oregon, Republicans were trying to energize voters with the threat of Democratic dominance in Washington, running advertisements that warn voters about “complete liberal control of government.”

“We agree with Chuck Schumer that this is a tectonic election,” said Rebecca Fisher, spokeswoman for the National Republican Senatorial Committee. “And if Democrats get their way, this country will shift so far left it will take generations to get back on track.”

Both parties were focusing substantial final energies on the Senate race in Minnesota, where Senator Norm Coleman, the Republican, was in a heated clash with his Democratic challenger, Al Franken, a former comedian and radio talk show host.

The race remained close as Mr. Coleman was named in a last-minute lawsuit in Texas alleging that a businessman had funneled $75,000 to him through his wife’s business. Mr. Coleman, who has filed an unfair campaign practices complaint accusing Mr. Franken of broadcasting falsehoods in his advertisements, denied any impropriety, but the lawsuit led to a flurry of news accounts only days before the election.

In Kentucky, Mr. McConnell enlisted hundreds of volunteers to knock on doors and to make phone calls in the remaining hours. He was to embark on a fly-around of the state’s cities Monday in his effort to repel the serious challenge from Mr. Lunsford, who brought in one of Kentucky’s favorite daughters, the actress Ashley Judd, to campaign on his behalf in the closing days.

Strategists for both parties said it seemed increasingly possible that the full Senate picture might not even be settled Tuesday, given that a third-party candidate could cause both Senator Saxby Chambliss, Republican of Georgia, and his Democratic opponent, Jim Martin, to fall short of 50 percent of the vote, forcing a runoff on Dec. 2.

Party operatives also warned that Tuesday was likely to produce some surprises, considering the strong resentment toward Congress that has been reflected in polls for months. They predicted upsets of some House incumbents not thought to be in trouble.

Republicans said they believed some top Democratic targets, like Representative Dave Reichert of Washington and Christopher Shays of Connecticut, would be able to hang on because they, and others, had run strong campaigns built on their individual images and records.

“Republican candidates who have established their own personal brand, and have framed their respective races around creating a clear choice, will succeed on Election Day despite the turbulent political environment,” said Ken Spain, a spokesman for the National Republican Congressional Committee.

One problem for House Republicans was that freshmen lawmakers who gave Democrats control of the House after the 2006 elections were faring much better than party leaders had expected. Some, like Representative Kirsten Gillibrand, who represents the Hudson Valley in New York, became prime Republican targets virtually from the moment they were elected but are now favored to win second terms after raising formidable sums of money and cultivating moderate voting records that insulated them from attack.

Representative John Yarmuth of Kentucky, the president of the Democrats’ 2006 freshman class, said only two of its members were in serious trouble: Representative Nick Lampson of Texas, who represents a heavily Republican district south of Houston, and Representative Tim Mahoney of Florida, who has been entangled in a scandal over extramarital affairs.

Mr. Yarmuth credited House Democratic leaders with pursuing an agenda that gave the freshmen substantial achievements to promote back home, especially a generous new education benefit for veterans that counterbalanced the Democrats’ opposition to the war in Iraq

“I think that was a trademark of this last Congress that created a moderate image that we were pro-military, pro-troops,” Mr. Yarmuth said.

David M. Herszenhorn contributed reporting.

    Republicans Scrambling to Save Seats in Congress, NYT, 3.11.2008, http://www.nytimes.com/2008/11/03/us/politics/03cong.html?hp

Ted Stevens Receives a Hero’s Welcome in Alaska

October 31, 2008
The New York Times
By WILLIAM YARDLEY

ANCHORAGE — Two days after he was convicted on seven felony counts in Washington, Senator Ted Stevens returned to Alaska on Wednesday night to begin a six-day campaign sprint, telling several hundred supporters at a rally here that he would be vindicated on appeal and asking them to elect him to a seventh term.

“I will represent Alaska in the senate while my lawyers pursue the appeals to clear my name,” Mr. Stevens said.

Mr. Stevens faces a strong re-election challenge from Mark Begich, the mayor of Anchorage, a Democrat. Even as top Republican leaders have called on Mr. Stevens to resign and many political experts believe his chances of re-election are slim, some people refuse to rule out the possibility of his winning, given his stature here.

The senator, a 40-year incumbent known for delivering billions of dollars of federal money and projects to Alaska, was met in an airplane hangar here on Wednesday night with chants of “We need Ted.”

Just two days earlier, he had been convicted of seven counts of failing to report more than $250,000 in gifts and home renovations he received from a wealthy former oil services industry executive, William J. Allen. And before the rally, Mr. Stevens encountered still more pressure to step down.

Several leading Republican senators joined calls for Mr. Stevens to resign. Senator Mitch McConnell of Kentucky, the Senate Republican leader, was quoted by a newspaper in his home state as saying that “there is a 100 percent certainty” that the senate would vote to expel Mr. Stevens should he win re-election and his appeals fail. Senator John McCain, the Republican presidential nominee, and his running mate, Gov. Sarah Palin of Alaska, have also called on Mr. Stevens to resign.

Mr. Stevens made no reference to those demands on Wednesday, but he spent half of his eight-minute speech criticizing his conviction. He expressed regret but stopped short of apologizing, saying he had been guilty only of naïveté.

“Like most people, I’m not perfect,” Mr. Stevens said at one point, before referring to Mr. Allen. “I naïvely trusted someone who I thought was an honest friend, when he was neither honest nor a friend. That naïve trust, however, has put all Alaskans and my family through an ordeal that I deeply regret.”

He accused federal prosecutors of being “willing to do anything to win” and he implied that holding his trial in Washington added to its illegitimacy.

“If I had had a fair trial in Alaska, I would have been acquitted,” he said to cheers.

He added: “By providing for an appeals process, our founding fathers knew that mistakes could be made and innocent men could be wrongly convicted. This is one of those times.”

Supporters in the crowd suggested that the only verdict that matters is the one on Election Day. One person carried a sign saying “Alaska Decides, Not D.C.”

Mr. Stevens plans to campaign in Fairbanks during the day on Thursday but will return to Anchorage for a debate with Mr. Begich on Thursday night. It will be the first time Mr. Stevens has appeared in person for a debate with Mr. Begich. In some debates, he has submitted videotaped answers to questions provided in advance while Mr. Begich answered questions in person.

One other legal matter has been settled for Mr. Stevens since his conviction: After questions arose over whether Mr. Stevens could vote because he is now a convicted felon, the Alaska Department of Law on Wednesday concluded that he would retain his voting rights until he received a sentence. His sentencing has not been scheduled.

    Ted Stevens Receives a Hero’s Welcome in Alaska, NYT, 31.10.2008, http://www.nytimes.com/2008/10/31/washington/31stevens.html?hp

Alaska Senator Is Found Guilty on 7 Ethics Counts

October 28, 2008
The New York Times
By NEIL A. LEWIS

WASHINGTON — Senator Ted Stevens, Alaska’s dominant political figure for more than four decades, was found guilty on Monday by a jury of violating federal ethics laws for failing to report tens of thousands of dollars in gifts and services he had received from friends.

The jury of District of Columbia residents convicted Mr. Stevens, 84, on all seven felony counts he faced in connection with charges that he knowingly failed to list on Senate disclosure forms the receipt of some $250,000 in gifts and services used to renovate his home in Girdwood, Alaska.

Mr. Stevens, a consistently grim-faced figure, frowned more deeply as the verdict was delivered by the jury foreman, a worker at a drug counseling center. Mr. Stevens’s wife and one of his daughters sat glumly behind him in the courtroom.

In a statement issued after he had left the courthouse, Mr. Stevens was defiant, urging Alaskans to re-elect him to a seventh full term next week.

He blamed what he called repeated misconduct by federal prosecutors for the verdict. “I will fight this unjust verdict with every ounce of energy I have,” he said.

“I am innocent. This verdict is the result of the unconscionable manner in which the Justice Department lawyers conducted this trial,” he said. “I ask that Alaskans and my Senate colleagues stand with me as I pursue my rights. I remain a candidate for the United States Senate.”

Nonetheless, the verdict is widely expected to write an end to Mr. Stevens’s long political career, which has moved in tandem with his state’s rough-and-tumble journey from a remote territory to an economic powerhouse.

Mr. Stevens was instrumental in promoting statehood for Alaska when he was a young Interior Department official in the Eisenhower administration and then went on to represent the state in the Senate for 40 years. Over that time, he used his steadily accumulated influence over federal spending, notably using his membership on the Appropriations Committee, to steer millions, perhaps billions, of dollars in federal money to his home state.

The verdict comes a week before a second jury of sorts, the voters of Alaska, will decide whether to return him to the Senate or elect his Democratic opponent, Mayor Mark Begich of Anchorage. After Mr. Stevens’s indictment in July, he asked for a quick trial so he might clear his name before Election Day.

If Mr. Stevens loses his seat, the trial’s implications could be felt on a broad political scale, helping Democrats in their drive to win enough seats in the Senate to give them a filibuster-proof majority of at least 60 votes. Within an hour of the verdict’s becoming public, Democrats in Senate races around the country immediately sought to make the conviction an issue for their opponents, demanding that those who had received money from Mr. Stevens, who was generous with contributions to his colleagues, return it.

If Mr. Stevens wins and insists on keeping his seat, his fate will be in the hands of his Senate colleagues. A senator can be expelled only by a two-thirds vote of the entire Senate, so a conviction does not automatically cost a lawmaker his seat. Since 1789, only 15 senators have been expelled, most for supporting the Confederacy during the Civil War, the Senate Web site states.

In 1982, the Senate Ethics Committee recommended that Senator Harrison A. Williams, Democrat of New Jersey, be expelled because of his conviction on bribery, conspiracy and conflict of interest charges in the Abscam scandal, and in 1995 the committee recommended the expulsion of Senator Robert W. Packwood, Republican of Oregon, for sexual misconduct. Both men resigned before the full Senate could vote.

Should Mr. Stevens be expelled or resign on his own, the Alaska governor, Sarah Palin, would most likely have to call a special election to fill the vacancy, according to state legal officials.

Ms. Palin, the Republican nominee for vice president, issued a statement late Monday, saying she was “confident that Senator Stevens will do what’s right for the people of Alaska.”

Governor Palin did not specify what that was. She did ask that the verdict be respected, saying that it “shines a light on the corrupting influence of the big oil service company that was allowed to control too much of our state. It was part of the culture of corruption I was elected to fight. And that fight must always move forward regardless of party or seniority or even past service.”

The Senate majority leader, Harry Reid, said: “This verdict is a personal tragedy for our colleague Ted Stevens, but it is an important reminder that no man is above the law. Senator Stevens must now respect the outcome of the judicial process and the dignity of the United States Senate.”

The Republican leader, Senator Mitch McConnell, issued this statement after the verdict: “Senator Stevens was found guilty by a jury of his peers, and now must face the consequences of those actions. As a result of his conviction, Senator Stevens will be held accountable so the public trust can be restored.”

Judge Emmet G. Sullivan of Federal District Court delayed setting a date for sentencing until after a Feb. 25 hearing on motions from Mr. Stevens’s lawyers.

Under complicated guidelines that are no longer mandatory, Judge Sullivan has wide discretion in setting a sentence, although lawyers familiar with the subject said it was difficult to conceive of a situation in which Mr. Stevens would not be required to spend time in jail.

In addition to his expected appeal, his supporters are also likely to explore the possibility of obtaining a pardon, or some form of executive clemency like a commutation of any sentence, from President Bush, a fellow Republican, before he leaves office.

The verdict came after more than three weeks of testimony, the highlight of which was Mr. Stevens’s taking the calculated risk of testifying in his own defense.

Government prosecutors used evidence and testimony to paint a picture of Alaska in which several of Mr. Stevens’s wealthy friends, keenly aware of his political status, were eager to shower him with gifts. The indictment charged that he had received some $250,000 in gifts and services from a longtime friend, Bill Allen, the owner of a huge oil services construction company, and gifts from other friends like a sled dog and an expensive massage chair.

Mr. Allen, who was convicted for his role in a scheme to bribe Alaska state lawmakers to help his oil exploration projects, agreed to cooperate with the government and have his telephone conversations with Mr. Stevens recorded.

At one time, the two men were friends, thrown together by politics and oil money. Mr. Allen, who was the prosecution’s chief witness, testified that Mr. Stevens knew he was receiving the goods and services free and even sent an emissary to ask that no bills be sent.

Mr. Stevens’s defense was largely built on the notion that he had not asked for, and had no use for, many of the goods and services he received. In the case of the massage chair, he said it had not been a gift from Bob Persons, a friend and restaurant owner who had bought it from a Brookstone store and sent it to the Stevenses’ Washington home. It was a loan, Mr. Stevens testified, even though it had remained in his Washington home for more than seven years and he once wrote to Mr. Persons that he enjoyed using it and even fell asleep in it.

Moreover, Mr. Stevens asserted that his wife of 28 years, Catherine, was assigned to oversee the remaking of the Alaska home from a simple A-frame cabin to a grander, two-story residence fitted with two decks, a new garage and amenities like a whirlpool, a steam room and an expensive gas grill.

The verdict came relatively swiftly. The jury began deliberating last week. But it was obliged to start all over Monday morning when a juror was replaced by an alternate because of the death of a family member. In midafternoon, jurors sent a note saying they had finished their work.

William Yardley contributed reporting from Seattle, and Carl Hulse from Washington.

    Alaska Senator Is Found Guilty on 7 Ethics Counts, NYT, 28.10.2008, http://www.nytimes.com/2008/10/28/washington/28stevens.html?hp

Voter 'anger' has Dems set for big gains in Congress

26 October 2008
USA Today
By John Fritze

WASHINGTON — Out of money and down by double digits in the polls a month ago, Georgia Democrat Jim Martin's campaign for U.S. Senate was all but dead. Now, those polls show, it's dead even.

The race for the Georgia Senate seat should have been as comforting as peach cobbler for Republicans, but this month the non-partisan Cook Political Report changed its outlook for Sen. Saxby Chambliss' re-election from a safe bet to a tossup.

"The mood across the country is not particularly good right now," says Chambliss, a first-term senator who adds that he suspected the early lead wouldn't stick. "We knew it was going to be very close."

An unpopular president, fundraising doldrums and the burden of defending 27 more open seats than the Democrats are factors forcing GOP leaders to play defense in congressional races across the USA, as the Democrats angle for even wider majorities. Open seats do not have an incumbent.

Democrats have a 38-seat advantage in Congress now and, despite their own low approval ratings, the party could add as many as 28 seats in the House and seven to nine in the Senate, according to Cook.

As late as September, many Republicans thought the energy created by vice presidential pick Sarah Palin and the party's populist response of drilling to reduce gas prices could stem the losses.

But that was before the economic meltdown sent financial markets — and GOP poll numbers — tumbling as Americans linked the downturn to the Bush White House.

Even once-safe Republican seats — such as in North Carolina where Sen. Elizabeth Dole faces Democrat Kay Hagan — have become the focus of tight races.

In Minnesota, Republican Sen. Norm Coleman is in a contentious contest with Democrat Al Franken, the writer and comedian. Others, such as Chambliss and Senate Minority Leader Mitch McConnell, R-Ky., still have leads, but narrow ones.

Democrats seized control of Congress in 2006, picking up 36 seats. Usually when a party wins big one year it has to defend the gains in the next election, notes Rep. Rahm Emanuel, D-Ill.

This year, however, polls indicate Democrats are en route to bucking that trend.

"Republicans are still hung over from 2006, and they're about to get kicked in the gut again," says David Wasserman, who tracks House races for Cook.

"Voters are intent on taking out their anger on the party they perceive to have mishandled the economy."

Battling for open seats

Northern Virginia sent Republican Rep. Tom Davis to Congress for 14 years. This year, Davis is retiring, and his voters are flirting with a Democrat.

"The district is turning bluer by the hour," says Democratic candidate Gerry Connolly, who faces Republican Keith Fimian for Davis' seat. "The Republican label is a tough label this year."

The race, which Cook predicts is likely to go Connolly's way, illustrates a major problem Republicans face: a high number of hard-to-defend seats left open by retirements.

Republicans are leaving open five Senate seats; Democrats, one. In the House, 29 Republican seats are open, and Cook predicts 16 of those are in jeopardy of going Democratic.

Six Democratic seats are vacant in the House, but the GOP appears to have a shot at winning just one, in northern Alabama.

Defending an open seat is harder, in part because challengers lack the visibility and fundraising muscle that come with elected office. In 2006, 94% of House incumbents and 79% of senators won re-election, according to the non-partisan Center for Responsive Politics.

Open seats also cost more to win.

First-time winners in open House races two years ago spent an average $700,000 more than successful incumbents, the center reports. This year, polls show Democrats ahead for open Republican Senate seats in Virginia, New Mexico and Colorado.

"People really do want change," says Democratic Rep. Mark Udall, who the non-partisan Rothenberg Political Report forecasts to win the Colorado Senate seat being vacated by Republican Sen. Wayne Allard.

Hoping to defy conventional wisdom, Republicans are pressing on. In Northern Virginia, Fimian says he believes his race against Connolly will be closer than predicted.

"The more people I get in front of, the better my chances," he says.

Republican Bob Schaffer, who is trailing Udall in Colorado's Senate race, says his polling shows 10% of voters are undecided. He expects many of those voters to break his way Election Day.

"People are making their minds up that the economy and pocketbook issues are the driving force behind their decision-making," says Schaffer, a former energy executive who describes himself as the low-tax candidate.

"If this race is about the economy, I'm going to win."

Like many Republican candidates, Schaffer acknowledges Democrats will pick up seats. But, he says, "we don't intend for it to be in Colorado."

For Democrats, the challenge is different.

They need to defend incumbents who won in Republican-leaning districts two years ago. Four freshmen House Democrats are in races Cook calls tossups.

Democrats boost spending

Democrat Larry Kissell, a North Carolina social studies teacher who has never held public office, came within 329 votes of Republican Rep. Robin Hayes in 2006.

This year, Kissell's party isn't taking any chances.

The Democratic Party's national fundraising arm is helping Kissell overcome his financial disadvantage by pumping $1.7 million into his campaign — one of the biggest infusions of party support in the nation.

"The money itself controls the volume knob on a lot of things," Kissell spokesman Thomas Thacker says.

Outside cash has paid for TV ads that link Hayes to President Bush.

"Robin Hayes must have his head in the clouds," the narrator of one ad says as a picture of Hayes floats in the sky. "He seems to think George Bush's economic policy is working."

The party that controls Congress typically has an advantage in fundraising. So far in this general election, Democratic candidates have spent 29% more than Republicans — a reversal from 2006, when Republicans outspent Democrats, according to the center's analysis.

The Democratic Congressional Campaign Committee (DCCC) has spent $52 million on "independent expenditures" to help its candidates, according to the congressional newspaper Roll Call.

By contrast, the National Republican Congressional Committee has spent $12 million.

"The fact the DCCC is bankrolling this race is very telling that Larry Kissell needs Washington to run this race for him," Hayes said in a statement.

"The effect is that the voters are being bombarded with negative attacks that come from Washington, D.C."

Democrats poured $1.5 million into central Arizona's 3rd District, where Democrat Bob Lord is running against seven-term Republican Rep. John Shadegg.

And in Ohio's 15th District, the Democratic Party has spent $1.5 million to back Mary Jo Kilroy, who is seeking an open seat.

"Democrats are more energized, organized and well-funded than the Republicans," says Nathan Gonzales, political editor at Rothenberg.

"Republicans either don't have the money to respond in some districts or can't respond at the same levels."

'Blame the Republicans'

As bad as the political climate was for Republicans during the summer, it got worse in September when the financial crisis forced the Bush administration to ask Congress for a $700 billion bailout of Wall Street.

Incumbents in both parties said they received thousands of phone calls from constituents angry that the government would consider using taxpayer money to bail out private institutions. Many members in tight elections voted against the measure.

Sen. Gordon Smith, R-Ore., supported the bill and came under fire from his Democratic opponent, Oregon House Speaker Jeff Merkley, who called it "incredibly fiscally irresponsible."

The two are locked in a tight race that Congressional Quarterly says has no clear favorite.

"It goes right to the heart of Gordon Smith's view that you let the big boys do what they want, this willingness to put your hands over your eyes," says Merkley, who aired a TV ad criticizing Smith over the bailout just before Congress approved it.

Smith's campaign manager, Brooks Kochvar, argues that Merkley's message is not resonating.

"Sen. Gordon Smith faced a decision to do something, though not perfect, to help Main Street, or to do nothing at all," Kochvar says. "Our opponent's message is to do nothing at all."

Anger over the economy is likely to hurt Republican incumbents no matter how they voted on the bailout, says David Rohde, a political science professor at Duke University.

That resentment explains the Democrats' momentum, he says.

"The negative perceptions of Bush and the Republican administration have spilled over to Republicans more generally in Congress," he says.

"Here, more than anywhere, people tend to blame the Republicans because they blame Wall Street."

Turnout may change the game

Another factor that could drive House and Senate races has nothing to do with the congressional candidates: turnout in the historic presidential race.

Nearly 590,000 new voters have registered in Georgia in the past year, for instance, and both Senate candidates there say they are watching the effect Democratic presidential nominee Barack Obama's candidacy may have on black voters, who tend to choose Democrats.

Most polls have given Republican presidential nominee John McCain a slight lead in Georgia, which could help Chambliss.

So far, however, African Americans are casting a disproportionately high number of early voting ballots. Black turnout for Obama also could affect congressional races in North Carolina and Mississippi.

"Our challenge is for those first-time voters who are coming out to say 'I want to vote for Barack Obama for president' is to make sure they stay in the booth long enough and vote for the congressional candidates," says Rep. Chris Van Hollen, D-Md., chairman of the DCCC.

Davis, a former chairman of the National Republican Campaign Committee, says high voter registration does not necessarily translate into turnout on Election Day.

"But there is no question that there is going to be an enhanced African-American turnout in this," he says.

"They are unlikely to vote for Obama and come back in significant numbers for Republicans at the congressional level."

Martin, the Democratic Senate candidate in Georgia, says it is not just an increase in black voters that will shape the election.

"People are coming from all different sectors of our society to exercise their rights as citizens to vote," he says.

"They're demanding change, and they're participating in numbers that we've not seen in many, many years."

    Voter 'anger' has Dems set for big gains in Congress, UT, 26.10.2008, http://www.usatoday.com/news/politics/election2008/2008-10-26-congress_N.htm

Democrats Headed Toward Big Gains in House, Senate

October 25, 2008
Filed at 4:21 a.m. ET
By THE ASSOCIATED PRESS
The New York Times

WASHINGTON (AP) -- Democrats are on track for sizable gains in both houses of Congress on Nov. 4, according to strategists in both parties, although only improbable Southern victories can produce the 60-vote Senate majority they covet to help them pass priority legislation.

A poor economy, President Bush's unpopularity, a lopsided advantage in fundraising and Barack Obama's robust organizational effort in key states are all aiding Democrats in the final days of the congressional campaign.

''I don't think anybody realized it was going to be this tough'' for Republicans, Sen. John Ensign, chairman of the party's senatorial campaign committee said recently. ''We're dealing with an unpopular president (and) we have a financial crisis,'' he added.

''You've got Republican incumbent members of the Congress'' trying to run away from Bush's economic policies, said Maryland Rep. Chris Van Hollen, who chairs the House Democratic campaign committee. ''And they can't run fast enough. I think it will catch up with many of them.''

Speaker Nancy Pelosi of California predicted recently that Democrats would win at least 14 House seats in Republican hands.

But numerous strategists in both parties agreed a gain of at least 20 seems likely and a dozen or more GOP-held seats are in doubt. Only a handful of Democratic House seats appear in any sort of jeopardy. They spoke only on condition of anonymity, saying they were relying on confidential polling data.

In the Senate, as in the House, only the magnitude of the Democratic gains is in doubt.

New York Sen. Chuck Schumer, head of the Democratic committee, said his party would have to win seats in ''deeply red states'' to amass a 60-seat majority, but added, ''We're close.''

Obama's methodical voter registration efforts in the primary season and his current get-out-the-vote efforts are aiding Democratic candidates in several Southern races. They start with North Carolina, where GOP Sen. Elizabeth Dole trails in the polls, and include Georgia and Mississippi, where Sens. Saxby Chambliss and Roger Wicker respectively are in unexpectedly close races.

''Overall, I think Obama will help us in the South because, first, his economic message resonates with Southerners, both white and black, and obviously there will be an increased African-American turnout,'' Schumer said.

Also in a close race is the Republican leader, Sen. Mitch McConnell of Kentucky, although that is not a state where Obama has made much of an effort.

Compounding Republican woes, the same economy that has soured voters on their candidates is causing some of the nation's wealthiest conservative donors to stay on the campaign sidelines.

Freedom's Watch, a conservative group that once looked poised to spend tens of millions of dollars to help elect Republicans, had spent roughly $3 million as of midweek. Its largest single contributor is Sheldon Adelson, a billionaire with gambling interests in the United States and China.

Democrats hold a 51-49 majority in the current Senate, counting two independents who vote with them. In the House, Democrats have 235 seats to 199 for Republicans, with one vacancy.

It has long been apparent that Democrats would retain control of both houses of Congress, and in recent weeks, the party's leaders have mounted a concerted drive to push their Senate majority to 60. That's the number needed to overcome a filibuster, the technique of killing legislation by preventing a final vote. If Obama were to win the White House, it would be the Republicans' last toehold in power.

In reality, Ensign noted this week that even if Democrats merely draw close to 60 seats, they will find it easier to pick up a Republican or two on individual bills and move ahead with portions of their agenda that might otherwise be stalled.

Democrats are overwhelmingly favored to pick up seats in Virginia, New Mexico and Colorado where Republicans are retiring.

Additionally, GOP Sens. John Sununu of New Hampshire, Norm Coleman of Minnesota and Gordon Smith of Oregon are in jeopardy. So, too, Alaska Sen. Ted Stevens, whose fate may rest on the outcome of his corruption trial, now in the hands of a jury in a courthouse a few blocks from the Capitol.

Even if they win all four of those races -- a tall order -- Democrats would be two seats shy of 60 and looking South to get them.

In the House, Democrats are so flush with cash that they have spent nearly $1 million to capture a seat centered on Maryland's Eastern Shore that has been in Republican hands for two decades.

It is one of 27 races where the Democratic Congressional Campaign Committee has spent $1 million or more -- a total that the counterpart Republican group has yet to match anywhere.

''We've had to hold most of our resources for the final two weeks and that's beginning to make a difference,'' said Rep. Tom Cole of Oklahoma, chairman of the GOP House committee.

Cole declined to make an overall prediction. ''A lot depends on what happens presidentially in the next 10 days. We're very closely tied with John McCain and we got a lot of open seats and a strong financial disadvantage,'' he said. He predicted the party's Republican presidential candidate would mount a strong finish and help other candidates on the ballot.

Still, the party's campaign committee recently pulled back from plans to advertise on behalf of incumbents in Michigan, Florida, Colorado and Minnesota who face competitive challenges.

For its part, the Democratic Congressional Campaign Committee recently invested in a race in the Lincoln, Neb., area held by Republican Rep. Lee Terry. Obama has a dozen or more paid staff as well as volunteers there hoping to win one electoral vote.

Democrats express confidence they will pick up at least two and possibly three Republican-held New York seats where incumbents decided against running again and at least one each in Illinois, Virginia, Ohio, New Mexico and Arizona. There are additional opportunities in at least a half-dozen other states.

Republican incumbents in greatest jeopardy include Reps. Don Young in Alaska, Tom Feeney and Ric Keller in Florida, Joe Knollenberg and Tim Walberg in Michigan, Marilyn Musgrave in Colorado, Jon Porter in Nevada and Robin Hayes in North Carolina.

Among the few Democrats in close races are Reps. Nick Lampson in Texas, who is in a solidly Republican district; Tim Mahoney in Florida, who recently admitted to having two extramarital affairs; Carol Shea-Porter in New Hampshire and Paul Kanjorski in Pennsylvania.

    Democrats Headed Toward Big Gains in House, Senate, NYT, 25.10.2008, http://www.nytimes.com/aponline/washington/AP-Congress-Stakes.html

Senate Passes Bailout Plan; House May Vote by Friday

October 2, 2008
The New York Times
By CARL HULSE

WASHINGTON — The Senate strongly endorsed the $700 billion economic bailout plan on Wednesday, leaving backers optimistic that the easy approval, coupled with an array of popular additions, would lead to House acceptance by Friday and end the legislative uncertainty that has rocked the markets.

In stark contrast to the House rejection of the plan on Monday, a bipartisan coalition of senators — including both presidential candidates — showed no hesitation in backing a proposal that had drawn public scorn, though the outpouring eased somewhat after a market plunge followed the House defeat. The Senate margin was 74 to 25 in favor of the White House initiative to buy troubled securities in an effort to avoid an economic catastrophe.

Only Senator Edward M. Kennedy, who is being treated for brain cancer, did not vote.

The two Senate leaders, Senators Harry Reid, Democrat of Nevada and the majority leader, and Mitch McConnell of Kentucky, the Republican leader, strongly urged their colleagues to approve the plan despite the political risk given public resentment.

“Supporting this legislation is the only way to make the best of a crisis and return our country to a path of economic stability, prosperity and growth,” said Mr. Reid, who asked that senators vote formally from their desks. The presence in the Senate of both presidential candidates in the final weeks of the campaign also gave weight to the moment. The political tension was clear as Senator Barack Obama walked to the Republican side of the aisle to greet Senator John McCain, who offered a chilly look and a brief return handshake.

Mr. McCain did not make remarks on the legislation. Mr. Obama, in his speech, said the bailout plan was regrettable but necessary and he referred to the stock market drop after the House vote. “While that decline was devastating, the consequences of the credit crisis that caused it will be even worse if we do not act now,” he said.

President Bush issued a statement applauding the Senate for its vote in favor of a bill he called “essential to the financial security of every American.” He urged the House to follow suit.

In the House, officials of both parties said they were increasingly confident that politically enticing provisions bootstrapped to the original bill — including $150 billion in tax breaks for individuals and businesses — would win over at least the dozen or so votes needed to reverse Monday’s outcome and send the measure to President Bush.

The stock market reflected nervous jitters over a vote that was to occur after it closed but that could affect the future of many Wall Street workers. The Dow Jones industrial average was off almost 220 points during the day, but recovered to close down just 19.6 points, or 0.2 percent, at 10,831.07.

Besides the tax breaks, senators also made a change that had drawn widespread support in recent days — a temporary increase in the amount of bank deposits covered by the Federal Deposit Insurance Corporation, to $250,000 from $100,000. And the entire package was attached to legislation requiring insurers to treat mental health conditions more like general health problems, a long-sought goal of many lawmakers who demanded such parity.

As the shape of the new bill became more clear Wednesday, some House Republicans and Democrats indicated that the changes were enough to get them to take another look at the measure and perhaps change their minds — even though the new items being added would substantially increase the burden on taxpayers.

Representative John Yarmuth, a Kentucky Democrat who on Monday voted no, said he found the new proposal more acceptable, as did Representative Jim Ramstad, a retiring Republican from Minnesota who voted in opposition as well.

“The inclusion of parity, tax extenders and the F.D.I.C. increases has caused me to reconsider my position,” Mr. Ramstad said. “All three additions have greatly improved the bill.”

Leaders of both parties in the House, who spent much of Wednesday on the phone taking the temperature of lawmakers not scheduled to return until Thursday, said they were identifying other potential converts as well, and were finding a more receptive audience for the revised measure because of the tax package and other changes.

Some conservative House Republicans and liberal Democrats remained adamantly opposed. “The bailout legislation that the Senate is sending back to the House is a fraternal twin to the one I voted against on Monday — meet the new bill, same as the old bill,” said Representative Joe Barton, Republican of Texas.

While popular, the tax breaks, which had been the center of a bitter dispute between House and Senate Democrats, caused problems as well.

A coalition of centrist Democrats led by Representative Steny H. Hoyer of Maryland, the majority leader, had refused to back the tax benefits unless they were deficit neutral — offset by tax increases or spending cuts elsewhere. The bill now includes the Senate version of the tax plan, which adds most of the cost to the deficit over the next decade.

But the Senate leaders decided to present the House with a take-it-or-leave-it choice, and it is possible some Democrats could desert the bill over the tactic. Mr. Reid said the Senate would remain in session this week to see how House members react and whether they might attempt to change the bill, forcing another Senate review.

Mr. Hoyer said he was disappointed in the Senate’s decision on the tax breaks and worried it could cost Democratic votes. “Certainly there are people who are upset we are making the deficit worse as we are trying to stabilize the economy,” Mr. Hoyer told reporters. But in a telephone conference call among the Democratic leadership Wednesday morning, he told his colleagues he would back the measure because the economic rescue needed to take priority, according to participants.

In the end, Senate leaders decided to overcome some of the ideological and political resistance that doomed the measure in the House with the tried-and-true Congressional approach of stuffing the bill with provisions that would make it hard for many lawmakers to resist.

“All I’m trying to do is get this thing passed,” said Mr. Reid, denying he was trying to jam the House by giving members no choice but to accept the tax proposal he favored or again reject the bailout.

The multiple tax breaks, called extenders in the Capitol because they renew or extend expiring tax benefits, appeal to many lawmakers and could provide a political argument for backing a bill that has otherwise been very unpopular.

Instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.

“This bill has been packaged with a lot of very popular things to give it even more momentum,” said Senator Jeff Sessions, a Republican from Alabama, who is an opponent.

The approximately $150 billion in new tax breaks, which offer incentives for the use of renewable energy and relieve 24 million households from an estimated $65 billion alternative-minimum tax scheduled to take effect this year, would be offset by only about $40 billion in spending cuts or tax increases elsewhere.

Moreover, the increase in federal deposit insurance will not be financed over the short term, as the insurance program now is, by assessing premiums on banks that benefit. Instead, banks will get an open-ended line of credit directly to the Treasury Department. But the Congressional Budget Office noted that federal law requires the banks to eventually make up any shortfall and any loans to be repaid, though not until at least 2010.

The changes in the bill were measurable by volume. The initial proposal from the Treasury Department ran just three pages; the latest version exceeds 450.

After receiving the proposal from Treasury Secretary Henry M. Paulson Jr. almost two weeks ago, Congress instituted a series of changes, including additional oversight, steps to limit home foreclosures and restrictions on the compensation of executives of institutions that take part in the Treasury program.

Under pressure to tighten the plan even more, Congressional and administration negotiators decided to parcel out the $700 billion in installments, starting with a first tranche of $350 billion. And during a weekend of negotiations, they added as a final backstop a requirement that in five years the president must present Congress with a plan to make up any losses of tax funds by looking to the financial community to make up the difference.

Robert Pear contributed reporting.

    Senate Passes Bailout Plan; House May Vote by Friday, NYT,  2.10.2008, http://www.nytimes.com/2008/10/02/business/02bailout.html?hp

Senate to Vote Today on the Bailout Plan

October 2, 2008
The New York Times
By CARL HULSE and ROBERT PEAR

WASHINGTON — Senate leaders scheduled a Wednesday vote on a $700 billion financial bailout package after accepting tax breaks and a higher limit for insured bank deposits in a bid to win House approval and send legislation to President Bush by the end of the week.

Top lawmakers said the Senate proposal, worked out after a day of maneuvering behind the scenes, would include tax breaks for businesses and alternative energy and higher government insurance for bank deposits.

“It has been determined, in our judgment, this is the best thing to move forward,” said Senator Harry Reid, Democrat of Nevada and the majority leader, in announcing the surprise move.

The stock markets in Europe and Asia seemed to take the news in stride Wednesday. European exchanges were relatively quiet, much like those in Asia, helped in part by speculation that lawmakers in Washington would be able to revive the financial rescue plan. The Dow Jones industrial average was down about 30 points at noon, and the broader Standard & Poor’s 500-index was off 0.5 percent. The Dow gained 485 points Tuesday after a 777-point decline on Monday.

The senators issued no details of their proposal Tuesday night and said none would be available until Wednesday. The lawmakers were gambling that the tax package would appeal to lawmakers who helped sink the measure in the House on Monday, without driving off Democrats who have opposed extending the tax incentives without offsetting spending cuts elsewhere.

House Democratic leaders reacted cautiously to the new approach, with Representative Steny H. Hoyer of Maryland, the majority leader and a chief advocate of paying for the tax breaks, saying, “I am talking with my House colleagues about the Senate action and how to best proceed.”

On NBC’s “Today” program Wednesday morning, Mr. Hoyer said he was concerned that the tax issues could complicate the chances of passage when the legislation comes back to the House floor for a vote.

“There’s no doubt the tax package is very controversial,” he said, according to The Associated Press, ”There’s no doubt in my mind that the Senate added this because they thought that’s the only way they could get it passed.” He said, however, that he was not pleased the tax provisions were attached to the bill.

But House Republican leaders, who said they had been advised about the Senate plan, said the new elements would appeal to their rank-and-file, which voted strongly against the legislation Monday. A spokesman for Representative John A. Boehner of Ohio, the Republican leader, said that “Mr. Boehner was consulted and gave the green light.”

Representative Roy Blunt of Missouri, the Republican whip, said Wednesday on the “Today” show that prospects for passage had improved with the changes made by the Senate. According to The A.P., Mr. Blunt said one reason he was more optimistic was that lawmakers are hearing less vocal opposition from their districts.

Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking committee, said the Senate decided to move quickly, citing signs of regret from some House members after the markets plunged in response to their initial vote.

“I think their will is coming back, having heard from their constituents,” Mr. Dodd said.

Lawmakers said the stock market response to the rejection was a sobering experience that could enhance prospects for a revised plan. Some anxiety lifted on Tuesday, as the Dow Jones industrial average rose 485 points, regaining more than half of the 778 points it lost on Monday.

Still, deep concern remained about credit markets, as the rate that banks charge one another shot higher — to a record high by one widely used measure — making borrowing more difficult.

President Bush joined the two major presidential candidates, Senators John McCain and Barack Obama, in calling for quick action to stabilize the markets and avoid what Mr. Bush characterized as the threat of “painful and lasting” damage to the economy.

Both presidential candidates and the Bush administration also endorsed the increase in bank deposit insurance.

On the morning after the sell-off on Wall Street, Congressional offices reported a shift in angry calls from constituents, with some now demanding that lawmakers take some corrective action — a distinct change from the outpouring of public opposition that contributed to the defeat of the plan.

“I started hearing from a lot of people who lost money on their investments thanks to the big drop on Wall Street yesterday,” said Representative Steven C. LaTourette, Republican of Ohio, who voted against the plan.

As they explored ways to tinker with the proposal in consultation with the Bush administration, all sides agreed any revisions would not change the underlying concept of granting the Treasury Department access to up to $700 billion to purchase — and eventually resell — troubled securities that were clogging the financial system.

It was a delicate balancing act for the architects of the proposal who had to be careful that in adding elements to entice new support they did not lose the support they already had.

“Obviously you don’t want to do something to lose votes,” said Senator Kent Conrad, Democrat of North Dakota, who was among Senate Democrats who huddled Tuesday to discuss possible alterations in the proposal.

Speaker Nancy Pelosi was noncommittal about the new Senate plan Tuesday night, but other Democrats said it might be difficult to reject given the crisis and the array of tax breaks. “The Senate will vote tomorrow night, and the Congress will work its will,” Ms. Pelosi said.

House officials spent much of Tuesday considering their own changes, including an extension of unemployment pay and a $1,000 tax credit for less affluent homeowners.

But those plans are not likely to advance, given the Senate decision. While the Senate left the door open slightly to other additions to the bill, such revisions would need the agreement of the full Senate, and the House proposals were likely to be blocked by Senate Republicans.

“Opening this up all over again to other things may doom it,” Mr. Dodd cautioned.

The Senate proposal would cost more than $100 billion and extend and expand many individual and business tax breaks, including tax credits for the production and use of renewable energy sources, like solar energy and wind power.

The bill would also extend the business tax credit for research and development, expand the child tax credit, protect millions of families from the alternative minimum tax and provide tax relief to victims of recent floods, tornadoes and severe storms.

Members of the House and the Senate said the bill would create tens of thousands of jobs and reduce the nations’ dependence on foreign oil. But the two chambers have been at odds over whether and how to offset the cost of extending the many tax breaks covered by the legislation. The major obstacle has been Representative Hoyer of Maryland and other centrist Democrats.

Senate and House leaders had been debating whether the Senate, where support for the proposal runs deep, should vote first to provide some momentum for a second vote across the Capital Rotunda. Some senators were leery of going on the record if the legislation could not prevail in the House, but others backed the idea of the Senate taking the lead.

“I would support the Senate going first, which we would be willing to do as early as tomorrow if that would make this process successful,” Senator Hillary Rodham Clinton, Democrat of New York, said in a conference call on Tuesday.

With no new vote in the House even possible before lawmakers reconvene Thursday at noon, strategists for both parties spent Tuesday poring over tally sheets from Monday afternoon’s 228-to-205 outcome, trying to identify lawmakers who could be persuaded to switch their votes.

But winning over some determined opponents was not going to be easy.

“It was one of the best votes of my career,” said Representative Peter A. DeFazio of Oregon, leader of a group of liberal Democratic opponents of the Treasury plan who on Tuesday proposed a series of regulatory and legislative alternatives to the bailout.

But those Democratic opponents did say that they would be willing to back an increase to $250,000 from $100,000 in the amount of a bank deposit that would be insured by the federal government — an idea that on Tuesday gained fast currency as a consensus change in the initial plan.

Mr. Obama and Mr. McCain embraced the deposit insurance proposal early Tuesday, setting off a bit of a political tiff over who deserved credit for initiating it. House Republicans claimed to have offered the insurance increase in weekend negotiations over the plan only to have it rejected.

Democrats said they had no recollection of that provision being brought up in the chaotic talks, but top Democratic Congressional aides said the leadership was willing to add it to the bill and knew of no opposition. The chief uncertainty was whether it would significantly enhance the outlook for the legislation.

“Everybody is on board,” said one top House aide who spoke on condition of not being identified when talking about internal deliberations. “The question is, how many votes does it bring?”

With the House in recess for the observance of Jewish religious holidays, lawmakers consulted via conference call on their ideas for improving the legislation.

“Some will feel very virtuous about having voted against Wall Street and then turn around and find their constituents, generally, paid a huge price for that vote,” said Senator Robert Bennett, Republican of Utah, in exhorting his colleagues to “rise to the occasion” and pass the bill.

“I have faith that the members of the House and the members of the Senate will ultimately recognize their responsibility and do the right thing.”

Trying to calm the markets, Ms. Pelosi and Mr. Reid, the majority leader, released a letter to Mr. Bush, saying, “Working together, we are confident we will pass a responsible bill in the very near future.”

Senator Mitch McConnell of Kentucky, the Republican leader, was even more emphatic. “This financial crisis is going to be dealt with by Congress, and it’s going to be dealt with by Congress this week,” Mr. McConnell told reporters.

    Senate to Vote Today on the Bailout Plan, NYT, 2.10.2008, http://www.nytimes.com/2008/10/02/business/02bailout.html?hp

Senate Approves Indian Nuclear Deal

October 2, 2008
The New York Times
By PETER BAKER

WASHINGTON — The United States opened a new chapter of cooperation with India on Wednesday night as Congress gave final approval to a breakthrough agreement permitting civilian nuclear trade between the two countries for the first time in three decades.

The Senate ratified the deal 86 to 13 a week after the House passed it, handing a rare foreign policy victory to President Bush in the twilight of his administration and culminating a three-year debate that raised alarms about a new arms race and nearly toppled the government of India.

The agreement, in the view of its authors, will redefine relations between two countries often at odds during the cold war and build up India as a friendly counterweight to a rising China. But critics complain that it effectively scraps longstanding policies designed to curb the spread of nuclear weapons and that it could encourage nations like Pakistan, Iran and North Korea to accelerate their own programs outside international legal structures.

Under the terms of the deal, the United States will now be able to sell nuclear fuel, technology and reactors to India for peaceful energy use despite the fact that New Delhi tested bombs in 1974 and 1998 and never signed the Nuclear Nonproliferation Treaty. In exchange, India agreed to open up 14 civilian nuclear facilities to international inspection, but would continue to shield eight military reactors from outside scrutiny.

“The national security and economic future of the United States will be enhanced by a strong and enduring partnership with India,” Senator Richard G. Lugar of Indiana, the ranking Republican on the Foreign Relations Committee, said in the Senate debate on Wednesday. “With a well-educated overall middle class that is larger than the entire United States population, India can be an anchor of stability in Asia and an engine of economic growth.”

Senator Byron Dorgan, Democrat of North Dakota, called the deal a “grievous mistake” that would reward rogue behavior. “We have said to India with this agreement: ‘You can misuse American nuclear technology and secretly develop nuclear weapons.’ That’s what they did. ‘You can test these weapons.’ That’s what they did,” Mr. Dorgan said.

He added: “And after testing, 10 years later, all will be forgiven.”

Mr. Dorgan and Senator Jeff Bingaman, Democrat of New Mexico, tried to amend the agreement to explicitly require the United States to cut off nuclear trade if India conducted a new nuclear test. The agreement’s backers defeated the proposal, arguing that it was unnecessary and that nuclear trade would be halted in such a situation.

Mr. Bush has been pursuing the agreement since 2005 and his advisers have called closer relations between the United States and India a key part of his foreign policy legacy. Prime Minister Manmohan Singh of India, visiting Mr. Bush at the White House last week, endorsed that view. “When history is written,” he said, “I think it will be recorded that President George W. Bush made an historic goal in bringing our two democracies closer to each other.”

But the nuclear accord has proved even more controversial at home for Mr. Singh than for Mr. Bush. Opposition parties have tried to bring down Mr. Singh’s government and the Communist Party dropped out of his governing coalition in protest of the deal, but he survived a confidence vote. Secretary of State Condoleezza Rice heads this week to New Delhi to mark the success of their nuclear negotiations.

For India, the pact signals the end of 34 years of isolation among nuclear powers — what the New Delhi government calls “nuclear apartheid.” The United States last month convinced the Nuclear Suppliers Group, a consortium of 45 nations that Washington formed in response to the Indian test in 1974, to lift longstanding restrictions on nuclear trade with India. France and Russia are eager to bid for India’s business.

The United States-India Business Council, which promoted the deal, estimates that India may spend as much as $175 billion over the next quarter century expanding its nuclear industry to cope with rising energy demands. Companies like General Electric, Westinghouse and Bechtel will now be able to compete for contracts.

“This is one of those historic, important, tectonic shifts in relations with another country,” said Ron Somers, the council’s president. “This is a country we need to be partnering with and I would argue will be shaping the destiny of the 21st century.” Michael Krepon, co-founder of the Henry L. Stimson Center, a research organization in Washington, called the promise of big dollars and American jobs “pure fantasy” and predicted that the United States would regret further opening the nuclear door.

“There will be a reckoning for this agreement,” he said. “You can argue till you’re blue in the face that India is a special case. But what happens in one country affects what happens in others.”

    Senate Approves Indian Nuclear Deal, NYT, 2.10.2008, http://www.nytimes.com/2008/10/02/washington/02webnuke.html?hp

Senate to Vote on India Nuclear Pact

October 1, 2008
By THE ASSOCIATED PRESS
Filed at 7:32 a.m. ET
The New York Times

WASHINGTON (AP) -- A nuclear cooperation agreement between the United States and India is ready for a vote in the Senate.

Approval of the pact, due to be voted on later Wednesday, would reverse 30 years of American nonproliferation policy. It's one of President Bush's top foreign policy priorities.

Senate Majority Leader Harry Reid told his colleagues Tuesday night that two amendments will be considered, including one that seeks to address what the U.S. reaction should be in the event India conducts another atomic test. The amendments reflect an attempt to make sure U.S. civilian nuclear exports don't boost India's nuclear weapons program.

Senate to Vote on India Nuclear Pact, NYT, 1.10.2008, http://www.nytimes.com/aponline/us/AP-US-IndiaNuclear.html