Watch The Lobbyists

by dday

The scene on Capitol Hill looks confused to me. The refrain from the morning papers is that progress is being made toward a bailout bill, and yet the Congress is at odds with the White House on key points, Congressmen are at odds with one another, conservatives don’t appear to be going along, liberals don’t appear to be going along, rank-and-file Democrats have their own ideas…

I think the best practice here is to follow the lobbyists. I know there are less of them out there because John McCain’s campaign is in full swing, but there are still enough of them swimming around. And if you do that, it becomes clear that Chris Dodd’s plan is rapidly becoming the basis for the legislation – otherwise they wouldn’t be working so hard to defeat key elements of it.

One financial services lobbyist said his group was keeping a flow chart to try to keep track of who on Capitol Hill was pushing what.

“It ebbs and flows,” the lobbyist said. “It literally changes by the hour.”

Added Josten: “I think every 10 minutes, something changes here. I think they are wrapped up in it. It’s hard to tell what’s in, what’s out.”

One congressional reaction that emerged — Senate Banking Committee Chairman Chris Dodd’s (D-Conn.) response to the rescue package — wasn’t favorable to many of K Street’s banking clients, who oppose one provision in particular: giving bankruptcy judges the power to lower mortgages for distressed homeowners.

“We are vigorously opposing that,” said Steve Verdier, a lobbyist for the Independent Community Bankers Association (ICBA). “If that happens, then the mortgage rates for other consumers are going to go up.”

It’s hard out there for a corporate lobbyist. By the way, if mortgage rates were to go up because homeowners facing foreclosure were to get their rates lowered, then they should really go up if the home goes into foreclosure and the bank is left with a worthless piece of paper. Yet they refuse to value their assets, and clarity is obviously the great killer of their fantasy.

Sen. Dodd is chairing a hearing right now with President Paulson, who is talking a lot of gibberish with a hint of dire warning. He has a nice suit on, so I expect half the Democrats on the panel to hide under their desks. CNN is carrying it live. This is very fluid right now.

…somebody might want to ask Paulson how much his plan would help his buddies at Goldman Sachs.

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