Analysis: House GOP holds the cards on bailout bill

House Republicans are forging a new identity by strongly opposing the White House on the $700 billion financial bailout bill, a bold maneuver that distances them from a president that they were in lockstep for most of his two terms. 

House rules do not traditionally give the minority party in the House much power. In this case, however, Democratic leaders, fearing a backlash if the financial rescue plan doesn’t work, are adamant that the bailout must be supported by a significant amount of House Republicans.

{mosads}Yet, House Republicans say Democrats need to convince some of their own members because they are wary of voting for a bill that is not popular with the public.

Few House GOP members back Treasury Secretary Henry Paulson’s plan or the new compromise bill that was crafted by congressional Democrats, Senate Republicans and the White House. House Republicans have pointed out that a majority of constituents have called their Capitol Hill offices this week to express their strong opposition to the bill.

Democrats say Bush and GOP presidential nominee Sen. John McCain (R-Ariz.) must persuade House Republicans to get behind the measure, but members of the lower chamber are not budging.

House Minority Leader John Boehner (R-Ohio) directed some of his Republican colleagues to come up with an alternative to Paulson’s plan. On Thursday, senior GOP lawmakers unveiled their proposal, which Democrats ridiculed. They said that even the Bush administration, specifically Paulson, does not support their proposal.

House Republicans are undeterred. Sensing the public’s skepticism about a bailout for Wall Street, House Republicans say they want Wall Street – not taxpayers – to help pay for the bill’s hefty price tag.

Financial Services Committee Chairman Barney Frank (D-Mass.) said Thursday night that House Republicans are the stumbling block and blamed them for playing politics with a bill he says must pass soon.

The House GOP strategy is not without risks. If the stock market dips significantly on Friday, Democrats will blame the House GOP for being obstructionists. McCain, who was involved in many key meetings on the rescue plan, has not publicly detailed whether he backs the Bush plan or House Republicans.

The relationship between McCain and the House GOP is somewhat fragile, with some still bitter about his successful 2002 effort to pass campaign finance reform. However, many House Republicans say they are pleased that McCain shifted his policy on offshore drilling and rave about his selection of Alaska Gov. Sarah Palin to be his running mate.

McCain has kept his cards close to the vest, but he will soon have to answer questions about which bailout plan he endorses. Those questions could come as early as Friday’s scheduled debate with Sen. Barack Obama (D-Ill.), though it is unclear if McCain will show up. McCain has said the debate should not occur until there is a deal on the rescue plan. Obama disagrees, saying he will appear at the debate, even if McCain doesn’t.

House Republicans, who have generally backed of Bush’s domestic and foreign policy initiatives from 2001-2006, have spent parts of the 110th Congress bucking their president, whose approval ratings have consistently been in the 30s throughout this Congress.

Earlier this year, a majority of House Republicans disregarded Bush’s veto threat of a Medicare bill. Most of them also voted to overturn Bush’s veto of the popular farm bill.

But the defections on the bailout bill could be much larger. Political analysts have said the base of the Republican Party has been disillusioned with its government spending habits and view the bailout as a defining moment.

Some Republicans on Capitol Hill have likened the proposed rescue plan to socialism. Former House Speaker Newt Gingrich (R-Ga.), who has helped pass major Bush-backed bills through Congress, has strongly criticized the administration’s remedy to the nation’s financial woes. Gingrich has warned that members who vote in favor of Paulson’s plan will be politically damaged in the November elections.