THE turbulence on Wall Street moved south to Washington yesterday.
It was, in some respects, an old-fashioned day in Washington as each party struggled to whip their members into line; a day that recalled an age in which party unity was less fixed than it has been in recent years.
Steny Hoyer, the Democratic maj
ority leader from Maryland, quoted Spiro Agnew, Richard Nixon's vice-president, who in another age warned: "The cost of our failure will far exceed the price of our progress."
Thus conservative Republicans who hated the bill on account of its "socialism" praised and voted with liberal Democrats who felt US Treasury Secretary Hank Paulson's modified plan did too much for Wall Street and not enough for ordinary Americans.
Earlier, Congressman John Boehner's voice had choked as he urged his colleagues to "think about what happens if we don't pass this bill".
The Republican minority leader was close to tears as he asked members to "think about your friends, your neighbours, your constituents.
"Think about those retired people who live near you, whose income will shrivel to zero".
But Mr Boehner failed to move his party. No fewer than 133 Republicans joined 95 Democrats in voting against the plan.
Only 65 Republicans and 140 Democrats supported the bill, leaving it defeated by 228 votes to 205.
Predictably, each party blamed the other for the impasse.
Republicans blamed speaker Nancy Pelosi for the failure to pass the bill.
Nonsense, said Democrats, who felt "totally" betrayed by the Republican leadership. "They promised us 80 to 90 votes," said a Democratic leadership source, "but these guys only care about themselves."
"Are Republicans really saying, 'Somebody hurt my feelings so I will punish the country?'," asked Barney Frank, the Democratic chairman of the House financial services committee.
The truth was that a majority of members wanted a bill to pass but fewer wanted to vote for it themselves.
In the end, too many members voted "No" while hoping their colleagues would vote "Yes".
The political cost of voting "Yes" proved more persuasive than the unknown cost of voting "No."
The Democratic leadership had hoped to treat the bail-out plan as though it were a vote to award Congress an unpopular pay rise.
According to a Democratic aide, the theory was: "We put up 110, GOP (a nickname for the Republicans – God's Own Party] puts up 110 of their guys, and we hold hands and we jump together.
"This thing is a flaming pile of s***, but we have to do it."
But GOP blinked. The political reasons for opposing the bill are clear: earlier this week, calls and e-mails to congressional offices were running 200 to one against the bail-out plan.
"The American public hates this deal," said the Democratic leadership aide.
The bill's failure is also a stunning political defeat for the White House, which had lobbied hard for its passage, and it underlines the extent to which Mr Bush is now a lame-duck president.
