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A Matter Of Trust

Clay Risen is managing editor of Democracy: A Journal of Ideas and a contributing editor at World Trade. His first book, A Nation on Fire: America in the Wake of the King Assassination will appear in January.

It's tempting to watch today's Senate Banking Committee hearings, with Democrats and Republicans alike tearing into Federal Reserve Chair Ben Bernanke and Treasury Secretary Henry Paulson, and feel pangs of sorrow for the beleaguered duo. There to defend the administration's $700 billion rescue plan for the nation's debt markets, they faced withering charges of having cobbled together an "ad hoc" (in the words of Alabama Republican Richard Shelby) three-page proposal that was "stunning and unprecedented in its scope and lack of detail" (Connecticut Democrat Chris Dodd). Paulson could only play defense: Of course it's short on details--that's what we're here for, he told them. Oversight and other details were "the role of Congress." To think otherwise would be "presumptuous."

That's nice of him. But wait ... let's remember with whom we're dealing here.

It's hard to watch the tragicomedy unfolding on the Hill and not see the chickens coming home to roost for an administration that seems to wake up every morning with new ways to be "presumptuous"--toward Congress, taxpayers, foreign leaders, and the Constitution. To be fair, Hank Paulson probably does believe that time and decisiveness are of the essence, and I'm willing to allow that he means it when he says, "I hate the fact that we have to do it, but it's better than the alternative." But, in a perfect distillation of the mindset of the Bush administration, his original bailout plan read, "The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this act ... without regard to any other provision of law regarding public contracts."

Such brazenness is the norm for the administration. Remember, to take just two examples, when it forced Democrats to accept both the Iraq War resolution and the anti-labor provisions in legislation creating the Department of Homeland Security in 2002, on penalty of seeming weak on national defense? It's the same thing here--that it can use the rhetoric of crisis to force through a plan granting the executive even more powers. If Bush's power-grabbing tendencies were just for his own political sake, it would be hard to see the worth in making a push this late in the game. The Paulson plan shows clearly that for the Bush team, executive power is more than just political; it's ideological. They really do believe that the executive, whoever it is, should have unchecked power over the economy, in the same way they have pushed for unchecked power over homeland security and the war in Iraq.

This time, of course, Congress isn't playing along, and as a result, we will see a great pushback over the next few days as Hill leaders hopefully coalesce around a counter-plan of their own. If we're lucky, the two sides will reach an agreement quickly. If not, we could be in for weeks of haggling, opening the door to interest-group finagling.

In a post on Friday, I implicitly called on the administration to push through its incipient plan quickly so as to avoid such complications. Had I forgotten who sits in the Oval Office? I didn't imagine it would do so by completely avoiding consultation with Congressional leaders (though, if rumors are true, openly courting Wall Streets banks). By eschewing outside input completely, the White House has raised Congressional ire and thus made such complications all the more likely--and, because markets are all about perception, made sure that financial turmoil would continue. Naively, I assumed that in a moment of real crisis, the administration might act otherwise. But like the proverbial scorpion that kills the frog carrying it across the stream, they could hardly do otherwise. It's in their nature.