Decision Points

White House. Hank Paulson , Dick Cheney , Josh Bolten, and I represented the administration. The party leaders and key committee chairmen represented Congress. Presidential candidates McCain and Obama took their seats at opposite ends of the table. Members of our staffs were sardined into the room. Nobody wanted to miss the marquee event in Washington’s political theater.

    The emergency Cabinet Room meeting about the rescue package.
White House/Eric Draper
    I opened the meeting by stressing the urgency of passing legislation as soon as possible. The world was watching to see if America would act, and both parties had to rise to the challenge. Hank gave an update on the volatile markets and echoed my call for speedy passage.
    I turned to the speaker. True to her word, she deferred to Senator Obama. He had a calm demeanor and spoke about the broad outlines of the package. I thought it was smart when he informed the gathering that he was in constant contact with Hank. His purpose was to show that he was aware, in touch, and prepared to help get a bill passed.
    When Obama finished, I turned to John McCain. He passed. I was puzzled. He had called for this meeting. I assumed he would come prepared to outline a way to get the bill passed.
    What had started as a drama quickly descended into a farce. Tempers flared. Voices were raised. Some barbs were thrown. I was watching a verbal food fight, which would have been comical except that the stakes were so high.
    Toward the end of the meeting, John did speak. He talked in general terms about the difficulty of the vote for Republican members and his hope that we could reach a consensus.
    After everyone had their chance to vent, I decided there was nothing more we could accomplish. I asked the candidates not to use the White House as a backdrop to issue political statements. I asked the members of Congress to remember we needed to show a united front to avoid spooking the markets. Then I stood up and left.

    Early in the afternoon of Monday, September 29, the House of Representatives held a vote on the financial rescue bill. The previous two days, our fifth weekend in a row spent dealing with the financial crisis, had been packed with negotiations. Hank and his Treasury staff—joined by Dan Meyer , my cool-headed legislative affairs chief, and Keith Hennessey , my tireless National Economic Council director—had shuttled back and forth to Capitol Hill, working to resolve the remaining issues on TARP. Late Saturday night, Speaker Pelosi and John Boehner told me they hadthe outlines of a deal. On Monday morning, I stepped onto the South Lawn to congratulate Congress and urge the agreement’s quick passage.
    Back in the Oval Office, I started calling Republican House members to lock in votes.
    “We really need this package,” I told one congressman after the next. They all had reasons why they couldn’t vote for it. The price tag was too high. Their constituents opposed it.
    “I just can’t bail out Wall Street,” one told me. “I’m not going to be part of the destruction of the free market.”
    “Do you think I like the idea of doing this?” I shot back. “Believe me, I’d be fine if these companies fail. But the whole economy is on the line. The son of a bitch is going to go down if we don’t step in.”
    At 2:07 p.m., the final vote on the bill was cast. It failed, 228 to 205. Democrats had voted in favor of the legislation, 140 to 95. Republicans had rejected it, with 65 votes in favor and 133 opposed
    I knew the vote would be a disaster. My party had played the leading role in killing TARP. Now Republicans would be blamed for the consequences.
    Within minutes, the stock market went into free fall. The Dow dropped 777 points, the largest single-day point loss in its 112-year history. The S&P 500 dropped 8.8 percent, its biggest percentage loss since the Black Monday crash of 1987. “This is panic … and fear run amok,” one analyst told CNBC. “Right now we are in a classic moment of financial meltdown.”
    Shortly after the vote, I met with Hank, Ben, and the rest of the economic team in the Roosevelt Room to figure out our next move. We really had only one option. We had to make another run at the legislation.
    My hope was that the market’s severe reaction would provide a wakeup call to Congress. Many of those who voted against the bill had based their opposition on the $700 billion price tag. Then they had watched the markets hemorrhage $1.2