Deadline, What Deadline? Congress Could Add Another Bailout to the Stimulus

Brace yourselves, folks, for another financial bailout. Bloomberg reports today (and Politico concurs) that President Obama may be seeking upwards of $50 billion more in bailout cash from Congress by next month.

Leaving aside for a moment the merits of spending even more money to keep the banking industry afloat — even if it is paired with more foreclosure aid, as appears to be the case — this presents an immediate political challenge to Democratic congressional leaders. Do they push to pair this new mini-bailout with the stimulus bill, as Bloomberg’s report suggests?

After all, House Speaker Nancy Pelosi (D-CA) has set a hard February 13 deadline for passing the massive economic recovery package. There simply may not be time to debate and pass a separate mini-bailout by then. But will the Senate be able to corral its bailout critics to climb aboard a stimulus bill that includes extra help for the banks?Since before Democrats took control of the Senate, its leaders have long pushed to attach contentious bills of any kind to legislation that’s considered “must-pass.” (See the expanded hate-crimes ban added to 2007’s Pentagon authorization, under current leader Harry Reid, and the overpriced national ID-card bill added to 2005’s war spending bill, under Republican control).

That tactic helps neutralize the minority’s ability to block the bill being attached … but it also introduces a host of new political considerations to the mix. Would the addition of $50 billion-plus in extra bailout money alienate senators such as Russ Feingold (D-WI) and Ben Nelson (D-NE) — both of whom voted against releasing rescue funds to Obama last week?

Pairing more financial industry money with economic recovery money means that the stimulus bill will have to be even more carefully calibrated to reflect the priorities of the TARP program’s longtime critics. Anyone in Congress who’s buying their tickets home for Presidents’ Day recess should hold off.