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Scott Jagow: I don't know about you, but my head is spinning. This whole thing has snowballed so quickly. President Bush has called an emergency summit at the White House today. Congress is working around the clock to push this bailout through, in whatever form it takes. Last night, the President had some rather ominous predictions for what'll happen if there's no bailout.
Tape of President George Bush: More banks could fail including some in your community. The stock market would drop even more which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.
Jagow: Let's bring in our Washington correspondent Steve Henn as we continue our coverage of the financial crisis. Steve, there's a sense of urgency here, but quite a divide between Republicans and Democrats. Why might this be a pretty tough fight?
Steve Henn: Well, I think you're right, there is a consensus. A majority of folks on both sides of the aisle are convinced that this thing has to pass, but they're also really angry. They're unsure if what they're going to do is going to work, and they're upset that they're in a position where they have to take the word of a college professor, Ben Bernanke, a former college professor, and Hank Paulson, the Treasury Secretary and a former chairman of Goldman Sachs, about a deal that requires them to sign off on $700 billion.
Jagow: And what are the main sticking points for each side?
Henn: Well, I think part of the problem here is liberals and conservatives understand the causes of this crisis here completely differently. Liberals see this as a real failure, almost an abdication of government's responsibility to effectively regulate the market. They think that government just walked away from its duty to make sure that loans were fundamentally fair. And so, when they look at solving the crisis, they want to make sure if they're going to sign a check for $700 billion that they address that issue.
You know, free-market conservatives look at the crisis and they see it entirely differently. They look at Fannie and Freddie's huge growth and ultimate collapse earlier this year as a clear warning about what happens when private companies get too close to the government. And so the idea that the solution is for the federal government to go in and buy a big chunk of the banking sector through warrants or stock options, it just makes their skin crawl.
Jagow: All right, so you have any idea where the middle might be?
Henn: I think the middle will emerge once a deal is on the table. I think a majority of Democrats and a majority of Republicans agree the government has to do something. This crisis isn't imaginary. It's clear what's happening in credit markets, and I think if out of this meeting we're going to see later today the leaders of both parties are able to put a deal on the table and force a vote, it's going to be very hard for most members of Congress to vote no.
Jagow: All right, Steve Henn in Washington, thank you.
Henn: Thank you.