The Bailout Spotlight Returns to the House — and John Boehner

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Brendan Smialowski / The New York Times /Redux

House minority leader John Boehner attends a news conference after the House voted on Sept. 29 to reject a $700 billion rescue of the financial industry

Last Friday, House Republicans greeted their leader, John Boehner, with a standing ovation. The reason for this outpouring of adulation: a day earlier Boehner, backed by John McCain, had shocked a meeting at the White House by standing up to Democrats and the Bush Administration and refusing to support the $700 billion emergency plan to rescue the economy. Boehner should have savored that moment, because it may be the most love the Ohio Representative will get for a long, long time.

After the compromise bill he subsequently helped craft went down to defeat in the House on Monday, sparking a stock market meltdown, Boehner fully expected to be attacked by Democrats. But he has quickly found himself the target of harsh criticism from within his own party. Some members derided Boehner's own (albeit grudging) support of the unpopular bill as a betrayal of conservative free-market principles, while others called him incompetent for letting such a high-profile piece of legislation fail.

And he and other leading House Republicans have had no time to lick their wounds. With the Senate passing a newer version of the financial stabilization bill Wednesday night — bailout is all but a banned word on Capitol Hill now — the uncomfortable spotlight is once again focused on Boehner's ability to deliver enough Republicans. The sweeteners added to the basic plan — including an extension of popular energy and business tax cuts and an increase to $250,000 in the amount in individual bank accounts that the FDIC will insure — should help. But if Boehner is once again unable to deliver the necessary votes, it could cost him his leadership job and further damage McCain's chances of winning the presidency.

Boehner is in a no-win situation: none of his members really want to vote for this bill, and with just five weeks left before the election, they aren't thinking about much beyond their own self-preservation. Still, now that Monday's stock market free fall has generated phone calls from concerned constituents to go along with the angry ones opposing any rescue package, most GOP House members do want to see something passed — only they'd prefer that it be done without their votes. Worse yet, there is precious little that President Bush, Treasury Secretary Henry Paulson or Boehner has left to threaten them with, as the three leaders are already an endangered species. "It is a tough deal; there's no safe way to do the wrong thing," says former Republican majority leader Dick Armey. "The majority of the Republicans in the House understand the gravity of this situation: a fundamental realignment of the political and economic structures of this country, which diminishes role of the markets and increases the role of the government."

Part of the problem is that both Boehner and Representative Roy Blunt, the No. 2 House Republican, have long ties to the Bush Administration. Their initial inclination to support Paulson was greeted by a rebellion on the right. And the fact that both leaders eventually supported the compromise bill that almost two-thirds of their members opposed was viewed as a major betrayal of the movement by many conservative activists. "The incompetence of Boehner and Blunt and their team is beyond belief," says Richard Viguerie, head of ConservativeHQ.com. "For the good of their party and the good of their country, they should resign immediately from their leadership positions."

While most of the GOP conference didn't want to vote for the bill, they also did not believe their leaders would let it fail. Some members emerged from the vote shell-shocked and blamed Boehner for not twisting more arms. "Conclusion: the leadership needs to work the votes and get it done. It was disappointing," says Representative George Radonovich of California, the only Republican who switched his vote from no to yes during the vote. Boehner's initial clumsy attempt to blame the bill's defeat in part on House Speaker Nancy Pelosi's partisan speech before the vote didn't help his sinking standing; it was derided not just by Democrats, but also by his Republican colleagues (John Shaddeg of Arizona minced no words, calling it a "stupid claim").

In one hopeful sign for Boehner — and Wall Street — Shaddeg, an influential conservative voice on Capitol Hill, now looks likely to vote yes this time around. "Much as I would like to see much more dramatic changes, there comes a point in time where we've got to send the signal to the U.S. markets, U.S. consumers and world markets that we're dealing with this," Shadegg told the Washington Post. "I'm inclined to hold my nose and vote yes." Republicans, however, may not be the only hurdle for a successful vote; some fiscally conservative, moderate Democrats are not happy about adding roughly $100 billion in unfunded tax cuts to the legislation.

Even before the economic crisis, things weren't looking exactly rosy for House Republicans. A whopping 29 of them retired this year, leaving an uncomfortable number of swing seats open to Democratic challenge (without all those retiring members, who were more inclined to vote yes on the bill, it would have been even more soundly defeated). Indeed, five GOP seats are already leaning Democratic and another 19 are toss-ups, according to the Cook Political Report, which tracks congressional races. And House Republicans trail Democrats by more than $40 million in campaign cash-on-hand.

To many observers, like Dick Armey, the current situation recalls an effort by President George H.W. Bush in 1990 to hammer out with congressional leaders another unpopular bill, this one to raise taxes to cope with budget shortfalls brought on by the recession. Bush, you may remember, was never forgiven by conservatives for breaking his "read my lips" no-new-taxes pledge, and he went on to lose his re-election bid two years later. The moderate Republican minority leader Bob Michel faced his own insurrection from conservatives, including Armey and Newt Gingrich, who became Speaker when the GOP won the House in 1994. "There are two or three Gingrich-type figures in the House, say Mike Pence or Jeb Hensarling, but they would come to the role reluctantly," Armey says. "Though, sometimes the conditions raise somebody, force them to act."

Hensarling is the current chairman (and Pence a former chairman) of the Republican Study Committee, a 100-plus-member group of fiscal conservatives in the House who helped sink the bailout bill on Monday. Pence challenged Boehner in the battle two years ago to replace Tom DeLay as minority leader but now says he is no longer interested in a leadership position, a sentiment echoed by Hensarling.

Boehner himself was once a bomb thrower, the only remaining member of the Gang of Seven — a band of young conservative members who delighted in harassing the Democratic majority in the early 1990s. But in recent years, he's become more of a moderate, elected to lead his conference on a platform of bipartisanship. As the top Republican on the Education and Workforce Committee, he worked with Democrats to pass No Child Left Behind and the Pension Protection Act of 2006.

That's not to say that Boehner hasn't been an effective partisan leader as well: last year the GOP won or drew more rounds than it lost to Speaker Pelosi. Its most recent victory: a relaxation on offshore drilling rules - though that victory was lost amid the bailout furor and stock market chaos.

"There is definitely a significant level of frustration judging by the conversations I've had with former colleagues," says Pat Toomey, a former GOP Congressman from Pennsylvania who now heads the conservative group Club for Growth. "Who's in leadership will depend on the outcome of elections. They may go very well in November — which isn't looking very likely, but if they do, Boehner and Blunt might be able to stay on."

But by bringing McCain in to help, the House GOP leaders may have done more damage to their members' electoral chances. When McCain gets a cold — Obama now holds his widest leads yet in many polls — his coattails get pneumonia. After trailing Democrats in generic matchups for most of the year, early last month Republicans started to catch up, coming within 3 percentage points of the Democrats in a CNN/Opinion Research poll. The latest poll, however, done Sept. 19-22 — after Paulson's emergency request but before the failed vote — shows the Democrats have widened that lead to 14 percentage points.

"If they lose 10-15 seats, they will certainly be looking for new leadership, and that will create an internal battle within the party for the soul of the party," says James Thurber, director of American University's Center for Congressional and Presidential Studies. But with an unpopular lame-duck President, an even more unpopular Republican Party in Congress and a leadership vacuum at the top of the House, that soul search could be a very painful experience.

(See the ten steps to the financial meltdown here and TIME's photos of the global financial crisis here.)

(See TIME's Pictures of the Week here.)